By now the story is well documented. Regulators in the US, in their infinite wisdom to protect retail forex traders from the big, bad forex market, have banned hedging. You remember the glory days when you or your forex robot could go long in EUR/USD and short it at the same time waiting for a definitive trend to emerge.

Once the trend appeared, you’d cancel one trade and ride the winner. Easy enough, but now you don’t even have that simple pleasure anymore if you trade with a US-based broker and neither does your forex robot. Now mind you, institutions can still hedge and that just doesn’t seem fair, but that’s a story for another time.

What Is A Forex Robot To Do?

Typically smug, the geniuses behind the anti-hedging effort, the fine folks at the National Futures Administration (NFA) essentially say that good traders won’t feel the effects of the hedging ban. Well about the denizens of traders that depend on forex robots to help them be “good” forex traders? What the NFA has done here is basically cut one of the reasons so many traders love forex robots off at the knees. The reality is forex robots are the ideal tool to hedge with because they are proficient at entering multiple trades at the same time and obviously, they can enter and close more trades than we can on our own. Fortunately, there are some options for users of forex robots to consider in their quest for hedging.

What To Do To Get Your Forex Robot Hedging Again

Perhaps the easiest option is to move your account offshore. For example, if you trade from the States and have noticed your forex robot can’t hedge anymore (if your forex is still able to hedge, consider this an anomaly that will end soon) you might want to consider moving your account to a British or European broker. Most of the forex brokers operating in the US have operations overseas and transferring your account should be seamless.

With that, there are some consideration you need to be aware. The most important of which is the fact that the NFA cannot regulate overseas brokers. This generally isn’t a problem if you’re dealing with a reputable broker, but every broker can have problems from time-to-time and if you a trade-related complaint about a non-registered broker, you can’t turn to the NFA for help. Don’t worry, the NFA is doing everything it can to make sure you and your forex robots don’t take your business overseas and we don’t necessarily think this is a good thing.

Something Else To Be Aware Of

As if the anti-hedging stuff wasn’t bad enough, the NFA has now banned the use of stop-loss orders for retail traders. Of course institutions can still do those, but this can really impair your forex robot’s ability to keep losses small. And again, this is one of the reasons so many traders rely on forex robots: To automatically set stop-loss orders. So now you and your forex robot have one more thing to worry about because you’ll have to spend some time keep close watch on your robot’s trades.

Author Bio: Francisco Pizarro G. made a career from Forex and left my profession as a Translator almost 4 years ago; since then I work from home in my small office trading the Asiatic markets during night time, where I found a good niche. I am a fan of Forex Robots

Category: Finances
Keywords: Forex Robots, Day Trading, Forex, Forex Brokers, Finacial Advisors, Expert Advisors