FIFO (First In First Out)

This policy, which follows stricter accounting principles, states that the first position one opens in a particular currency pair is the first position that must be closed when one liquidates.

This rule was instituted in the broader market because all traders have a tendency to close out profitable positions yet are reluctant to realize and accept poor decisions. Losing positions are left to sit in the hopes that a huge market swing will somehow rescue them from the market.

Although human nature makes it difficult to realize a loss, common sense dictates that this practice is contrary to sound trading techniques. The following axiom has stood the test of time, “Let profits ride and cut losses short.” Losing positions held indefinitely will produce nothing more than added loss, with rollover charges eventually resulting in a margin call.

FIFO is a trading standard that will bring MG’s clients closer in line with interbank market procedures.