FIFO Rule

The FIFO rule — first in, first out — requires that where an account holds several positions in the same instrument, a closing order applies to the oldest of them first. It is a feature of the US retail forex regime rather than a universal convention, and it travels with a companion restriction that prevents holding long and short positions in the same pair at the same time. The practical effect is on how a strategy can be expressed. Scaling into a position and then taking profit selectively on the newest parcels is not available; nor is running a hedge by opening an opposing position instead of closing the original. Strategies written for hedging-mode accounts frequently will not run at all under the rule, because the platform rejects the orders they depend on. Which regime applies is decided by the entity your account sits with rather than by the platform, so it is a question to settle before designing around it.