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The FIFO rule for US forex accounts: how closing order works

If you have bought the same pair twice in a US account and found you could not close only the newer position, the reason may be the FIFO (first-in, first-out) requirement. It comes from the rules of the US National Futures Association (NFA). Using only what we confirmed in the original texts of the rule, NFA's notices and the MT5 help, this article covers what the FIFO rule says, the closing order, the same-size exception, and how to count profit and loss in your records, with charts and a worked example. It does not tell you which account to use or how to trade.

Published 17 Oct 2026By Kenji Okumura, Representative, Tiltnote (has traded forex)

In short

In an account with a US dealer that is an NFA member, when you hold several positions on the same pair, the oldest one is closed first, with one exception for same-size trades (below).

The rule behind this is NFA Rule 2-43(b): forex dealer members "may not carry offsetting positions in a customer account but must offset them on a first-in, first-out basis".[1] Here, "offset" means closing a position with an opposite trade. Holding a buy and a sell on the same pair at once (hedging) is not possible in these accounts.[1][2]

There is one exception: at the customer's request, the dealer may offset same-size transactions, against the oldest transaction of that size.[1]

The rule is addressed to US dealers that are NFA members. We have not checked whether dealers in other countries have the same rule; check your own broker's documentation.

What the FIFO rule is

FIFO stands for first-in, first-out: what went in first comes out first.

The NFA (National Futures Association) is the industry-wide self-regulatory organization for the US derivatives industry, designated by the CFTC (Commodity Futures Trading Commission) as a registered futures association.[6] Section (b) of its Rule 2-43, "Offsetting Transactions", says:[1]

An FDM is an NFA member that is the counterparty, or offers to be the counterparty, to forex transactions.[5]

Rule 2-43 was adopted effective May 15, 2009.[1] NFA's April 2009 notice said section (b) prohibits "a trading practice commonly referred to as 'hedging'", and that the ban on carrying offsetting positions applies to positions established after May 15, 2009.[2] A May 2009 notice then extended the effective date of the FIFO part alone to July 31, 2009, after dealers asked for more time for the programming changes.[3]

Whose accounts it covers

The rule is addressed to NFA members that act as forex dealers (FDMs).[1] NFA's forex regulatory guide says FDMs must be registered as either an FCM (futures commission merchant) or an RFED (retail foreign exchange dealer).[4]

The same guide defines a customer as "any party to a forex trade who is not an eligible contract participant", which "includes individuals with assets of less than $10 million and most small businesses".[4] In other words, it covers most individual traders' accounts at US FDMs.

You can check whether a firm is an NFA member with NFA's BASIC search; see how to check a broker. Whether your account closes positions FIFO is something to check in your broker's account terms. In an MT5 account with the FIFO rule, closing in a different order returns an error (see "How MT5 handles it" below).[7]

Other US rules, such as the leverage limits, are covered in forex leverage limits by country and region.

Closing order: oldest position first

Say you buy 0.1 lot of EUR/USD three times, at 1.0800, 1.0850 and 1.0900. If you then sell 0.1 lot in a FIFO account, the buy opened first, at 1.0800, is closed. The buys at 1.0850 and 1.0900 stay open.

A made-up example. Buy 0.1 lot of EUR/USD three times, at 1.0800, 1.0850 and 1.0900, then sell 0.1 lot. In a FIFO account (US NFA rule), the buy opened first, at 1.0800, is closed, and the buys at 1.0850 and 1.0900 stay open. In a hedging account without FIFO, you can choose which buy to close, or keep the sell open as a hedge.
A made-up example, based on NFA Rule 2-43(b) and the MT5 help.

Some accounts without a FIFO rule let you choose which position to close, or hold the sell as a separate position (a hedge). Hedging and the netting and hedging account types are explained in what is hedging in forex.

How MT5 handles it

The MT5 help says that, to meet the requirements of authorities such as the NFA, a broker can set a closing rule on an account that allows only FIFO closing.[7]

So in such an MT5 account, stop levels on the same instrument are kept the same across all positions. MT4, mobile apps and other platforms may work differently, so check your broker's documentation too. For the full list of order types, see forex order types.

The exception: offsetting same-size transactions

Under Rule 2-43(b), at the customer's request, a dealer may offset same-size transactions even if there are older transactions of a different size. Even then, it must use the oldest transaction of that size.[1]

The chart below shows two buys of different sizes, followed by a 0.2 lot sell. A matches the sell to the oldest positions first. B asks the dealer to offset against the same-size (0.2 lot) transaction.

A made-up example. A USD account buys #1, 0.1 lot of EUR/USD at 1.0800, then #2, 0.2 lot at 1.0900, then sells 0.2 lot at 1.0850. A: strict FIFO, oldest first: #1 gives +$50.00 and 0.1 lot of #2 gives −$50.00, realized $0.00, and 0.1 lot of #2 is left with −$50.00 open. B: same-size offset on request: #2 gives −$100.00, and #1 is left with +$50.00 open. Either way, closing the rest at 1.0850 gives the same total of −$50.00. No spread, commission or swap.
A made-up example (no spread, commission or swap). Realized P&L differs between A and B, but if you close the rest at the same price, the total is the same.

Worked example

A USD account buys #1, 0.1 lot (10,000 units) of EUR/USD at 1.0800, then #2, 0.2 lot (20,000 units) at 1.0900. With the price at 1.0850, it sells 0.2 lot.

A. Oldest first
#1: (1.0850 − 1.0800) × 10,000 = +$50.00
0.1 lot of #2: (1.0850 − 1.0900) × 10,000 = −$50.00
Realized: $0.00
Left open: 0.1 lot of #2 (−$50.00)

B. Offset against the same-size (0.2 lot) transaction
#2: (1.0850 − 1.0900) × 20,000 = −$100.00
Realized: −$100.00
Left open: #1, 0.1 lot (+$50.00)

Either way, closing the rest at the same 1.0850 gives a total of −$50.00. What changes is the realized P&L at that moment, and the entry price of what is left open.

The rule text does not say how part of a larger position should be matched. A is one way to count when matching oldest first. How a dealer takes this request, and how it handles partial closes, is something to check in your broker's documentation. How to calculate profit and loss is covered in how to calculate forex profit and loss.

Counting it in your records (you decide)

In a FIFO account, the result of each close may be matched to an older position rather than the one you had in mind. When you keep records, separating these makes them easier to review later:

Result of the group = realized P&L + open P&L of what is left + swap + commission

This article does not decide whether you should use a FIFO account or how to trade. The pip value calculator turns pips into money, and the swap calculator estimates swap.

Sources

  1. National Futures Association. Rule 2-43. Forex Orders (NFA Rulebook, checked October 17, 2026). https://www.nfa.futures.org/rulebook/rules.aspx?RuleID=RULE%202-43&Section=4
  2. National Futures Association. Notice I-09-10: Effective Date of NFA Requirements Regarding Forex Orders (April 13, 2009). https://www.nfa.futures.org/newsnotices/newsArticle.aspx?ArticleID=2273
  3. National Futures Association. Notice I-09-12: Revised Effective Date for Portions of NFA Compliance Rule 2-43(b) (May 5, 2009). https://www.nfa.futures.org/newsnotices/newsArticle.aspx?ArticleID=2281
  4. National Futures Association. Forex Transactions: Regulatory Guide. https://www.nfa.futures.org/members/member-resources/files/forex-regulatory-guide.html
  5. National Futures Association. Bylaw 306. Forex Dealer Members (NFA Rulebook). https://www.nfa.futures.org/rulebook/rules.aspx?RuleID=BYLAW%20306&Section=3
  6. National Futures Association. About NFA. https://www.nfa.futures.org/about/index.html
  7. MetaQuotes. Executing Trades: Closing positions using the FIFO rule (MetaTrader 5 Help). https://www.metatrader5.com/en/terminal/help/trading/performing_deals

Tools for this article

Pip value calculatorWhat one pip is worth, and P&L in pipsPosition size calculatorLot size from your risk and stop lossSwap calculatorTotal overnight swap from lots and nights

Log which position was closed.

Tiltnote is a trading journal you can use free with manual entries. On every trade you can log your strategy name, how you felt, whether you kept your rules, and a note. In a FIFO account, note which buy was actually closed and how you felt about it, and you can look back at it later.

Try Tiltnote free →Opens the Tiltnote web app. On the free plan, analysis and history show your most recent 14 days (older records are kept and unlock on the paid plan).

More articles

What is hedging in forex? Netting vs hedging accountsForex leverage limits by country and regionHow to calculate forex profit and lossForex order types: from market orders to OCO and If DoneWhat to write in a trading journalWhat is a lot in forex? How many units one lot isArticles →

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Updated 20 Oct 2026 · Run by Kenji Okumura, Representative, Tiltnote · About this site