The National Futures Association has banned hedging in all forex accounts in the United States. The reason for the ban is unclear at this point.
Hedging is when you are allowed to enter offsetting positions at the same time. In other words, you can be long 1 lot of GBPUSD and short 1 lot of GBPUSD without the second position closing out the first.
I don't think that this new rule is going to have that much of an impact on most forex traders. The reason being is that most forex traders use a hedge to ‘stop the bleeding' on a position in the hopes that it will come back.
In my opinion, you are better off just closing the position and reversing instead of having to worry about two bad positions instead of one.
The only reason I could see to hedge is if you were entering on two different setups at the same time. For example maybe you took a breakout trade, but then a MACD divergence trade also sets up in the opposite direction while the breakout trade was on.
Anyway, this new rule doesn't impact me at all. If you still want to do this and you are a US citizen, then you will want to check out this next part.
Use Multiple Accounts to Get Around the Hedging and FIFO Rule
If you want to learn more about hedging Forex trades with a US broker, there is a way to do it. Simply open two accounts and only take long trades in one account and short trades in another account.
Some brokers will also allow you to get around the FIFO rule by opening positions with different lot sizes. This is certainly the case with Oanda.
Also consider using different brokers. This spreads out your risk and also allows you to hedge, cross broker. The only downside is that it is not easy to transfer money between accounts.
This may seem like a big setback, but it is relatively minor. With a little preparation, you can still hedge and get around FIFO in a US trading account.