What does prohibited by fifo rule in mt4 mean ?
Sometimes when you try to close a trade in Metatrader platfrom you will get this error message in journal tab : “Prohibited by FIFO rule”. Using Mt4 platform as FXCM for example, you can see this problem very often especially if you are frequent trader.
First In First Out simply means that when you have multiple positions in the same currency pair, the position which was first opened will be the first to be closed. This execution process is the common practice in the US equities and futures markets.
Step 1 : Sort trades by opening time.
step 2 : See oldest position
Step 3: Close the oldest position and than the second opened position, etc.
If you want to avoid this problem pick Mt4 brokers platform which alow hedging (hedging is not prohibited) and platforms which do not have FIFO rule. Accounts without FIFO rule you can find at non USA brokers. For example, I had fxcm prohibited by fifo rule problem few yars ago and I fixed using this strategy.