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All open positions are liquidated in the order they were opened. This means the earliest opened position will be the first to be closed.
The First In First Out (FIFO) principle in trading stipulates that open positions are closed in the sequence they were opened. This ensures that the oldest position is liquidated first, which is particularly relevant in forex trading to maintain order and prevent manipulation. Adhering to FIFO can affect tax reporting and strategy, especially in markets where position management is key.
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