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Breaking: ESMA finalizes new rules to govern leveraged trading

  • #61
  • Mar 30, 2018 8:35am Mar 30, 2018 8:35am
Quoting Spreadbetter
There is only one ‘class’ of retail gambler bleating about this decision; the undercapitalised, unprofessional, out of control loser and fantasist. If you can’t exist under this new environment then you had no place being in this business. {quote}
People not beeing able to realize, that their own failure can not subsequently be shaved over a comb are the true threat!

Who are you to judge and "classify" other people? I claim to be much more successful using excessive leverage than you with your disgusting elaborations.

https://www.forexfactory.com/showthr...3#post10916513

Prove me wrong or leave it.
  • #62
  • Mar 30, 2018 8:55am Mar 30, 2018 8:55am
Quoting Spreadbetter
by your analogy the authorities shouldn’t intervene in any form of reckless gambling, were and when there’s absolute proof that hopelessly addicted gamblers are simply and easily, being parted with their money. ESMA have calmly and forensically analysed all the available data and decided enough is enough. They haven’t banned CFD/FX/spreadbetting, they’ve judiciously applied well overdue checks and balances to a process that required intervention. There is only one ‘class’ of retail gambler bleating about this decision; the undercapitalised, unprofessional,...
yup i agree with leverage limitation, and for you 1:30 seems okay. but what about others? they have public consultation before the rules coming in but it seems they have their agenda and "research" set firm before that. i have no gripe over making something better but this needs to be democratic, not one way like its going right now.

you seems risk averse and if its working for you thats good but other opinions have to be respected regardless. not all trader working with large amount of capital, which enables 10% per annum would make a comfortable living for them. not all trader as risk averse as you.

Quoting Spreadbetter
So if that’s anyone reading this post, then use this decision as a line in the sand, to reevaluate your reasons for trying to gamble on markets and your relationship with it. {quote}
so whats considered gambling for you? overleveraged? by not having proper trading plan? for me even if you are well capitalised and having proven trading plan you will eventually have losing trades. because by nature trading/investing have uncertain outcome. the best we can do is to have positive expectancy, just like professional gambler / poker player.
  • #63
  • Mar 30, 2018 9:11am Mar 30, 2018 9:11am
Quoting Spreadbetter
Er, firstly; when using leverage it isn’t “your money”.
no, its my money 100%. so lets say the broker is offering 1:100. if they have client deposit 1 Million, do you think they have 100 million USD as their own capital to cover for traders? maybe im missing something?
  • #64
  • Mar 30, 2018 9:15am Mar 30, 2018 9:15am
Quoting Spreadbetter
Er, firstly; when using leverage it isn’t “your money”. Secondly; by your analogy the authorities shouldn’t intervene in any form of reckless gambling, were and when there’s absolute proof that hopelessly addicted gamblers are simply and easily, being parted with their money. ESMA have calmly and forensically analysed all the available data and decided enough is enough. They haven’t banned CFD/FX/spreadbetting, they’ve judiciously applied well overdue checks and balances to a process that required intervention. There is only one ‘class’ of retail...
Let me ask you then - if banks can guarantee with deposits (my money) only 3% of the loan amounts they give, why I’m not able to use the same ratio as market participant?
  • #65
  • Mar 30, 2018 9:17am Mar 30, 2018 9:17am
My spot brokers have said nothing and im assuming it doesnt apply there, but I know my spread bet broker were hassling me to join to join the fight some time ago. Ive never understood the whole lower leverage thing anyway......Your method either works or it doesnt. using lower amounts just means you have to deposit larger amounts with unscrupulous brokers. Leverage allows us to operate at the required amount without depositing our life savings with a stranger.
People saying 30:1 is enough? why ? only if you have mountains of money to deposit, in which case why are you messing around with forex? Those people who its trying to protect will just turn to some other way to plough away their money. Gamblers will always gamble.
  • #66
  • Mar 30, 2018 10:08am Mar 30, 2018 10:08am
Quoting Spoon138
My spot brokers have said nothing and im assuming it doesnt apply there, but I know my spread bet broker were hassling me to join to join the fight some time ago. Ive never understood the whole lower leverage thing anyway......Your method either works or it doesnt. using lower amounts just means you have to deposit larger amounts with unscrupulous brokers. Leverage allows us to operate at the required amount without depositing our life savings with a stranger. People saying 30:1 is enough? why ? only if you have mountains of money to deposit, in...
That was exactly what I’m shouting - this decision has nothing to do with protection. It is purely lobbying sinister regulation effort to benefit some market participants at expense of others. Seems that ESMA has been quite well backed up by large lobbying bodies. The retail trader is just a subject here - and ultimately it will be the net loser of this decision. Only retailers with 50 000+ will remain on the market - this is the minimum liquidity for conceivable annual profit expectations.
  • #67
  • Mar 30, 2018 10:45am Mar 30, 2018 10:45am
Quoting michaelpelly
{quote} The retail trader is just a subject here - and ultimately it will be the net loser of this decision. Only retailers with 50 000+ will remain on the market - this is the minimum liquidity for conceivable annual profit expectations.
That is something that needs to discuss. Suggest a majority simply transfer their funds elsewehre, it is the EU which is losing imho. Traders can still continue trading the way they used to be. But without transparency a given percentage of potential profit will be out of reach regarding taxes. On top of that brokers outside of the EU are generating their taxable income out of reach as well.
  • #68
  • Mar 30, 2018 11:05am Mar 30, 2018 11:05am
Can FCA ignore ESMA's statement?
  • #69
  • Mar 30, 2018 11:35am Mar 30, 2018 11:35am
Quoting grandaevus
Can FCA ignore ESMA's statement?
My understanding is, Yes it can, however, it would tend to follow ESMA recommendations (distinctly remember reading as much in a FCA statement but can't remember where I'm afraid).

Curious situation we have here in London with The City, which historically has tended to style and present itself as an independent entity, produced the Gina Miller situation that is sticking spanners in the works of Brexit. It would appear that The City is a little more Pan-European than perhaps it would like people to realise. Time will tell I guess.
  • #70
  • Mar 30, 2018 3:25pm Mar 30, 2018 3:25pm
It is interesting to read here most of the talk is about protecting the poor retail investor and how this is great or this is bad but my twitter feed (of very smart pro traders) is talking that this is all about the amount of capital a retail forex broker needs to keep on hand.

The belief that any of this is to help or hurt the retail trader is crazy. This is all about helping those who can afford lobbyists. During any of the ESMA discussions, if they talked 5 minutes about how to protect the poor SOB's losing their ass in forex with high leverage, I would be shocked.
Model 3 All Time Pips: -887
  • #71
  • Edited 4:44pm Mar 30, 2018 4:30pm | Edited 4:44pm
I repeat with extra emphasis; the only fukcwits I read who are upset about this development are the Walter Mitty fantasists who dream of being the big swinging trading dick, anyone with a professional attitude and approach will simply adapt and continue to thrive. It's the tiny dick account holders who need to stop squealing, adapt or die, your choice chump. But moaning your tits off on here, whilst desperately looking for a loop hole, is sad behaviour. If you can't make it work then choose bingo, it might be more your level.

Quoting Drolph
{quote} People not beeing able to realize, that their own failure can not subsequently be shaved over a comb are the true threat! Who are you to judge and "classify" other people? I claim to be much more successful using excessive leverage than you with your disgusting elaborations. https://www.forexfactory.com/showthr...3#post10916513 Prove me wrong or leave it.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #72
  • Mar 30, 2018 5:52pm Mar 30, 2018 5:52pm
Quoting Spreadbetter
If you can't make it work then choose bingo, it might be more your level. {quote}
LOL
  • #73
  • Mar 30, 2018 8:16pm Mar 30, 2018 8:16pm
Quoting Spoon138
My spot brokers have said nothing and im assuming it doesnt apply there, but I know my spread bet broker were hassling me to join to join the fight some time ago. Ive never understood the whole lower leverage thing anyway......Your method either works or it doesnt. using lower amounts just means you have to deposit larger amounts with unscrupulous brokers. Leverage allows us to operate at the required amount without depositing our life savings with a stranger. People saying 30:1 is enough? why ? only if you have mountains of money to deposit, in...
"Your method either works or it doesn't".
I hope you understand that even the best method fails if you overleverage.
Come with me if you want to live....
  • #74
  • Edited Mar 31, 2018 6:43pm Mar 30, 2018 8:25pm | Edited Mar 31, 2018 6:43pm
Comparisons and summaries re #post 49 - https://www.forexfactory.com/showthr...8#post10921918

In accordance with above referenced post the following table should be clear. (may have typos - accommodate accordingly)

#SL: Number of consecutive 200 point SL sustained before 100 % margin.
300:1 % risk: SL /(total balance - margin) x 100
30: 1 % risk: SL /(total balance - margin) x 100
300:1 % profit: 1,000 point TP/(total balance = balance + margin) x 100 // note: balance in this instance refers to tradeable equity which excludes margin.
30:1 % profit: 1,000 point TP/(total balance = balance + margin) x 100 ..// note: balance in this instance refers to tradeable equity which excludes margin.
300:1 - 30:1 balance increase: multiple factor balance needs to be increased by to accommodate 30:1 margin while retaining same SL risk against balance - margin.

#SL - > 100; 300:1 % risk -> 1; ...30:1 % risk -> 1; ...300:1 % profit -> 5; .......30:1 % profit -> 4.04; ...300:1 - 30:1 balance increase -> x 1.2347.
#SL - > 50;.. 300:1 % risk -> 2; ...30:1 % risk -> 2; ...300:1 % profit -> 9.55; ..30:1 % profit -> 6.8; .....300:1 - 30:1 balance increase -> x 1.4036
#SL - > 40;. .300:1 % risk -> 2.5; 30:1 % risk -> 2.5; 300:1 % profit -> 11.8; ..30:1 % profit -> 7.88; ...300:1 - 30:1 balance increase -> x 1.4989.
#SL - > 18;.. 300:1 % risk -> 5.5; 30:1 % risk -> 5.5; 300:1 % profit -> 24.58; 30:1 % profit -> 12.06; .300:1 - 30:1 balance increase -> x 2.038.

Note: Both 300:1 and 30:1 margins are the same risk as SL risk is calculation is against -> tradable equity= balance excluding margin(non tradeable) and not -> balance including margin. Therefore in both cases if tradable equity is depleted to 100 % margin the exact same amount will be lost - ref post 49. The difference being that at 300:1 - 0.01 lot a margin retention of £3.33 will remain in the account and at 30:1 - 0.01 lot a margin retention of £33.33 remains.

At 1 % risk trader will have to increase total balance by x 1.2347. Most traders should not find this prohibitive.
At 5.5 % risk trader will have to increase total balance by x 2.038. Most traders will find this prohibiting at larger balance requirements.

At 1 % risk a 1,000 point profit will drop from 5 % to 4.05 % against total balance.
At 5.5 % risk a 1,000 point profit will drop from 24.58 % to 12.06 % against total balance.

To new traders-day trading: Markets are ruthless. Perhaps, only the ruthless survive. Work out a ruthless limit on risk expenditure per (potential) trading session - ruthlessly pace risk expenditure across trading sessions. The dictum - 'when the going gets tough the tough get going' - is suicidal in trading. Re trading - 'when the trading gets tough the tough ruthlessly go away and stay away'. That's the tough part - staying out the market. Not every day is a trading day - learn to identify when trading conditions are ideal (amongst others, historical review of day by day trading conditions may assist) - ruthlessly conserve risk - may ruthlessly survive.

No time for further comments.
TSLA: 30-Dec-22 123.18 // 16-Jun-23 260.54 **111.51%**
  • #75
  • Mar 30, 2018 8:56pm Mar 30, 2018 8:56pm
Quoting Spoon138
My spot brokers have said nothing and im assuming it doesnt apply there, but I know my spread bet broker were hassling me to join to join the fight some time ago. Ive never understood the whole lower leverage thing anyway......Your method either works or it doesnt. using lower amounts just means you have to deposit larger amounts with unscrupulous brokers. Leverage allows us to operate at the required amount without depositing our life savings with a stranger. People saying 30:1 is enough? why ? only if you have mountains of money to deposit, in...
You don't need mountains of cash for 30:1 to be enough. This is a crude generalisation.
Come with me if you want to live....
  • #76
  • Edited 3:04am Mar 31, 2018 2:51am | Edited 3:04am
Quoting Spreadbetter
I repeat with extra emphasis; the only fukcwits I read who are upset about this development are the Walter Mitty fantasists who dream of being the big swinging trading dick, anyone with a professional attitude and approach will simply adapt and continue to thrive. It's the tiny dick account holders who need to stop squealing, adapt or die, your choice chump. But moaning your tits off on here, whilst desperately looking for a loop hole, is sad behaviour. If you can't make it work then choose bingo, it might be more your level. {quote}
I proved my statements by starting to support facts and numbers - you by using foul language and genitals to emphasize your dotingness. Missed your chance. The real loser simply increases the swearing instead of showing data. The only thing that really matters in this business.

But go on with your "professional" insulting .. on an internet forum .. I am taking your pips meanwhile.
  • #77
  • Mar 31, 2018 4:38am Mar 31, 2018 4:38am
Quoting Spreadbetter
I repeat with extra emphasis; the only fukcwits I read who are upset about this development are the Walter Mitty fantasists who dream of being the big swinging trading dick, anyone with a professional attitude and approach will simply adapt and continue to thrive. It's the tiny dick account holders who need to stop squealing, adapt or die, your choice chump. But moaning your tits off on here, whilst desperately looking for a loop hole, is sad behaviour. If you can't make it work then choose bingo, it might be more your level. {quote}
Good, good (with Emperor voice) - bring it, lash it out hard! Stomp them, put them in their place...I do not laugh only out of respect that angry people need social help instead of ostracism...
  • #78
  • Mar 31, 2018 4:42am Mar 31, 2018 4:42am
Keep a check on your hysteria and delusions.


Quoting michaelpelly
{quote} Good, good (with Emperor voice) - bring it, lash it out hard! Stomp them, put them in their place...I do not laugh only out of respect that angry people need social help instead of ostracism...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #79
  • Mar 31, 2018 4:47am Mar 31, 2018 4:47am
Quoting Spreadbetter
Keep a check on your hysteria and delusions. {quote}
Ok, I’m stopping because it’s getting medical .

Battleaxes are buried .
  • #80
  • Mar 31, 2018 10:09am Mar 31, 2018 10:09am
Quoting Ill-b-back
{quote} "Your method either works or it doesn't". I hope you understand that even the best method fails if you overleverage.
yeah...but we're not talking about overleveraging? thats a risk issue surely, we're talking about the ability to use higher leverage allowing us to keep smaller amounts in our accounts. All the rules mean in this respect is that im going to have to deposit more of my money with the spreadbet broker and trade higher amounts to achieve the same goal (which i wont be). my risk remains the same with the trade: £ per pip and potential loss in pips.
30:1 is enough? maybe for some who are happy to deposit all their equity in one broker...but not for me. I much prefer to spread my risk by using 3 brokers.
To me its all a bit fishy, as others have suggested. On the surface it looks like its to stop the crash and burn trading and potentially reduce 'the masses' from trading with fridays pay cheque, but to me it just means the desperate ones will be re-mortgaging their house instead and depositing that to learn with.
Anyway...no hard feelings.
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