FX Trading in Europe under threat - act now | Page 2 | Forex Factory

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FX Trading in Europe under threat - act now

  • #21
  • Jan 20, 2018 2:49am Jan 20, 2018 2:49am
Btw: wonder what will happen on Monday after the US govmnt. shutdown.
Wonder if it could trigger panic. Specially in the stock market, which is waiting for a spark to correct, or crash, or mini crash, or mega crash.
You know what you need to create fire right?
Fuel, oxygen and a SPARK.
  • #22
  • Jan 20, 2018 2:58am Jan 20, 2018 2:58am
Quoting triphop
OK now I've got your attention, ESMA are proposing to cap leverage as low as 5 to 1 across the whole of Europe. This isn't a joke, this will kill the industry and trading as we know it. The brokers are encouraging everyone to voice your concerns to ESMA during the consultation period which lasts until 5 Feb. DO IT! Even if you've never protested at anything before, get off your backside and go through the process below. Be calm, think about what you're saying. Explain how reducing leverage will lead to growth of unregulated brokers outside of the...
Thank you very much for your info! Although, I am not in Europe! But, I am sure this thread will help many traders!
  • #23
  • Jan 20, 2018 3:16am Jan 20, 2018 3:16am
Quoting triphop
Visit ESMA’s consultation page <a href="http://s202.t.en25.com/e/er?utm_campaign=2018%2001%2016%20FXCM%20LTD%20EN%20ESMA%20Response&amp;utm_medium=email&amp;utm_source=Eloqua&amp;s=202&amp;lid=30395&amp;elqTrackId=50e8b6729f564703bcd76837836adbc8&amp;elq=65f33e504bc7449498de4ed648b241cc&amp;elqaid=17333&amp;elqat=1" target="_blank" rel="nofollow">here</a>
Plese provide a direct Link, not this one which is from a FXCM campaign, with trackers.
Return To Disorder
  • #24
  • Jan 20, 2018 3:22am Jan 20, 2018 3:22am
Quoting cuchuflito
Btw: wonder what will happen on Monday after the US govmnt. shutdown.
Hi shutdown is nothing compare to that:
https://twitter.com/hashtag/ReleasetheMemo?src=hash
Happy pips.
Tomcat98
  • #25
  • Jan 20, 2018 5:42am Jan 20, 2018 5:42am
Quoting Mingary
This is all for the better. It's about time that forex loses it's casino appeal. (not to mention Binary Options and "cryptos" they should be banned ... like ... yesterday) Bad news for brokers-and-scammers.. . The following main features of CFDs and the way in which they have been distributed, marketed or sold across the EU have required increased attention by supervisors: - Retail investors are exposed to a significant risk of loss (both from trading and from transaction fees), which is magnified by the effect of high leverage. - The complexity...
i am very much in agreement with you here. the only thing i was thinking about is that certain companies that do not uphold their promise of "loss protection". that's just horrible and we simply cannot have that.

sure with less potential leverage we will have less volume, i think that's a fair assessment. but if "loss protection" is backed by the companies then the only thing we really have here is less pressure on the companies due to less potential equity available to the client. since if then clients fail at making money with so called equity then companies are left to maintain what ever negative balance is there.
  • #26
  • Jan 20, 2018 5:56am Jan 20, 2018 5:56am
I also think that quite a few traders that still want to have the same nominal cash returns from the past in medium/high leverage accounts, will now resort to financial loans in order to meet capital/margin requirements for equal past returns. Definitely not a good thing.
  • #27
  • Jan 20, 2018 8:06am Jan 20, 2018 8:06am
Quoting rockit
{quote} Please provide a direct Link, not this one which is from a FXCM campaign, with trackers.
See above quote.
  • #28
  • Jan 20, 2018 10:20am Jan 20, 2018 10:20am
Quoting cuchuflito
Remember the eurchf whopping 1500 pip drop in a few minutes? Stop losses where, in most cases, only activated at the worst price. Many daytraders, with high leverage were forced to sell their cars, and houses, and underwear. You can google the fact. People are still fighting in court. You might be a successful trader for years, and loose everything, I mean everything in half an hour. I'm not against daytrading, or high leverage, on the contrary....but people better understand all the risks involved.
That should never have happened. My broker sent a couple of warning E-mails and also raised the spread to some shocking amount to prevent CHF trades. They also honoured the stops of those who got decimated.

I check the spread and volume in all my trades. If spread is > 4 PIPS or volume is lean then do not trade.

I've backtested strategies during the grizzly periods of 2015 and 2008 and have not been decimated. Of course there's no guarantees.
  • #29
  • Jan 20, 2018 11:53am Jan 20, 2018 11:53am
Ladies and gents,

This is a thread of action. I know for a fact that many of you have gone through blood, sweat and tears to get to where you are now, and this will effect thousands reading right now. So...

- if you think this will effect you if they pass the regs - FEEDBACK NOW
- if you think this might effect you in the future - FEEDBACK NOW
- if you think it might not make a difference but you're not sure - FEEDBACK NOW

To cover a few other things -
1) pro status is a red herring. To each their own but by signing pro status you automatically lose much of the protection of retail clients.
2) The leverage range is 5 to 30. Once in place, it will be easy to knock it down to 5x. Happy with that? Thought not
3) FXCM tracking links removed - my bad, didn't check as copied and pasted that from their mail.

Now please, get signing.

Cheers
  • #30
  • Jan 20, 2018 11:54am Jan 20, 2018 11:54am
Quoting bdebaere
Responded. Leverage limits are okay but within reason. 20:1 seems a bit low for non-major pairs.
Top man
  • #31
  • Jan 20, 2018 11:56am Jan 20, 2018 11:56am
Quoting horvat
Thank you for creating the thread. I have already filled out the questionnaire and submitted. .
Great. More of this please
  • #32
  • Jan 20, 2018 1:27pm Jan 20, 2018 1:27pm
Quoting triphop
Explain how reducing leverage will lead to growth of unregulated brokers outside of the EU, and as a client you will happily move brokers that offer decent leverage.
Is this formulation coming directly from your broker who is asking you to promote it?

We remember our fellow US citizens who were sending the exact same warning to their governors, prior to their 1:50 restriction, Hedging and Fifo banning. At the same time, I suspect their brokers were using these mails in order to ask and obtain from their governors that all US citizens would be prevented to open any Forex trading account worldwide...that way they keep their business.

Who tells you that your broker doesn't have that in mind?
Don't give up on your dreams. Keep sleeping.
  • #33
  • Jan 21, 2018 12:00pm Jan 21, 2018 12:00pm
You mean is this an elaborate ploy orchestrated by brokers across the whole of Europe to screw their own clients?

I'm cynical at the best of times but no, there's a far simpler explanation - naked self interest - both of brokers, and us traders. I'm acting purely out of self interest, and I've no reason to believe that the brokers aren't either.

Lower leverage will mean traders opening accounts outside of the EU. For ESMA to ban all EU residents to open up accounts outside of the block is theoretically possible but would require way more collaboration, agreement, joined up thinking than the EU currently has in ANY department at the moment.

I know some people here think the entire future of the planet is entirely pre-determined, which gives them an excuse to sit on their arses and do nothing. However, for the rest of us, we should make every effort to change the direction of travel.
  • #34
  • Jan 21, 2018 12:09pm Jan 21, 2018 12:09pm
When great EU brokers are threatened by strict and bad regulation, they should move their brokerage to Australia
Make all mistakes in demo and rain in pips in live account
9jatrader All Time Return: 11.5%
  • #35
  • Jan 21, 2018 12:23pm Jan 21, 2018 12:23pm
Next they are going to regulate breathing, some people are just so bad at it.
  • #36
  • Jan 21, 2018 12:47pm Jan 21, 2018 12:47pm
Quoting triphop
You mean is this an elaborate ploy orchestrated by brokers across the whole of Europe to screw their own clients? I'm cynical at the best of times but no, there's a far simpler explanation - naked self interest - both of brokers, and us traders. I'm acting purely out of self interest, and I've no reason to believe that the brokers aren't either. Lower leverage will mean traders opening accounts outside of the EU. For ESMA to ban all EU residents to open up accounts outside of the block is theoretically possible but would require way more collaboration,...

It seems likely much of the big players in the financial industry will be happy for the proposed ESMA restrictions to be brought in. It will drive derivatives business to the biggest players as many smaller players will withdraw. It will reduce the openings for ordinary people to manage their own finances, driving them towards money managers and financial advisors and other such parasites. For the Chancellor, it eliminates a tax avoidance opportunity which although theoretical for most spreadbetters nevertheless exists and could be a political issue. I understand that the bigger CFD and SB providers the get most of their profits from a small % of very heavy clients, so the elimination of services to the guys with a measly £10k to play with won't bother them, might even reduce their overheads.
  • #37
  • Jan 21, 2018 2:01pm Jan 21, 2018 2:01pm
Quoting tomorton
{quote} It seems likely much of the big players in the financial industry will be happy for the proposed ESMA restrictions to be brought in. It will drive derivatives business to the biggest players as many smaller players will withdraw.
Agree with almost all of that; opening up the system increases the risk of outsiders exposing the flaws in it. The brokers are tiny fish, which is another reason I don't buy their influence. I did once see a SB customer breakdown ( 8 years ago so may have changed) and certainly then, a lot of the smaller account were worth a lot, but the churn was so high there was a constant need to bring in fresh blood.
  • #38
  • Jan 21, 2018 2:24pm Jan 21, 2018 2:24pm
Quoting triphop
You mean is this an elaborate ploy orchestrated by brokers across the whole of Europe to screw their own clients? I'm cynical at the best of times but no, there's a far simpler explanation - naked self interest - both of brokers, and us traders. I'm acting purely out of self interest, and I've no reason to believe that the brokers aren't either. Lower leverage will mean traders opening accounts outside of the EU. For ESMA to ban all EU residents to open up accounts outside of the block is theoretically possible but would require way more collaboration,...
You didn't answer my question. Was that formulation your own idea or was it something written by your broker who asked you to spread it as much as you can?

The leverage reduction will come to Europe, because the CFTC and NFA are pushing for it and retail traders have no organised lobby to defend them. But in this case, your broker wants you to stay with him, and a ban for European traders to have accounts outside of EU/USA will not only allow him to keep you, but it will actually bring him much more customers (all European customers who currently have forex accounts in other countries). Since he belongs to a lobby paying a lot of taxes, he can obtain it. Your mails will help him, by proving that he will lose his business, will have to fire his employees....because his current clients will go overseas. Simple. See what happened in the US back in 2010.

Don't even think it's not feasible. EU are very organised when it comes to limit their citizen rights. Brokers have already a list of dozens of countries whose citizens are banned. Japanese traders are already banned in most countries. European traders have just been banned by Pepperstone in Australia (seems like an anticipation of something coming...). IMHO, all overseas brokers will be told to open a branch in EU in order to keep their EU clients. If a broker doesn't comply with the rule, his name will be blacklisted by other financial institutions or clearing houses or liquidity providers, which mean the immediate end of his business.

Your intention is very good and I salute it, but just be wary of what you are doing. That said, I hope to be wrong.
Don't give up on your dreams. Keep sleeping.
  • #39
  • Jan 21, 2018 4:02pm Jan 21, 2018 4:02pm
Quoting Artcool
{quote} You didn't answer my question. Was that formulation your own idea or was it something written by your broker who asked you to spread it as much as you can? The leverage reduction will come to Europe, because the CFTC and NFA are pushing for it and retail traders have no organised lobby to defend them. But in this case, your broker wants you to stay with him, and a ban for European traders to have accounts outside of EU/USA will not only allow him to keep you, but it will actually bring him much more customers (all European customers who...
Well I really hope you're wrong too. The prompt to complain came from them, this is one of the ideas they gave but the only one I think has traction. The other point I've made is that it reduces amount traders are required to entrust with brokers which is a reassuring safety net.

if it's a stitch up, and everything you say is true, it's a stitch up, and there's nothing we can do to prevent it. Opening up accounts in other jurisdictions will be banned whatever, and us adding fuel to the fire won't make a blind bit of difference.

If it's not a stitch up and you're wrong, our feedback could mean they won't be as punitive on the leverage restrictions.

Having gone through the proposals carefully, if they implement mandatory negative balance protection, leverage will have to be tailored to the expected volatility of the currency pair anyway by the brokers (for their own safety). This means a far more flexible and ultimately beneficial arrangement for all traders.

If however they want to centralise control, well, markets don't work that way, and neither should regulators.
  • #40
  • Jan 21, 2018 5:09pm Jan 21, 2018 5:09pm
Welcome to our world, in the US. OK, it's worse, at 30:1. But seriously, who actually uses all of their available leverage? Scalpers? The more capital you have, the less leverage you'll need to use, to make a living, or whatever other goal you have trading FOREX. Also, you retain the ability to hedge and trade CFDs. I would LOVE to do these things.
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