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FX Trading in Europe under threat - act now

  • #101
  • Feb 1, 2018 1:04am Feb 1, 2018 1:04am
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...
I cannot locate "Response Form" from the "Call for Evidence" page.
  • #102
  • Feb 1, 2018 1:35am Feb 1, 2018 1:35am
Quoting todor113
{quote} do you really think Esma gives a damn what retail traders want? Or they had not decided what theyre going to do before asking any questions?

They will have consulted major players in the industry privately before doing anything. However, that doesn't make it a foregone conclusion as the private retail trader community would not have been consulted beforehand. The strong response does raise the possibility the proposed measures might be cancelled, delayed or diluted. The last thing public servants want to do is recommend anything that will embarass their political masters.
  • #103
  • Feb 1, 2018 2:29am Feb 1, 2018 2:29am
Imho no one should use more than 1:20 leverage to trade Anything above that only means you are under capitalised and losses will come by a thousand cuts.
ESMA is just being cruel to be kind so to protect the interests of the retail traders. Brokers will be hit by lower trade volumes and less business and bigger liquidity outlays and are most likely to oppose such rulings. Overall it's a positive news for most retail traders. Anyway this is old news and I was notified months ago.

GS
  • #104
  • Feb 1, 2018 2:44am Feb 1, 2018 2:44am
Quoting genghistar
Imho no one should use more than 1:20 leverage to trade Anything above that only means you are under capitalised and losses will come by a thousand cuts. ESMA is just being cruel to be kind so to protect the interests of the retail traders. Brokers will be hit by lower trade volumes and less business and bigger liquidity outlays and are most likely to oppose such rulings. Overall it's a positive news for most retail traders. Anyway this is old news and I was notified months ago. GS

You're wrong with your sweeping generalisation about only using 1:20 leverage. Leverage isn't dangerous as such, it depends how you use it, how you trade. A blanket restriction on leverage rates will look like a success a year later to the regulators because they will be able to point to the reduction in traders busting their accounts in the 12 months - but that's only because it eliminated trading as we see it today. Same as if you closed all the roads to cars you could claim a huge success in road safety - but meanwhile nobody can get to work.

The ESMA proposals are not new - they have already floated this, as has the UK FCA - but the window for traders to reply to the proposals is new and is now only open a few more days, until the 5th.
  • #105
  • Feb 1, 2018 2:57am Feb 1, 2018 2:57am
Quoting genghistar
Imho no one should use more than 1:20 leverage to trade Anything above that only means you are under capitalised and losses will come by a thousand cuts. ESMA is just being cruel to be kind so to protect the interests of the retail traders. Brokers will be hit by lower trade volumes and less business and bigger liquidity outlays and are most likely to oppose such rulings. Overall it's a positive news for most retail traders. Anyway this is old news and I was notified months ago. GS
No one should keep all their funds at broker account. Leverage allows to keep just a fraction of funds and still trade as with all funds. Leverage is only for that.
  • #106
  • Feb 1, 2018 2:59am Feb 1, 2018 2:59am
Quoting tomorton
{quote} You're wrong with your sweeping generalisation about only using 1:20 leverage. Leverage isn't dangerous as such, it depends how you use it, how you trade. A blanket restriction on leverage rates will look like a success a year later to the regulators because they will be able to point to the reduction in traders busting their accounts in the 12 months - but that's only because it eliminated trading as we see it today. Same as if you closed all the roads to cars you could claim a huge success in road safety - but meanwhile nobody can get...
Like I said this is only my opinion and you are entitled to yours too.
I don't understand how and why you are irritated by someone else's opinion. Opinions are like asshole everybody has one.

GS
  • #107
  • Feb 1, 2018 5:49am Feb 1, 2018 5:49am
Quoting genghistar
{quote} Like I said this is only my opinion and you are entitled to yours too. I don't understand how and why you are irritated by someone else's opinion. Opinions are like asshole everybody has one. GS

Doesn't it strike you as odd that when you post its expression of opinion, when I post its because you think I'm irritated?
My opinion is you have a high opinion of your own opinions.
  • #108
  • Feb 1, 2018 6:29am Feb 1, 2018 6:29am
What many don't understand is that lower leverage, directly impacts your drawdown.
I get sick every time somebody says they don't care about leverage, because they don't even use their 1:500, but trade with less.
I trade with 1:1 or 1:2 maximum, but I do have a 1:500 account. Why?
Because the less margin my positions require, the more I can control my drawdown.
This is more important the smaller your account gets.

A change will destroy any "complicated" trading systems.
Of course, you you just get in and out you are not affected. But don't use your limited FX knowledge to say you don't care about leverage, just because you don't understand it.

If the whole point is to PROTECT people, then add some leverage request or whatever. But I mean seriously, how stupid of a trader must somebody be, if he doesn't understand the risks involved in trading, after it is printed everywhere and after signing an agreement with their broker where it literally states the risks of trading CFDs?!
If after all that, somebody still goes to the 5min chart and opens a maxed out 1:500 position with their micro account, it's ther fault and they don't deserve nothing but getting their acc blown.

Why do serious retail traders have to bear the cross for their mistakes, their inability to learn and their stupidity?


Again: I for one see high leverage (low margin requirements) as a blessing and a safty feature. Provided you learn how to use it right.
  • #109
  • Feb 1, 2018 6:32am Feb 1, 2018 6:32am
Quoting JeremyV
But I mean seriously, how stupid of a trader must somebody be, if he doesn't understand the risks involved in trading, after it is printed everywhere and after signing an agreement with their broker where it literally states the risks of trading CFDs?!
Is this level of stupidity enough? It is less complex than forex, right?

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Inserted Video
  • #110
  • Feb 1, 2018 7:27am Feb 1, 2018 7:27am
Quoting JeremyV
What many don't understand is that lower leverage, directly impacts your drawdown. I get sick every time somebody says they don't care about leverage, because they don't even use their 1:500, but trade with less. I trade with 1:1 or 1:2 maximum, but I do have a 1:500 account. Why? Because the less margin my positions require, the more I can control my drawdown. T
Exactly this. There are other reasons too for using more leverage, all the domain of experienced traders and this potentially is closing off profitable and useful ways of trading.

Banning binaries? Good. It was always a marketing fudge for opaque derivatives pricing. Either trade options properly or ban the bullshit in between.
Negative balance protection? OK - this will by default reduce leverage because brokers had the insurance of being able to chase you down for your house and home if you didn't pay, but on balance, this makes sense.
Capping leverage? No good reason whatsoever other than to stop the rubes rinsing their own accounts in their learning phase.

The faux concern of wanting to protect the masses from their own fat-fingered mistakes is pure BS.

It's dead simple...

1) You either know what you're doing, in which case you will unquestionably want to keep leverage as the broker's prerogative . You should feedback.
2) You don't know what you're doing yet - in which case, you will want leverage to remain the same in the future. You should feedback.
3) You don't know what you're doing, and you want someone to come in a mollycoddle you and stop you losing money, in which case you shouldn't be near a trade terminal. nor a bank account. Nor any sharp objects. You should go home.
  • #111
  • Feb 1, 2018 7:28am Feb 1, 2018 7:28am
Quoting Alcopop
{quote} I cannot locate "Response Form" from the "Call for Evidence" page.
It's one of only two downloads at the foot of the page.
  • #112
  • Feb 1, 2018 8:05am Feb 1, 2018 8:05am
Quoting triphop
{quote} 3) You don't know what you're doing, and you want someone to come in a mollycoddle you and stop you losing money, in which case you shouldn't be near a trade terminal. nor a bank account. Nor any sharp objects. You should go home.
Let me be devil's advocate...

By your logic, anybody who is not experience car engineer, should never attempt to get inside any car. Obviously it was not Ford that was responsible for design flow and obviously regulation introduced to minimize such a risk are entirely unnecessary

https://www.popularmechanics.com/car...to-fuel-tanks/

Have you ripped off and threw away your air bags from your car already?

This analogy does not convince you? How about that one...

...unless you are expert mathematician in probabilities and additionally experienced psychologist specializing in human addiction, you should never ever touch pokie machine (slot machine), no matter how accessible is it and companies that try to hook you in are completely innocent...

https://www.theguardian.com/australi...o-be-addictive

Inserted Video


Are we getting closer...?
  • #113
  • Feb 1, 2018 9:18am Feb 1, 2018 9:18am
You devil you !

Well slots are 100% made to be addictive and they have the most appalling win ratios. Noone in the history of slots has ever made a living playing them.

Cars are highly dangerous in the wrong hands. As is trading. So regulating sales patter and all that jazz makes total sense and even - god forbid- ensuring they know what they're doing before they let you loose on high leverage. Fine. Who could complain?

But because there are road accidents, noone would say the world cannot drive would they? There already is a 'speed limit' in trading at 50:1 in various parts of the world, and that seems ample for Europe too. But don't make it 10mph for everyone just because some learner drivers go careering off the roads.

And - not aimed at you - but there seems to be a vocal element in FF of late that sees they have some kind of moral obligation to tell the world that successful trading isn't possible. I have no idea of why someone would spend their life trying to tell the world this without doing proper due diligence to prove it one way or anther, and neither do I care - but it appears to be tainting the debate and the ethos of this place. Which is a shame.
  • #114
  • Feb 1, 2018 9:26am Feb 1, 2018 9:26am
Spot on, folk need to be discouraged from risky trading, not encouraged. The French authorities recently conducted a survey on CFD trading and iirc 90% of clients lost and the average loss was approx €10k, that’s bonkers and needs to stop. Most people haven’t got a clue how to trade, and they’ll never understand that if you want to take pocket money out of the market with a robust strategy, let’s say 5k a year, then you’ll need circa 10k minimum to achieve that. Even 1% return/gains a week would be an exceptional performance, yet these forums will still be chokka full of blurts claiming they’re making bank with their never before seen (yawn) strategies.

The USA took steps to limit risk and leverage, Europe will follow suit and no amount of bleating to your broker will stop it and tbh I’ll be happy to see the back of the likes of IG, PLUS500, CMC etc.


Quoting genghistar
Imho no one should use more than 1:20 leverage to trade Anything above that only means you are under capitalised and losses will come by a thousand cuts. ESMA is just being cruel to be kind so to protect the interests of the retail traders. Brokers will be hit by lower trade volumes and less business and bigger liquidity outlays and are most likely to oppose such rulings. Overall it's a positive news for most retail traders. Anyway this is old news and I was notified months ago. GS
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #115
  • Feb 1, 2018 9:30am Feb 1, 2018 9:30am
On the basis that approx 98% lose trading FX, that sentiment graphic is gloriously ironic.

Quoting GU-Night
The ESMA proposals can affect any retail trader in the world, sooner or later. If you didn't reply to ESMA already, share your view: https://replytoesma.trading/ {image} {image}
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #116
  • Feb 1, 2018 9:43am Feb 1, 2018 9:43am
Quoting Spreadbetter
Spot on, folk need to be discouraged from risky trading, not encouraged. The French authorities recently conducted a survey on CFD trading and iirc 90% of clients lost and the average loss was approx €10k, that’s bonkers and needs to stop. Most people haven’t got a clue how to trade, and they’ll never understand that if you want to take pocket money out of the market with a robust strategy, let’s say 5k a year, then you’ll need circa 10k minimum to achieve that. Even 1% return/gains a week would be an exceptional performance, yet these forums will...
You guys have been FF members since 2012 and you still don't understand what leverage is and how it can be used. Seen from that perspective I understand the ESMA proposals.
  • #117
  • Feb 1, 2018 9:44am Feb 1, 2018 9:44am
Quoting Spreadbetter
On the basis that approx 98% lose trading FX, that sentiment graphic is gloriously ironic. {quote}
Is that because of leverage? Or is that because of people who don't know what they are doing but believe they are going to be rich soon? High leverage or low leverage, these people are going to lose all their money.
  • #118
  • Feb 1, 2018 10:22am Feb 1, 2018 10:22am
Delusional, on the basis that I didn’t refer to leverage, moreover I was referring to ways to discourage fantasists and idiots (do you identify with either group?) to get out of the game, then wtf are you talking about?

As for “using leverage”? Hahahahaha, yeah, right...

Quoting GU-Night
{quote} You guys have been FF members since 2012 and you still don't understand what leverage is and how it can be used. Seen from that perspective I understand the ESMA proposals.
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #119
  • Feb 1, 2018 3:37pm Feb 1, 2018 3:37pm
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...

Righteously said, the days of the bucket shops are almost over, this actually happened back in the 19th and early 20th century with stocks. Cryptocurrencies? Yes, it is a safe haven for the next bucket shops that are being squeezed out by the CFTC which were alluring FX traders and are in line just waiting for every sucker to fall prey to them, should take a look at some of the CFTC's literacy on cryptocurrencies for those that think they are playing around. Aside, from that, I have never understood the mentality of some traders thinking that high leverage will give them always an edge since without volatility leverage is useless. If the asset class is not moving, no momentum, whatever, then what is the use of high leverage? last I check professionals seek volatility, not high leverage.

Don't throw your pearls to the swine, they'll downplay anything that strays away from the professional trading style.
They wanna push you off the path with their frequency wires
  • #120
  • Feb 1, 2018 4:15pm Feb 1, 2018 4:15pm
Quoting Quantum3
{quote} Righteously said, the days of the bucket shops are almost over, this actually happened back in the 19th and early 20th century with stocks. Cryptocurrencies? Yes, it is a safe haven for the next bucket shops that are being squeezed out by the CFTC which were alluring FX traders and are in line just waiting for every sucker to fall prey to them, should take a look at some of the CFTC's literacy on cryptocurrencies for those that think they are playing around. Aside, from that, I have never understood the mentality of some traders thinking...

As soon as people start talking about bucket shops I know they're talking about something they know nothing about. Since the only people who know anything about "bucket shops" are those who run them or their clients, why would I take the advice of either of those two groups? If you work for one, we have nothing in common. If you trade with one, you're a mug, even by your own words.

If you don't do either, how do you back up what you say?
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