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FX Trading in Europe under threat - act now

  • #381
  • Mar 27, 2018 6:22pm Mar 27, 2018 6:22pm
Quoting alphaomega
A few ideas on the topic from me. The facts: 1. The new regulations apply only to retail traders. 2. By default the retail traders are categorized as non-professional investors! The potential solution: From a legal standpoint we still have a loophole in the system. You can ask your broker to categorize you as professional client. The benefit from this is that you will not be affected by the new restrictions. The downside is that you will lose all kinds of protections. There is no protections for the professional investors. So you are on your own...
I even think, this will be the large scale solution for most of the affected brokers. While the lose of protection is something that should not be underestimated, the situation would just be the same as it was until on or two years ago by default. Nearly no protections, full risk.

As a conclusion, the ESMA would lower the "average" protection for a majority of clients even within the EU, while beeing under regulation elsewhere (AU for example) would provide a much safer place in comparison.

Good Job, ESMA.
  • #382
  • Mar 27, 2018 8:38pm Mar 27, 2018 8:38pm
System vendors and scammers with live accounts will be scrambling to readjust and adapt to this new ruling. First they are unlikely to be able to trade 28 pairs anymore. Second they need to downgrade to mini or micro accounts to stay within the risks allowed. Third there will be most likely working with rogue brokers who will find ways to circumvent this new rulings. Lastly most loud and egoistic traders will be hiding their cents account from their TE. More debts will be incurred by those trader wannabes to fund their accounts. Their families will be affected somehow or somewhat.
My sincere advice to all traders is to trade with money you can afford to lose or practice with demo first until you learn and acquire the necessary proficiency to trade in this difficult business of forex.

Cheers.. happy to trade and trade to be happy.
GS
  • #383
  • Mar 28, 2018 12:04am Mar 28, 2018 12:04am
Quoting alphaomega
A few ideas on the topic from me. The facts: 1. The new regulations apply only to retail traders. 2. By default the retail traders are categorized as non-professional investors! The potential solution: From a legal standpoint we still have a loophole in the system. You can ask your broker to categorize you as professional client. The benefit from this is that you will not be affected by the new restrictions. The downside is that you will lose all kinds of protections. There is no protections for the professional investors. So you are on your own...

My spreadbetting firm offered this solution from some point during the ESMA consultation period. You sign away some protections in order to continue trading as currently. I'm weighing it up.
  • #384
  • Mar 28, 2018 1:47am Mar 28, 2018 1:47am
Well , after 3 months of useless " Call for Evidence " the ESMA' bureaucrats have won.

The Euro-bureaucrats of ESMA are a shameful and disgusting fact.

They take very high salaries to do nothing, while the young Europeans guys are unemployed. Euro-bureaucrats are not elected by anyone and have no responsibility if they are wrong.

They were put in their place only for political recommendations, without having any merit or professionalism.

Euro-bureaucrats are dirty parasites that impose sacrifices on European citizens, while they have incredible privileges.

They are dinosaurs that steal their fabulous salary, approving hallucinanting and useless laws such as those on the diameter of peas, the curvature of cucumbers and the length of the bananas : and the poor European peoples must obey !

And here is their latest invention: a law that will ruin retail Forex. Obviously they received precise orders from the Strong Powers, from Big Players and from the Great Old Men who command in Europe and in the World. This is not conspiracy , this is the reality.
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Anyway , there is always an escape route.
Parasites Euro-bureaucrats and Esma are preparing a uge gift to offshore brokers and non-European brokers , as :

IC Markets ( Australia )
Pepperstone ( Australia )
DirecFX (Australia )
Admiral Markets ( Russia )
IG Markets ( Singapore )
FxOpen (Nevis)
Dukascopy Japan ( Japan )
Lmax HC ( Hong Kong )
etc.
  • #385
  • Mar 28, 2018 1:57am Mar 28, 2018 1:57am
Quoting redoktober
{image} Anyway , there is always an escape route. Parasites Euro-bureaucrats and Esma are preparing a uge gift to offshore brokers and non-European brokers , as : IC Markets ( Australia ) Pepperstone ( Australia ) DirecFX (Australia ) Admiral Markets ( Russia ) IG Markets ( Singapore ) FxOpen (Nevis) Dukascopy Japan ( Japan ) Lmax HC ( Hong Kong ) etc.
Beautifully summarized!

However some of your mentioned alternatives are ALREADY not accepting EU clients anymore - Pepperstone is one example.
  • #386
  • Mar 28, 2018 2:28am Mar 28, 2018 2:28am
Quoting Spreadbetter
Yep, there’ll be a requirement for a certain level of deposit in order for you to be classed as a professional, perhaps 50k. {quote}
I think it also depends on the country. In Germany there is a law that defines a professional trader/investor (§67 WpHg Abs. 6)
Two of the three given criteria have to be fulfilled:

- Trader has a net worth of at least 500.000 EUR
- Trader has worked in the banking sector for at least a year
- Trader has done at least 10 "business deals" in the last year in one quarter.
  • #387
  • Mar 28, 2018 3:53am Mar 28, 2018 3:53am
Warning.
Reading carefully the ESMA measures of 27 March 2018 , it seems that the leverege reduction is only on CFD , so the traditional Forex trading would seem to be excluded .

https://www.esma.europa.eu/press-new...tail-investors

FF members , what do you think about it ?
  • #388
  • Edited 4:12am Mar 28, 2018 3:58am | Edited 4:12am
Quoting redoktober
Warning. Reading carefully the ESMA measures of 27 March 2018 , it seems that the leverege reduction is only on CFD , so the traditional Forex trading would seem to be excluded . https://www.esma.europa.eu/press-new...tail-investors FF members , what do you think about it ?
This is the loophole everyone is hoping for!

How to check: the contract specifications in each trading software are displaying the underlying calculation mode. For MT4/5 simply right click on the desired product in the market window to have a look -> "Profit calculation mode – accepted profit calculation technique (Forex, CFD, Futures)"
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  • #389
  • Mar 28, 2018 4:05am Mar 28, 2018 4:05am
Some magnificent swearing on this thread, KK100 you have a spectacularly unique turn of phrase

To Alpha's point though...

Quoting alphaomega
A few ideas on the topic from me. The facts: 1. The new regulations apply only to retail traders. 2. By default the retail traders are categorized as non-professional investors! The potential solution: From a legal standpoint we still have a loophole in the system. You can ask your broker to categorize you as professional client. The benefit from this is that you will not be affected by the new restrictions. The downside is that you will lose all kinds of protections. There is no protections for the professional investors. So you are on your own...
This is exactly right as is Drolph's prediction of how it'll play out; the regs will be gamed for a year or two which will lead to tighter regulation. Having a large capital base is a possibility, but a pretty shabby metric of professionalism - wealth is not a strong predictor of market knowledge, professionalism or even success.

ESMA consider FX an investment vehicle and are treating it as such. But obviously it's not - it's a trading vehicle. Stocks and shares have an in-built upside to them tied to economic growth; FX has no such thing so requires actual trading, moving in and out of position. Sit and hold is not an FX strategy. It requires skill, knowledge, time and patience, and while you're developing all those things you're likely to lose money as reflected in the returns. That's part of the deal.

The bigger problem is this. Now ESMA have created a role for themselves, not only will they naturally wish to extend their reach, the door is now wide open for corporate lobbying and influence. And it'll come...
  • #390
  • Mar 28, 2018 4:37am Mar 28, 2018 4:37am
Darwinex has released some interesting informations on their blog: https://blog.darwinex.com/esma-product-intervention/

Unfortunately they said that restrictions would be valid for forex as well:

"On the other hand, Forex are still CFDs, so the restrictions will apply."
  • #391
  • Mar 28, 2018 4:43am Mar 28, 2018 4:43am
Nope, admittedly it reads as if it’s ambiguous but I can assure you it includes spot FX for retail punters.

Quoting redoktober
Warning. Reading carefully the ESMA measures of 27 March 2018 , it seems that the leverege reduction is only on CFD , so the traditional Forex trading would seem to be excluded . https://www.esma.europa.eu/press-new...tail-investors FF members , what do you think about it ?
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #392
  • Mar 28, 2018 4:45am Mar 28, 2018 4:45am
Shhh, my mate Twee hid our exchange, you’re not supposed to read the comments.

Quoting triphop
Some magnificent swearing on this thread, KK100 you have a spectacularly unique turn of phrase To Alpha's point though... {quote} This is exactly right as is Drolph's prediction of how it'll play out; the regs will be gamed for a year or two which will lead to tighter regulation. Having a large capital base is a possibility, but a pretty shabby metric of professionalism - wealth is not a strong predictor of market knowledge, professionalism or even success. ESMA consider FX an investment vehicle and are treating it as such. But obviously it's...
"The meek shall inherit the earth.." Yeah right, good luck with that shit..
  • #393
  • Mar 28, 2018 6:01am Mar 28, 2018 6:01am
30:1 lol. Maybe they just want to destroy the industry.

More bang for your buck trading currency futures CME/Globex. That is what I'd do.
  • #394
  • Mar 28, 2018 7:55am Mar 28, 2018 7:55am
this is from my dome so it's a big deal

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and this is a even bigger deal its real money

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you do not need to use a lot of leverage to make money have a look at Not-KPMG TE you can make money with small lot size with deals that are held for days not hours it's not exciting but it can work and with longer deal i find it easier to plan the deals as it's less of a hurry my first TP is always 1% of my account and my SL is always no more than 1% of my account and i do this with a low leverage

Spreadbetter am i showing the traits of a gambling addict genuine question i enjoy your input
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  • #395
  • Mar 28, 2018 8:12am Mar 28, 2018 8:12am
This is not the topic - you CAN make money consistently using higher leverage as well!

Just an example of one of my live accounts, which is by the way far more worth than a low leveraged one, two or three month trade explorer you will find mostly around here in respect of durability.

Beeing profitable on a regular basis is not a question of leverage!
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  • #396
  • Mar 28, 2018 8:19am Mar 28, 2018 8:19am
Quoting Drolph
This is not the topic - you CAN make money consistently using higher leverage as well! Just an example of one of my live accounts, which is by the way far more worth than a low leveraged one, two or three month trade explorer you will find mostly around here in respect of durability. Beeing profitable on a regular basis is not a question of leverage! {image}
I agree. In the end its up to you how big you want to open your position. Just a question of risk management and not the leverage..
  • #397
  • Mar 28, 2018 8:37am Mar 28, 2018 8:37am
By Grandaevus , an interesting analysis from another thread :
https://www.forexfactory.com/showthr...1#post10916341

" New leverage restrictions will only be applied to CFDs , not spot FX."
  • #398
  • Mar 28, 2018 9:13am Mar 28, 2018 9:13am
Red, sorry to say that's nonsense. It will apply to ALL speculative retail products in Europe. The ESMA in their infinite wisdom consider spot FX a type of CFD (don't blame me - they are regulators after all).

I just called LMAX to see how the hell they were going to get away with it. Turns out they won't. They agreed that it WILL apply but are waiting for an official line to tell customers.

https://www.esma.europa.eu/press-new...protect-retail

"The European Securities and Markets Authority (ESMA) is issuing this statement to provide an update on its work in relation to the provision of contracts for differences (CFDs), including rolling spot forex, and binary options to retail clients. "

The only exception is if the FCA, UK's authority, decide to exclude themselves from ESMA rulings in a year's time post Brexit but so far the FCA have said they broadly agree with the recommendations. And on that front, I bet in a years time that Milliband (yes Milliband) will have forced a call for another referendum. So even Brexit isn't a certainty.

Done deal.
  • #399
  • Mar 28, 2018 9:19am Mar 28, 2018 9:19am
Quoting triphop
Red, sorry to say that's nonsense. It will apply to ALL speculative retail products in Europe. The ESMA in their infinite wisdom consider spot FX a type of CFD (don't blame me - they are regulators after all). I just called LMAX to see how the hell they were going to get away with it. Turns out they won't. They agreed that it WILL apply but are waiting for an official line to tell customers. https://www.esma.europa.eu/press-new...protect-retail "The European Securities and...
Well , probably I was wrong. Anyway , it's a fact of interpretation of words ,the euro-bureaucrats are masters in this... We'll see.
  • #400
  • Mar 28, 2018 10:12am Mar 28, 2018 10:12am
Quoting redoktober
Anyway , there is always an escape route. Parasites Euro-bureaucrats and Esma are preparing a uge gift to offshore brokers and non-European brokers , as : IC Markets ( Australia ) Pepperstone ( Australia ) DirecFX (Australia ) Admiral Markets ( Russia ) IG Markets ( Singapore ) FxOpen (Nevis) Dukascopy Japan ( Japan ) Lmax HC ( Hong Kong ) etc.
there is always a possibility that they are going to introduce another rule to force the limitation to EU citizen!
so yeah move your account overseas if you have to, while you still can...
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