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Breaking: ESMA finalizes new rules to govern leveraged trading 347 replies

Differences in Trading Behavior under new ESMA leverage rules 2 replies

UK online broker shares hammered by ESMA leverage proposals 48 replies

Concerning New ESMA Regulation On Leveraged Trading 1 reply

New restrictions on ESMA regulated brokers 0 replies

Attachments: European Traders - new ESMA regulations!
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European Traders - new ESMA regulations!

Quoting Redbaron81
brokers like Finpro are good to mess around when you playing around with max $500...I would never put $25000 into a broker like that...they can close shop tomorrow and your money is as good as gone. Happend 1000 times now and it will happen a 1000 more
Because is it really nessesery too have 25000 ore more in a account evverybody talk abaut risk and procentage of account...That is Hole beauty with high leverage you dont need a big account too trade big...ok si you take a coupple of losses just put a little more in the account but the Hole point og trading is too make money...build up too 5000 withdrael half....
You win some you loose some do both with peace of mind
Voted for: "Yes, they have impact and I'll look for new broker"
Although I can make it almost the same given the new margin and stop-out conditions, I won't swallow that hypocrisy!
They say that restrictions are for our own protection ...fck them! I don't buy this!
We're not little children, we know what we're doing with our own money ...even some addicted pikers, where's the problem, "mommy-ESMA"?!
Member
Hi, here my opinion to the ESMA:
I think it is not the problem that the margin is higher now. I think the real deal (for the brokers and the financial Industrie who for sure forced this new law cause it's for their favour) is the new 50% close out rule. This means that the broker can close your position when your margin goes higher than 50 % of your account!! This is a big trick to take our money faster away. This has absolutly nothing to do with a security mechanism cause thats what our margin already is!!
This implicates that the retail Traders have to put more Money to their account…….and in the Long run this means more Money for the brokers!!!! Thats the only reason why the ESMA was invented!!!!
Quoting mattkirby
Hi, here my opinion to the ESMA: I think it is not the problem that the margin is higher now. I think the real deal (for the brokers and the financial Industrie who for sure forced this new law cause it's for their favour) is the new 50% close out rule. This means that the broker can close your position when your margin goes higher than 50 % of your account!! This is a big trick to take our money faster away. This has absolutly nothing to do with a security mechanism cause thats what our margin already is!! This implicates that the retail Traders...
Indeed, the 50% stop-out forced me to low my risk profile... lower risk=>lower profit

There are lotta micro-mini-accounts retail pikers (they say 20% of trading market) and they will never put more money into their accounts!

My manager said they'll wait for some feedback in 3 months ...and if most of the small retailers will be ruled out, they will posibly come back to the previous conditions because most of brokers will lose lotta clients...

Maybe they need to kill pikers to improve market conditions ..."noise" free charts?
Because the small retailers they are also less experienced traders... WhoTF knows ...but I dont like it
Member
i just closed my account with XM in UK and asked XM australia if they have to follow ESMA and the answer is no .
.Pepperstone does not take european clients because they want to follow european rules for european customers ...
ICM i asked but no answer at the moment ...
So , i hope to find a broker serious who does not apply ESMA bullshit rules ..
ICM doesn't follow ESMA.
The new ESMA regulation is not fair to retail traders. But what is difference between a retail traders and a professional traders?
this is the answer just received from ICM ,
Constantinos Moustaka (IC Markets)
Aug 2, 04:55 AEST

Thank you for contacting IC Markets.
Please note that IC Markets is currently only regulated by ASIC, in Australia and that is where your account is under now (not FCA, London).
ESMA leverage regulations will certainly apply to EU citizens trading under EU regulated Brokers, and we are still waiting for confirmation how and if they will affect EU clients trading under non EU regulated entities, such as Australia.
Currently we have made no changes, however we will be sure to keep you informed.
I remain on your disposal,
Kind Regards,

don"t know what to think about that ....
Quoting Goldorak06
this is the answer just received from ICM , Constantinos Moustaka (IC Markets) Aug 2, 04:55 AEST Thank you for contacting IC Markets. Please note that IC Markets is currently only regulated by ASIC, in Australia and that is where your account is under now (not FCA, London). ESMA leverage regulations will certainly apply to EU citizens trading under EU regulated Brokers, and we are still waiting for confirmation how and if they will affect EU clients trading under non EU regulated entities, such as Australia. Currently we have made no changes, however...
They will most likely ensure, that EU clients can stay with them without any restrictions. They are currently making the deal of their lifetime and will try to keep this as long as possible.
UK’s FCA warns brokers not to use products similar to CFDs to get around ESMA’s restrictions
I have traded today with a small account (500), castrated from 1:500 to 1:30. Just for testing purposes, how my strategies work under these conditions. It gets complicated and you need to think "small". Some strategies I use can't work at all, because you can't go below 0.01 lot. It's slow and boring. You need at least a 10k account to move something. Just pain in the ass...
Quoting Retep
I have traded today with a small account (500), castrated from 1:500 to 1:30. Just for testing purposes, how my strategies work under these conditions. It gets complicated and you need to think "small". Some strategies I use can't work at all, because you can't go below 0.01 lot. It's slow and boring. You need at least a 10k account to move something. Just pain in the ass...
ESMA is an insane policy created by people who really do not know what they are doing. The irony is that the new rules will actually wipe out new traders accounts much faster. Newbies will place 1 trade and watch it lose; they can't even hedge it unless their account size is massive - in which case they will lose more money! They will just keep placing bets (even with stop-losses) and watch them all fail one after the other. At least with higher leverage beginners have a chance of coming up with a new strategy and are able to place more trades with a lower deposit/balance to win their losses back.

This new ESMA rule should be ended immediately and who ever came up with it should be sacked from their job. Totally insane. Totally useless. It does the exact opposite of what it is intended to do.

Just give people the choice to have either high or low leverage trading account. If they choose high leverage then give them some MASSIVE DISCLAIMERS that warn them they can lose all of their money. If they still lose after that then it is their fault.

THE END.
It is not that bad, one will make less crazy % but maybe 5-10%/mo is still realistic ... indeed, it is harder to trade, much more harder, less motivating, in a long run I think the trader will improve skills and do better and better ... just need to adapt.
Quoting Maxjoy
Hi Everyone, I would like to ask all EU traders on their opinion and views on incoming Leverage and Margin restrictions by ESMA. I personally think that this new rules will have negative impact on Retail Traders and are created to protect brokers, not us...however EU brokers will lose a lot or retail clients to overseas and unregulated counterparts if solution is not found. What's your Plan B? {image}
We are going to have a look at the impact on the industry from two different perspectives. The first one is that of brokers that are acting as principals and are internalizing their flow. The so-called ‘market makers’ are likely to get more materially affected by the changes mandated by the ESMA.
The more you know cryptocurrency, the more you realize forex is much better
Quoting fxwisdom
The irony is that the new rules will actually wipe out new traders accounts much faster.
I still don't understand claims like that. How are you exactly supposed to lose more and faster with lower leverage?

Quoting fxwisdom
Newbies will place 1 trade and watch it lose; they can't even hedge it unless their account size is massive - in which case they will lose more money!
Except the difference is, before "newbies" opened 1.00 Lot positions with a 1.000€ account and 1:500 leverage and quickly lost like 50-100€ in one trade, because they overtraded and had to place tight stops. Now they can only open 0.10 Lot positions with a 1.000€ account and lose max. 5-10€. Or maybe max. 0.3 Lot and lose 15-30€. This is a whole lot safer and you can actually use stops that make sense, instead of tight 5-10 pips because you can't afford to lose much more with a small account and too big position size.

And what you call "hedging" is most likeley opening an opposite position in the same symbol when you realize you were wrong. There are a lot of different and controversial opinions about this method. But the main point is that this is certainly nothing what an unexperienced "newbie" can and should do successfully.

Quoting fxwisdom
They will just keep placing bets (even with stop-losses) and watch them all fail one after the other. At least with higher leverage beginners have a chance of coming up with a new strategy and are able to place more trades with a lower deposit/balance to win their losses back.
Sorry, but if someone "keeps placing bets and watch them all fail," they shouldn't be trading a live account anyway and go back and practice demo. No matter what leverage they use, they obviously didn't understand the basics of the market.

Quoting fxwisdom
This new ESMA rule should be ended immediately and who ever came up with it should be sacked from their job. Totally insane. Totally useless. It does the exact opposite of what it is intended to do.
Most traders have no idea of proper money management. Thats one of the foremost reasons why ESMA made those decisions in the first place. Most traders now only see the restricted leverage. But they don't see the negative balance protection for instance.

While I don't agree with the scale of the ESMA restrictions, I can see the bigger picture and the idea behind it. And those who don't agree with their regulations can always divert to reputable AU brokers or even some unregulated offshore brokers if they like.

But arguments like "Traders will now lose even more money even faster" simply don't make any sense.
Quoting aa4fx
It is not that bad, one will make less crazy % but maybe 5-10%/mo is still realistic ... indeed, it is harder to trade, much more harder, less motivating, in a long run I think the trader will improve skills and do better and better ... just need to adapt.
Intelligent human beings should adapt to the given environment, no question. But in this case we have an invented rule of some dumbasses, that makes it HARDER TO WIN and EASIER TO LOSE with forex trading. And they sell it under the opposite title. Why adapt to such a BS?
  • Post #77
  • Quote
  • Edited at 6:20pm Aug 1, 2018 6:03pm | Edited at 6:20pm
Quoting Retep
{quote} Intelligent human beings should adapt to the given environment, no question. But in this case we have an invented rule of some dumbasses, that makes it HARDER TO WIN and EASIER TO LOSE with forex trading. And they sell it under the opposite title. Why adapt to such a BS?
I've been adapted. I simply transfered my account to Cayman Islands regulated offshore out from STUPID COMMUNISM-LIKE EUROPEAN UNION. Glad I participated in reducing their (EU) liquidity
When you're not sure Short or Long - toss a coin! Chances are 50% !!!
Quoting mw108
{quote}Most traders have no idea of proper money management...
Most probably, but the ESMA rules make proper money management even more challenging. So traders can fail even more under this tight conditions.
I've noticed a serious flaw with ESMA if place a pending order, it gets filled you've got the 5% margin to cover the entire trade in the broker account, you have a broker with guaranteed stops (with zero risk to yourself) the trade fills the pending order it swings into profit. At this point you lock in your profits with a stop moved down to break-even and you let the trade run (being a swing play). At this point because you've locked in profits with a guaranteed stop you risk profile is now ZERO, but no this is not the case with ESMA rules because the trade is still running you still have to have 5% where you are unable to place another trade if you see another set up. To place another trade you need to find another 5% margin down payment and transfer to the broker. The broker's funds are accumulating rapidly with every trade you keep running. Completely nuts these are guaranteed stops for gawds sake. You can tell the EU are completely clueless on financial regulations - they need to stop playing with something they quite simply do NOT understand
Quoting ettrader
I've noticed a serious flaw with ESMA if place a pending order, it gets filled you've got the 5% margin to cover the entire trade in the broker account, you have a broker with guaranteed stops (with zero risk to yourself) the trade fills the pending order it swings into profit. At this point you lock in your profits with a stop moved down to break-even and you let the trade run (being a swing play). At this point because you've locked in profits with a guaranteed stop you risk profile is now ZERO, but no this is not the case with ESMA rules because...
This is basically my whole issue with the entire thing as well. What you are describing it's called pyramiding...and now it's dead! Because no matter how much you are in profit on your first positions, you cannot risk more than 5% overall in your account. Thanks ESMA! If this doesn't get fixed in 3 months i will be looking for another broker as well.
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