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EU is lowering leverage. What now?

  • #41
  • Aug 25, 2018 4:00am Aug 25, 2018 4:00am
Quoting wahdatw
According to ESMA, the lowering of the leverage is for three months only starting from August. And they will be reviewing the changes and if it actually "is protecting the retail clients". I so badly wish that the leverage goes back to normal for EU traders/brokers.
Me too! Unfortunately that doesn't look likely. They have just extended the ban on binary options (even before their 3 months was up) so it doesn't look good for CFDs...
  • #42
  • Aug 25, 2018 4:08am Aug 25, 2018 4:08am
Quoting symona
What most people don’t understand is if they get ripped off / scammed or even if a legitimate broker goes belly up / bankrupt or shut down by their regulator, one needs to go to the jurisdiction (fly to Australia for example) in order claim your damages if you manage to collect. Unless you have deposited more than $20,000 it is not worth the expense, resources and time. Unless you hire a lawyer to act on your behalf, which will cost you the same amount-if not more...
Agree but yet another reason why a lot of retail traders are so reluctant to stump up the extra margin, for all their funds just to sit in their broker's account.

e.g. I want to place a trade on EURUSD at £10/pip, with a 20 pip stop loss. My total risk is £200.
Increased margin requirements now mean that I need to have over £4000 in my account to cover this trade. My total risk is £200 and ESMA require me to risk over £4000! And yes it is a risk, as you said the broker might go bankrupt.

Now, I would much rather risk having £600 deposited with my broker and the rest somewhere else, than it all in one place!
  • #43
  • Edited 12:43pm Aug 26, 2018 12:25pm | Edited 12:43pm
In the next 10 years or so forex is going to be a very rare service to the general public.so you better start saving those little profits you make-to be able to afford membership in the future..its going to be as it used to be in the past-its going to to be a thing for the wealthy/those who can afford it/afford the buy in).
Most countries are pissed off at forex brokers(being unable to TRULY REGULATE THEM-and pissed of at THE MARKETS for NOT BE ABLE TO KEEP UP WITH WHATS DONE THERE/OR UNDERSTANDING COMPLETELY what actually goes on in this markets.
The only country doing everything they can hardcore to understand what actually goes on in the markets,in general,including all of wall street is the U.S,they have very strict laws towards this so called brokers-and you either obey their laws or you pack your shizz and leave their citizens alone with your broker servicing-that's why there arnt as many forex brokers accepting US clients as there are in the rest of all the world countries.
so if i was a us citizen i would be very proud right now (proud to have a government with my best interests/my financial interests/their financial system interests at heart like this)...now it seems Europe is following in behind-with this leverage isssue.

#Believe me gorvenments are pissed at how easily pple loose money in this forex brokerage thing(loose money in so many tactics/ways including LEVERAGE)-and pissed at how uneasy it is to regulate it-let alone completely understand it.
so the so called REGULATED brokers in most countries excluding the U.S is still just a myth-the particular countries financial boards/systems only claim to endorse this so they get taxes out of this sort of companies.Pple still get ripped off under brokers that are regulated.

Hey i maybe wrong here-but this above here is just my 2 cents.
  • #44
  • Aug 27, 2018 3:47am Aug 27, 2018 3:47am
Quoting EXpRINCE
#Believe me gorvenments are pissed at how easily pple loose money in this forex brokerage thing(loose money in so many tactics/ways including LEVERAGE)-and pissed at how uneasy it is to regulate it-let alone completely understand it.
Maybe... but since when has any government cared about people losing money? Casinos? Sports betting? It's all additional tax revenue to them!

Pissed at how some people make money through forex more like! Small retail traders seeking financial freedom outside the "system" - how dare they!

I don't believe these regs were brought in for the good of retail traders like me, but even if they were, this quote says it all:

“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies.” - C.S. Lewis
  • #45
  • Aug 27, 2018 7:30pm Aug 27, 2018 7:30pm
Quoting symona
Dear reddevil, I am not familiar with New Zealand passport procedures (I assume that’s where you are from) but I certainly hope it’s not that easy to obtain a government passport. I do not know of any country that MAILS their passports to its citizens. In any event, because I happen to be an International lawyer, I am well aquatinted with the legal system and its antiquated court procedures. Like I mentioned, either you would have to appear in person or send a lawyer to represent you to claim damages and/ or compensation for breach of contract /...
Those traders that lost money when Alpari went bust in the UK? Did everyone has to go to London to file the claim? Alpari has thousands of clients. Most got their money back from the compensation fund.

Btw Just renewed by NZ passport while in Australia. Submitted online on Wed and received passport by courier on Friday. This is a non urgent application!. I worked in the financial industry and have to deal with ombudsman and other regulator in both Aus/NZ. Like I said, attendance in person is not required unless there is communication (language) issue and requires an interpreter and this will be arranged by the ombudsman. Otherwise, for efficiency reasons, all contact is done online.

There was a case of insider trading. Person X has a friend who works at a supplier, who supplied services to public listed company Y. Somehow person X receive insider information and made money in some shares (about $20K). Person X is now serving 3 years in prison (Insider trading penalty is 10 years). There were no whistle blower, just pure electronic detection even when that person X is not "connected" to company Y directly. Conviction is usually 100% successful.

So australia does not have compensation rules like the UK and rely on eletronic surveilance for fraud etc since there is no fallback for traders/investors. I am comfortable with my money sitting with an Australian broker.
  • #46
  • Aug 27, 2018 8:47pm Aug 27, 2018 8:47pm
How do you know that all victims received full compensation from Alpari in UK?
Also what the process entailed?
Where you involved in any way or part of that resolution?
Of course not.
You simply speculate with irrelevant arguments.
By the way, I never claimed that Australian brokers are not legit or trustworthy. I have partnered with 2 brokers in the past and was very satisfied with their service.
My point was that if shit hits the fan, with any broker, don’t expect your money to be returned with an email. There is due process and allocation of resources, that is not only time consuming, but also very expensive.
  • #47
  • Aug 28, 2018 3:31pm Aug 28, 2018 3:31pm
Quoting symona
How do you know that all victims received full compensation from Alpari in UK? Also what the process entailed? Where you involved in any way or part of that resolution? Of course not. You simply speculate with irrelevant arguments. By the way, I never claimed that Australian brokers are not legit or trustworthy. I have partnered with 2 brokers in the past and was very satisfied with their service. My point was that if shit hits the fan, with any broker, don’t expect your money to be returned with an email. There is due process and allocation of...
Yep, good reason not to have any more than the minimum with any broker. Just because one is risking say 1% of total capital on any one trade, doesn't mean the whole 100% has to be sitting with the broker...
  • #48
  • Sep 7, 2018 7:03pm Sep 7, 2018 7:03pm
Quote
Maybe the regulator and industry has under estimated how much independent traders liked higher leverage. Evident by how many traders are now looking into using offshore brokers in Australia New Zealand and other places who still offer higher leverage.
Less than 100:1 is very low.

TRUTH.

They messed up, leverage is not how brokers scam traders.

Widening spreads too abnormally, triggering buy/sell orders before price is reached
Or triggering Stop losses too early or way late from current price is how they scam us!

Thats what ESMA should have looked into and stopped such malicious practices.

Now a lot of traders are gonna leave these Eu brokers and be even more vulnerable and scammed using offshore brokers. A number of EU brokers are likely gonna lose clients and close down. Good job ESMA
  • #49
  • Sep 7, 2018 7:22pm Sep 7, 2018 7:22pm
now were fucked lol...I put 25k CAD into FXCM with new leverage rules and can open 2 lots on crosses and 3 lots on mains...its a fucking joke. Cant make money any more.
  • #50
  • Sep 7, 2018 7:24pm Sep 7, 2018 7:24pm
so if i was a us citizen i would be very proud right now (proud to have a government with my best interests/my financial interests/their financial system interests at heart like this)...now it seems Europe is following in behind-with this leverage isssue.[/quote]

Umm I think they are more pissed of that people can easily make money this way, who is gonna clean the roads?,nurse the sick? and flip their burgers? when everyone is trading and investing in markets. And its not easy to tax, that why IMO they want it gone.

Quote
so if i was a us citizen i would be very proud right now (proud to have a government with my best interests/my financial interests/their financial system interests at heart like this)...now it seems Europe is following in behind-with this leverage isssue.

Nah, for a country that is supposed to be the land of the free [USA], they sure have some draconian restrictive laws, on the trading/Investing industry. They treat US adult Citizen like children. This is also the same country that has lax tax lows on the ultra wealthy. I disagree they care about protecting anyone other than themselves and the keeping the status quo of only a few elites as the super rich.
  • #51
  • Sep 7, 2018 7:26pm Sep 7, 2018 7:26pm
Quote
so if i was a us citizen i would be very proud right now (proud to have a government with my best interests/my financial interests/their financial system interests at heart like this)...now it seems Europe is following in behind-with this leverage isssue.

Nah, for a country that is supposed to be the land of the free [USA], they sure have some draconian restrictive laws, on the trading/Investing industry. They treat USA adults Citizen like children, I do not envy Americans, when it comes to this issue at all.
  • #52
  • Sep 8, 2018 2:45am Sep 8, 2018 2:45am
Quoting Redbaron81
now were fucked lol...I put 25k CAD into FXCM with new leverage rules and can open 2 lots on crosses and 3 lots on mains...its a fucking joke. Cant make money any more.
Agree, I would need to raise 7x funds to continue trading as I did before. 7x!!!
I don't want to change the way I trade. It works.
So, I've moved to a non-EU broker and hope the regulations don't spread globally any time soon!
If they do... well I'll have to cross that bridge when I get to it...

As for the USA, it is the last place on earth I would want to live!
  • #53
  • Oct 2, 2018 1:25pm Oct 2, 2018 1:25pm
Has anyone seen anything about the 3-month initial period coming to an end? I guess that means the end of October? I wonder how many retail traders have held off moving offshore in case the regulations are changed again after these 3 months.

I haven't moved anywhere yet. I reduced my trading size but 2 months of trading small is starting to take its toll on my patience.

Anyone have any idea if we can expect these regulations to continue after the 3 months are up?
  • #54
  • Oct 3, 2018 8:11am Oct 3, 2018 8:11am
Quoting TeenyTrader
Has anyone seen anything about the 3-month initial period coming to an end? I guess that means the end of October? I wonder how many retail traders have held off moving offshore in case the regulations are changed again after these 3 months. I haven't moved anywhere yet. I reduced my trading size but 2 months of trading small is starting to take its toll on my patience. Anyone have any idea if we can expect these regulations to continue after the 3 months are up?
https://www.leaprate.com/financial-s...-three-months/

2019
  • #55
  • Oct 3, 2018 8:28am Oct 3, 2018 8:28am
Thanks for the link z.h
I missed that announcement for some reason.
Things have been very quiet on the ESMA-front since August, I'm guessing everyone just assumed the regulations were here to stay.
Oh well, time to decide what to do then.
  • #56
  • Oct 4, 2018 5:44am Oct 4, 2018 5:44am
I hope that ESMA won’t extent the 3-month round. Plus, there is nothing on their website yet.
  • #57
  • Oct 7, 2018 12:17pm Oct 7, 2018 12:17pm
So, it's not official yet? What about the link above?
  • #58
  • Oct 9, 2018 3:31pm Oct 9, 2018 3:31pm
Quoting UlliC
I hope that ESMA won’t extent the 3-month round. Plus, there is nothing on their website yet.

Here it is:

https://www.esma.europa.eu/press-new...r-three-months
  • #59
  • Oct 10, 2018 2:11am Oct 10, 2018 2:11am
ESMA has taken a toll on the retail traders & everybody seem to be looking for offshore/non esma options. hope this link will help

https://forums.babypips.com/t/going-...the-cftc/35612

am testing a broker from this list !.
  • #60
  • Edited 3:37am Oct 10, 2018 2:35am | Edited 3:37am
Quoting Gabrields
ESMA has taken a toll on the retail traders & everybody seem to be looking for offshore/non esma options. hope this link will help https://forums.babypips.com/t/going-...the-cftc/35612 am testing a broker from this list !.
Gabrields, i don´t trade from Europe but i could suggest you Tradeview Markets. I understand that they are an american broker that didn´t accept NFA regulations, so they do have a register at Cayman Island. It´s an unregulated broker, too. It isn´t listed at that Babypips list because they can´t accept USA traders. I am trading with them since eleven months ago. They seem good broker if you are at your learning process. Good reviews at Forex Peace Army. Initial deposit usd 100. So you can test them with a small deposit. I hope this information can help you. (i don´t work for Tradeview, i´m just your client)

At the present i´ve opened an account with an australian brokers regulated by Asic. It´s a bad experience so i´ll not recommend it but i´ve read good reviews even at this forum about australian brokers like Vantagefx, Global Prime, Rubixfx and ICMarkets. This could be a good option, too.
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