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Attachments: Breaking: Australian Parliament Passes Product Intervention
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Breaking: Australian Parliament Passes Product Intervention

  • #101
  • Oct 22, 2020 9:08pm Oct 22, 2020 9:08pm
its official folks

https://asic.gov.au/about-asic/news-...d-protections/
  • #102
  • Oct 22, 2020 9:48pm Oct 22, 2020 9:48pm
Quoting Bicarus
its official folks https://asic.gov.au/about-asic/news-...d-protections/
IG pro level 2 is 100:1, so I guess that gives up 5 months to double our accounts such that it won't make a difference.

Really sucks that they decided to go ahead with it - this will absolutely kill new traders and act as a massive disincentive for anyone who wants to get into trading in Australia.
  • #103
  • Oct 22, 2020 9:56pm Oct 22, 2020 9:56pm
Quoting Starcraftmaz
{quote} IG pro level 2 is 100:1, so I guess that gives up 5 months to double our accounts such that it won't make a difference. Really sucks that they decided to go ahead with it - this will absolutely kill new traders and act as a massive disincentive for anyone who wants to get into trading in Australia.
This pretty will stops me trading a large portfolio of EA’s now. I will just have to cherry pick the best ones and cut the rest.
The cheap money was always coming to an end.
Trading thin liquidity at the boundary of the charts
  • #104
  • Oct 22, 2020 10:05pm Oct 22, 2020 10:05pm
ASIC Commissioner Cathie Armour said, ‘Heavy losses sustained by retail clients trading in highly leveraged CFDs and ongoing market volatility during the COVID-19 pandemic highlight the need for stronger CFD protections in the product intervention order.’
‘The leverage ratio limits in the order aim to reduce the size and speed of retail clients’ losses by reducing CFD exposure and sensitivity to market volatility. This follows similar measures introduced in major overseas markets, including the United Kingdom and European Union’ Commissioner Armour said.

decreasing speed of loss lol. doesnt this mean that she acknowledges that with high or low leverage, most will still lose money? what is the point of regulating leverage then "in the name of client protection" when eventually all roads lead to rome.
  • #105
  • Oct 22, 2020 10:31pm Oct 22, 2020 10:31pm
A very interesting note with these Australian, so called, laws is that the G.G. has not given assent to any bills for many years and if he does then he places himself in an embarrassing situation. First the Australian government is listed on the New York stock exchange a business entity that goes against it very own constitution and this constitution is not the the benefit of any cooperate government.
It is also a fact that driving license laws have not yet received assent and opened to any court challenge as being a LAW.
  • #106
  • Oct 22, 2020 10:37pm Oct 22, 2020 10:37pm
Time to get your money out of those small time brokers before they go bust. The only advantage I see is they will have to stop preying in Aussie retail traders.
Trading thin liquidity at the boundary of the charts
  • #107
  • Oct 22, 2020 10:45pm Oct 22, 2020 10:45pm
Quoting RickM
{quote} This pretty will stops me trading a large portfolio of EA’s now. I will just have to cherry pick the best ones and cut the rest. The cheap money was always coming to an end.
I suggest you move to futures.
Know what you trade
  • #108
  • Oct 22, 2020 11:11pm Oct 22, 2020 11:11pm
Quoting BWilliam
{quote} I suggest you move to futures.
So what are some Aussie futures forex brokers that cater to "small fish" - ie. retail?
  • #109
  • Edited Oct 23, 2020 12:02am Oct 22, 2020 11:47pm | Edited Oct 23, 2020 12:02am
Quoting Bicarus
ASIC Commissioner Cathie Armour said, ‘Heavy losses sustained by retail clients trading in highly leveraged CFDs and ongoing market volatility during the COVID-19 pandemic highlight the need for stronger CFD protections in the product intervention order.’ ‘The leverage ratio limits in the order aim to reduce the size and speed of retail clients’ losses by reducing CFD exposure and sensitivity to market volatility. This follows similar measures introduced in major overseas markets, including the United Kingdom and European Union’ Commissioner Armour...
decreasing speed of loss lol. doesnt this mean that she acknowledges that with high or low leverage, most will still lose money? what is the point of regulating leverage then "in the name of client protection" when eventually all roads lead to rome

Spot on Bic,

And.

What happened when the leverage reduction was implemented in Japan (~2014) was that traders - simply upped their margin with extra deposit.

https://financefeeds.com/european-le...e-investigate/


Same with UK I think I read when the EU imposed (almost exactly) the same ruling percentages as ASIC is doing in 2021.


Traders will eventually UP their deposit to cover the margin to maintain their same trading lifestyle and profit expectation (which ASIC would know by what has already happened abroad). Am I happy about it - NO.


So it’s really about the jurisdiction over what businesses are allowed to do to attract customers (to spend their privately earned or acquired money).

(Maybe we will later only be allowed to purchase one bar of chocolate at a time from a shop. Lest the size and speed of which we consume said chocolate is not approved.)


I will demo the new 1:30 leverage first. To find out the “inherent traps for young players” that I also had to find out in my current leverage agreement (1:200).

March 2021 eh.
  • #110
  • Oct 23, 2020 12:33am Oct 23, 2020 12:33am
Quoting TimeTells
{quote} decreasing speed of loss lol. doesnt this mean that she acknowledges that with high or low leverage, most will still lose money? what is the point of regulating leverage then "in the name of client protection" when eventually all roads lead to rome Spot on Bic, And. What happened when the leverage reduction was implemented in Japan (~2014) was that traders - simply upped their margin with extra deposit. https://financefeeds.com/european-le...e-investigate/ Same with UK I think...
, perhaps get that chocolate bar from vanuatu, apparently it is the promised land, overflowing with milk and honey. i heard you can get 500 for the price of 1 there.

on a serious note, which broker currently offers demo at 20 or 30 leverage? all that i've looked at are offering at 1 or 50 lowest.
  • #111
  • Oct 23, 2020 12:49am Oct 23, 2020 12:49am
Well, here we go again. Another regulation doing the same stupid mistake like many others before.

https://www.financemagnates.com/fore...ear-into-esma/

Like ESMA two years ago they will simply loose a lot of tax revenue thanks to a noticable outflow of trading capital (like in europe two years agao again). And that is exactly what they deserve.

I really feel sorry for people putting regulations first on their priority list. You are trading with a broker, not a regulation - considering the fact you generally should only trade with capital you can afford to loose - a broker with a good reputation (FPA is your best friend) is ALL YOU NEED.

But I guess this is something many will have to learn the hard way sooner or later.

Wanna know what regulations do in case of fraud and scam? They are taking part in it!
When the scam from Wirecard this year went public the German regulation BaFin not only completely failed in prevention, their employees even made a lot of cash by beeing short thanks to their advantage in knowlegde.

https://personal-financial.com/2020/...recard-shares/

I am happy to keep my leverage outside of Australia in the future.
  • #112
  • Oct 23, 2020 12:49am Oct 23, 2020 12:49am
Quoting Bicarus
{quote}
, perhaps get that chocolate bar from vanuatu, apparently it is the promised land, overflowing with milk and honey. i heard you can get 500 for the price of 1 there.
on a serious note, which broker currently offers demo at 20 or 30 leverage? all that i've looked at are offering at 1 or 50 lowest.

Yes 1:50 is the lowest now.

But they all will.

It's just not on anyone's current options.

I contacted my a/c manager and told them I wanted to TRY the 1:30 because of the ASIC ruling so they opened a demo a/c for me with that particular leverage.

Just ask them.

And tell them its because of the impending ASIC ruling.

If they want your a/c after March they will provide a demo for this silly 1:30

(The shining light on the ruling is the negative balance protection. A massive volatility will occur one day now, don't know when. Too much geo-political stuff around us. The opportunity will be too great for the big hands. Broker's will need the extra deposits to cover themselves. Maybe this was the plan all along - to protect the run on the broker - as it can't be for the losing retail trader for the reason you mentioned).

[Vanuatu huh. When I was in horse racing in Oz that's where they all set up their off shores lol - will check out their chockies )
  • #113
  • Oct 23, 2020 2:20am Oct 23, 2020 2:20am
Can someone explain to me the logic behind the mantra "low leverage=client protection" that is now ASIC's turn to hide behind-- the way ESMA did previously?

If this were really the case, how come a big broker like Swissquote still offers 1:100 leverage? Does that imply they're not concerned about protecting their clients? Of course not!
Amor Fati--F. Nietzsche
  • #114
  • Oct 23, 2020 2:31am Oct 23, 2020 2:31am
Quoting doji
Can someone explain to me the logic behind the mantra "low leverage=client protection" that is now ASIC's turn to hide behind-- the way ESMA did previously? If this were really the case, how come a big broker like Swissquote still offers 1:100 leverage? Does that imply they're not concerned about protecting their clients? Of course not!
There is no protection in the end.

As far as I understand it, the Idea is that low leverage will protect the traders from losing too quickly. Most extreme case with high leverage is losing your whole account in one trade. In other words, with lower leverage you will lose slower. But, you still lose the same amount in the long run.

The biggest flaw with this regulation is that it forces the traders to deposit more money in order to keep trading the same lot size.
So it may actually have the opposite effect and long term the traders will lose even more money.
  • #115
  • Edited 2:53am Oct 23, 2020 2:39am | Edited 2:53am
Quoting doji
Can someone explain to me the logic behind the mantra "low leverage=client protection" that is now ASIC's turn to hide behind-- the way ESMA did previously? If this were really the case, how come a big broker like Swissquote still offers 1:100 leverage? Does that imply they're not concerned about protecting their clients? Of course not!
if you had a 100 leverage account, with an open position, gain or loss. your mt4 "margin level" gains or loses 1%
if you had a 200 leverage account, with an open position, gain or loss. your mt4 "margin level" gains or loses 2%
if you had a 20 leverage account, with an open position, gain or loss. your mt4 "margin level" gains or loses 0.2% - (1)

now say the new margin stop out level at say 100% - (2)

in (1) we determined that per pip movement is 0.2% margin.
in (2) you are stopped out at 100%

say you have a opened position, with a free floating margin level of 130%
in the event of a blackswan event it will take a massive move of 650 pips(130%/0.2%) to cause your account to be at zero balance. << worst case scenerio

in the event of a blackswan event now if you add in the mandatory standardized stop out say at 100% margin (130%-100%)/0.2 = 150 pips to stop out << ideal scenerio

in the event of a blackswan event now if you add in the mandatory standardized stop out say at 100% margin but because no other takers like during the snb crisis, your stop out only kicks in at say 50% margin, you basically survived a blackswan <<<< forseeable scenerio


so in some sense that is valid protection.
that said, planning for the 1% probability whilst forgoing the 99% is ludicrous

that said, with or without a blackswan, most retail still lose money lol.


follow this train of thought:
|
so there is an argument that it is to protect the brokerages from insolvency, whereby they are chased by creditors(LPs) while they have to chase clients that are in array and owe them money (negative balances)
|
which then leads to the fact that creditors get priority over custodians
|
which means the segregated client funds can be used to pay creditors (depending on how badly the few negative balance clients drag the entire pool down) before clients tt survived get paid
|
if that handful of neg balance drags down the entire pool? and the broker is in array (even the custodian pool cant cover the neg balance clients), no clients can get any money and it becomes ASIC's / AFCA's headache.
  • #116
  • Oct 23, 2020 5:08am Oct 23, 2020 5:08am
Quoting Bicarus
....decreasing speed of loss lol. doesnt this mean that she acknowledges that with high or low leverage, most will still lose money? what is the point of regulating leverage then "in the name of client protection" when eventually all roads lead to rome.
spot the difference?
can you fall of the bike? - yes
can you be hit by a bus? - yes
can you drive fast? - speed limit is 50!!! you don't need fast bike.
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Forex can only be understood backwards, but it must be traded forwards.
  • #117
  • Oct 23, 2020 7:04am Oct 23, 2020 7:04am
Quoting RickM
Time to get your money out of those small time brokers before they go bust. The only advantage I see is they will have to stop preying in Aussie retail traders.
There's always the BVI I suppose ?
https://global.markets.com/?intent_g...20Markets.com#
every Saint has a past. Every Sinner has a Future
  • #118
  • Oct 23, 2020 7:25am Oct 23, 2020 7:25am
Quoting Starcraftmaz
{quote} So what are some Aussie futures forex brokers that cater to "small fish" - ie. retail?
Aussie brokers let retail traders trade options only. They are even worse - you can easily lose money even if you get the direction right.

Plenty of brokers overseas are not so precious, and accept accounts by Aussies. Just be sure to do your research - reputable, regulated, not domiciled in Cyprus, etc.
  • #119
  • Oct 23, 2020 2:58pm Oct 23, 2020 2:58pm
Quoting TimeTells
{quote} Yes 1:50 is the lowest now. But they all will. It's just not on anyone's current options. I contacted my a/c manager and told them I wanted to TRY the 1:30 because of the ASIC ruling so they opened a demo a/c for me with that particular leverage. Just ask them. And tell them its because of the impending ASIC ruling. If they want your a/c after March they will provide a demo for this silly 1:30 (The shining light on the ruling is the negative balance protection. A massive volatility will occur one day now, don't know when. Too much geo-political...
I trialled IC Markets a 1:25 demo account last night with a $10K balance to see how large my trade size could be and was very disappointed.

All I could use was about 2 full lots and that was it. Since I normally put through in excess of 250 full lots a week, certainly I will need to trade an account of at least $100k if I kept my account based in Aussie.
Trading thin liquidity at the boundary of the charts
  • #120
  • Oct 24, 2020 12:37am Oct 24, 2020 12:37am
Quoting RickM
{quote} I trialled IC Markets a 1:25 demo account last night with a $10K balance to see how large my trade size could be and was very disappointed. All I could use was about 2 full lots and that was it. Since I normally put through in excess of 250 full lots a week, certainly I will need to trade an account of at least $100k if I kept my account based in Aussie.
Well, you could have that much easier by using simple math, but ok. 1 Lot equals 100.000 units of the base currency - in case of GPBUSD it would be GBP for example.

But your practical example demonstrates the problem pretty good.

So here is the question:

Which way do you take more risks to trade your desired lotsize considering the whole amount of money you have to deposit at a given broker. 100k with an australian entity or 10k with the Seychellen one? In both ways the broker could theoretically run away with your money or go bust. In both cases a regulation is more or less useless. In Australia you soon could lose ten times more money having your example compared to an offshore broker/entity. A broker is NOT a place to store unecessary large amounts of money! IT IS RISK CAPITAL!!!

Does this makes sense to you?

Just show these regulations what they deserve. Move your money out of these patronizing areas and keep your risk even lower having the leverage you are used to!
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