Could 10:1 be the new leverage in US Forex? | Forex Factory

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Could 10:1 be the new leverage in US Forex?

  • #1
  • First Post: Jan 13, 2010 9:43pm Jan 13, 2010 9:43pm
Seems the CFTC looking at this option seriously

http://www.cftc.gov/newsroom/general...pr5772-10.html
  • #2
  • Jan 13, 2010 9:45pm Jan 13, 2010 9:45pm
yep. the end of the retail forex trader is coming. at least the ones who don't have a significant start up capital.
  • #3
  • Jan 13, 2010 10:07pm Jan 13, 2010 10:07pm
Well I guess we definitely need to fight this one they already got it down to 100:1.
  • #4
  • Jan 13, 2010 10:11pm Jan 13, 2010 10:11pm
We have 60 days. Not only does this stamp out the beginning investor and once again feed into you have to "have alot of money to make alot of money routine" but also since they are "worried" about the ignorant consumer losing all of their money, traders with larger capital required to trade stand to lose more. Instead of opening a $1,000 account and exploding it for only a grand loss. You may have to open a $10,000 which is alot harder to get access to or be willing to risk in learning the concepts of trading. And if you lose that $10,000 its a much bigger deal than the $1,000 loss.
  • #5
  • Jan 13, 2010 10:11pm Jan 13, 2010 10:11pm
Sticking to the little man, all in the name of consumer protectionism. I hate to say it, but this country is going down the tubes fast.

Get the government off of my back and out of my pocket! I don't need no more stinkin' government protectionism bull crap.

Without the retail trader, there will be a few bucket shops out of business too.
  • #6
  • Jan 13, 2010 10:36pm Jan 13, 2010 10:36pm
Moonshine, coalmine, or move it on down the line.

Offshore, that is - swimmin pools, movie stars....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #7
  • Jan 13, 2010 10:41pm Jan 13, 2010 10:41pm
Quoting The Fool
Moonshine, coalmine, or move it on down the line.

Offshore, that is - swimmin pools, movie stars....
already there. LOL! Hopefully they will be much slower in changing their rules.
  • #8
  • Jan 13, 2010 10:45pm Jan 13, 2010 10:45pm
they say its open for comment. Start a facebook lol group and get comments.
  • #9
  • Jan 13, 2010 10:45pm Jan 13, 2010 10:45pm
Quoting magnumfreak
already there. LOL! Hopefully they will be much slower in changing their rules.
Futures. Safer anyway. Maybe those micro fx contracts would pick up some volume if the domestic retail fx industry goes tits up. Hmmm....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #10
  • Jan 13, 2010 11:03pm Jan 13, 2010 11:03pm
This is very disturbing news.

I hope it gets shot down.
  • #11
  • Jan 13, 2010 11:09pm Jan 13, 2010 11:09pm
Is this entirely bad? All this means is that instead of a $1,000 deposit for a standard contract, you will need $10,000. According to John Carter in his book, Mastering the Trade, you should trade 8 contracts per $100,000 or 1 contract per $12,500. This means you do need extra cash to trade, but it also limits risk. Based on the above formula, you probably need about $20-25,000 for a start-up account.

Another way to look at it is, if you trade 1 contract with your $12,500, you need $9,000 extra for a contract’s deposit. So $21,500 is now the new minimum required. That means $100,000 allows you to trade 4.65 or 5 contracts.

I think this may be a good thing since it would impose a limit to how far you can stretch your resources. A lot of traders here seem to trade one currency that is highly correlated to another which is correlated yet to another that they trade and so on. This, to me, is just multiplying your risk. With less leverage available, they’ll think more about which instrument they wish to trade.
  • #12
  • Jan 13, 2010 11:17pm Jan 13, 2010 11:17pm
Another example of how this government has only one thought. and that is that people are too stupid to make their own choices, so the government who knows better will make it for them

I get so amazed at how people want a government to control them and take care of them

get ready as this is the start... my account is in London and away from this government
  • #13
  • Jan 13, 2010 11:27pm Jan 13, 2010 11:27pm
The US is not going to allow something that WILL BE financial ruin for MOST of the people opening accounts. On the one hand there are those that do not wants government in their business, on the other hand there are people blaming them for their financial crisis's. IN may cases their are nut cases doing both.

Given the climate, there is no way this is not going to pass. If its raining, open an umbrella, yelling at the sky won't stop the rain.

10to1 should be adequate for most people trading. If it is not, the simple thing to do is open an account in another country.

Take care,
BR
  • #14
  • Jan 13, 2010 11:27pm Jan 13, 2010 11:27pm
Move your account overseas.
  • #15
  • Jan 13, 2010 11:35pm Jan 13, 2010 11:35pm
If you are worried about not having enough money to trade then there is always options trading which includes forex options. But come on if people want to spend their money trading forex let them! What's the big deal.
  • #16
  • Jan 13, 2010 11:39pm Jan 13, 2010 11:39pm
Quoting Macdon
Is this entirely bad? All this means is that instead of a $1,000 deposit for a standard contract, you will need $10,000. According to John Carter in his book, Mastering the Trade, you should trade 8 contracts per $100,000 or 1 contract per $12,500. This means you do need extra cash to trade, but it also limits risk. Based on the above formula, you probably need about $20-25,000 for a start-up account.

Another way to look at it is, if you trade 1 contract with your $12,500, you need $9,000 extra for a contract’s deposit. So $21,500 is now the new...
I stand by my statement. If they open up a 20k account they lose 20k instead of just a grand. It increases risk
  • #17
  • Jan 13, 2010 11:41pm Jan 13, 2010 11:41pm
Quoting ferndog
If you are worried about not having enough money to trade then there is always options trading which includes forex options. But come on if people want to spend their money trading forex let them! What's the big deal.

I hear alot about options but CME is just another "bucket shop" from my experience talking to their "customer service".
  • #18
  • Jan 13, 2010 11:46pm Jan 13, 2010 11:46pm
I just spent an hour writing a detailed and impassioned response and voicing my oppositions to any proposals involving the restriction of leverage.

I strongly encourage anyone who feels the same as I to do so also. You can fax it, mail it...at least send them an email.

The address is [email protected]. Put "Regulation of Retail Forex" in the subject line.

According to what I read they will post comments on the CFTC's site. The secretary at the CFTC is David Stawick, so that's the man you need to talk with.

I'm not going to tolerate restrictions to leverage. If they want to protect consumers they need to send out detailed explanations of leverage, like they do for options, and force brokers to close positions when the account equity gets dangerously low.
  • #19
  • Jan 13, 2010 11:52pm Jan 13, 2010 11:52pm
For me, this isn't about how much is needed to open up an account, it's about the "GUVMINT" trying to protect the consumer when the consumer understands the risk.

I'm sick of the "GUVMINT" trying to turn this country into a nursery.

Show me one person that doesn't understand the risk associated with trading or investing! And if you do, that same person is "STOOPID".
  • #20
  • Jan 13, 2010 11:59pm Jan 13, 2010 11:59pm
Quoting GulfCoastPip
For me, this isn't about how much is needed to open up an account, it's about the "GUVMINT" trying to protect the consumer when the consumer understands the risk.

I'm sick of the "GUVMINT" trying to turn this country into a nursery.

Show me one person that doesn't understand the risk associated with trading or investing! And if you do, that same person is "STOOPID".
Damn right!
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