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

  • #141
  • Jan 21, 2010 3:55pm Jan 21, 2010 3:55pm
I have respect for our president, but I do not agree with his policies in the slightest. I feel that leverage on the forex market is necessary, however I feel that newbies often die to it. I think that if the forex market required some sort of certification which could be achieved through a single test online, which would act as a waiver, would be appropriate. I definitely think a new guy opening a $5,000 account with 500:1 leverage is in for a busted account very quickly.

Just my two cents. Let's lever that and make it my $10.
  • #142
  • Jan 21, 2010 4:14pm Jan 21, 2010 4:14pm
Quoting Moody
I have respect for our president, but I do not agree with his policies in the slightest. I feel that leverage on the forex market is necessary, however I feel that newbies often die to it. I think that if the forex market required some sort of certification which could be achieved through a single test online, which would act as a waiver, would be appropriate. I definitely think a new guy opening a $5,000 account with 500:1 leverage is in for a busted account very quickly.

Just my two cents. Let's lever that and make it my $10.
Do you read any of the replies to you, because you keep repeating this same nonsense in every thread on this topic? Either you prefer your comments to go unchallenged or you are not checking for replies. Which is it?
  • #143
  • Jan 21, 2010 5:31pm Jan 21, 2010 5:31pm
I feel that all the other markets ie stocks future options are against forex so they are influencing cftc to create new rules to limit the growing popularity of forex. CFTC already reduce leverage, no Hedging, order limit etc but that could not divert the fx trader to other market, worried other market and thus they took this drastic measure to kill retail forex market.


So it is only dirty political game, lets oppose it ............................
  • #144
  • Jan 21, 2010 5:37pm Jan 21, 2010 5:37pm
Quoting AstonDan
Why is that any of your business?
You seem to think you can trade forex without leverage . Just wondering if that's been a winning strategy for you. Point is 10:1 leverage will make it impossible to trade forex even if you are Warren Buffet.
  • #145
  • Jan 21, 2010 5:42pm Jan 21, 2010 5:42pm
Quoting sedakensearc
I feel that all the other markets ie stocks future options are against forex so they are influencing cftc to create new rules to limit the growing popularity of forex. CFTC already reduce leverage, no Hedging, order limit etc but that could not divert the fx trader to other market, worried other market and thus they took this drastic measure to kill retail forex market.


So it is only dirty political game, lets oppose it ............................

its not that its something else... think about ability to control markets with reductions to leverage
  • #146
  • Edited 9:22pm Jan 21, 2010 7:04pm | Edited 9:22pm
The politicians think stock trading is great and forex is terrible. They are the same.

Two average moves: A $25 stock moves 25 cents, or 1%, and a $2.50 forex pair moves 25 pips, or 1/10%. 1:1 leverage in the stock and 10:1 leverage in the forex pair both make 1%.
Since these two trading instruments are the same and US citizens invest far more heavily in stocks than forex, all leverage should be removed from stocks before forex goes to 10:1.

Or, the obvious should reconsider any leverage change: Anyone can open a 4:1 leverage account for stocks (what Harmon Trading and others offer) and prop traders can get 10:1 or better in them. Thus, anyone should be able to open a 40:1 leverage account for forex (close to what Oanda offers) and some equivalent of prop traders should be able to get 100:1 or better.

So, perhaps forex brokers can negotiate with the politicians, through offering barriers of entry similar to what availability to leverage stock traders have. Then the 10:1 leverage change may be stopped.

correction: Oh yeah, they're negative about prop traders, too. Not much of an idea, I guess.
  • #147
  • Jan 21, 2010 10:08pm Jan 21, 2010 10:08pm
Now I can trade 10,000EUR by a 1,500USD account.
If the new regulation implemented, then I have to trade it by a 3,000USD account, or only trade 5,000EUR each time.
That's the difference to me.

That means I have to spend two more month to double my account before it turn real.
  • #148
  • Jan 21, 2010 10:45pm Jan 21, 2010 10:45pm
Quoting Toothman
You seem to think you can trade forex without leverage . Just wondering if that's been a winning strategy for you. Point is 10:1 leverage will make it impossible to trade forex even if you are Warren Buffet.
Nah..Warren Buffet does not use leverage.

“Leverage,” he said, “is the only way a smart guy can go broke … You do smart things, you eventually get very rich. If you do smart things and use leverage and you do one wrong thing along the way, it could wipe you out, because anything times zero is zero. But it’s reinforcing when the people around you are doing it successfully, you’re doing it successfully, and it’s a lot like Cinderella at the ball. The guys look better all the time, the music sounds better, it’s more and more fun, you think, ‘Why the hell should I leave at a quarter to 12? I’ll leave at two minutes to 12.’ But the trouble is, there are no clocks on the wall. And everybody thinks they’re going to leave at two minutes to 12.”
  • #149
  • Jan 21, 2010 10:45pm Jan 21, 2010 10:45pm
If anybody hasn't sent their email yet, here are some things you can bring up:


Similar leverage exists in the Futures markets

Everyone will open accounts overseas, with potentially unregulated brokers, also causing many job losses

New traders can have a cap on their leverage, and it can gradually be increased to 100:1 with time.

Brokers can be forced to thoroughly educate new clients on the effects of leverage, and the clients can be forced to pass a knowledge test to ensure they understand leverage thoroughly.

It is completely against the ideals of capitalism and the free economy

Traders will need to deposit more money into their trading accounts to compensate for the leverage lost, which could greatly increase a new trader's losses in the end.
  • #150
  • Jan 21, 2010 11:01pm Jan 21, 2010 11:01pm
Quoting 24HourTrader
If anybody hasn't sent their email yet, here are some things you can bring up:


Similar leverage exists in the Futures markets

Everyone will open accounts overseas, with potentially unregulated brokers, also causing many job losses

New traders can have a cap on their leverage, and it can gradually be increased to 100:1 with time.

Brokers can be forced to thoroughly educate new clients on the effects of leverage, and the clients can be forced to pass a knowledge test to ensure they understand leverage thoroughly.

It is completely against...

Yes, that is exactly what I want say. I'm now going to send the mail.
  • #151
  • Jan 22, 2010 4:40am Jan 22, 2010 4:40am
Quoting 24HourTrader
If anybody hasn't sent their email yet, here are some things you can bring up:

Similar leverage exists in the Futures markets

Everyone will open accounts overseas, with potentially unregulated brokers, also causing many job losses

New traders can have a cap on their leverage, and it can gradually be increased to 100:1 with time.

Brokers can be forced to thoroughly educate new clients on the effects of leverage, and the clients can be forced to pass a knowledge test to ensure they understand leverage thoroughly.

It is completely against...
This is what they want. They want something and that is usually money. Who benefits? Answer that question and you know how to respond to them. However, that question is harder to answer than you think.
  • #152
  • Jan 22, 2010 5:50am Jan 22, 2010 5:50am
To be perfectly BLUNT........EVERY member of this site NEEDS to send a letter or email expressing their displeasure with these proposed changes.

The failure to do so could have the net effect of making YOU part of the silent majority; which if there is one, may be what allows this crazy overreaction to occur.

We all need make time over this weekend to put something in writing, no matter how short or to the point, expressing your displeasure.

As the old saying goes; "Those who do not vote lose the right to complain about the results."

Don't let this regulation pass and thus make your access to these markets all the more difficult.

For those with literary deficiencies, use 24Hr's ideas above and put together a small letter......should not take more than 5 minutes.....5 minutes to try and prevent something which could make most of our trading much more difficult and much less lucrative.

(Dismounts soapbox....)
  • #153
  • Jan 22, 2010 6:32am Jan 22, 2010 6:32am
When it votes for its approval or rejection?
  • #154
  • Jan 22, 2010 7:55am Jan 22, 2010 7:55am
It says so much when the average trader perfecting a hobbistic career of losing money squeals at the chance for redemption. And even more so the chronic hyper scalpers that will have to put up more than pocket change for continued efforts to play "beat the broker".

For those of you that have been trading for the past 10 years in the spot fx casino arena it should be no surprise that this cash cow creature would not withstand the test of time, at least for the retail peddler as such.

Don't waste your time with lengthy bitch and whine proposal letters to government entities, or condor up petition rallies for such. This is not some Martin Luther King thing that bears the redemption of "we shall overcome"

Government has waited patiently for the right time to begin the wash out of these exchangeless rippers. Most of you are clueless as to what is happening and display the simple barbaric defense initiatives.

The world or rather the U.S. has become excessively over dramatic reaction junkies to anything that casts a bit of sting to even the slightest herd.

You can not stop this process, your efforts though credible by intent and effort are nothing more than emotional noise for the herd to feed upon.

ADAPT, Re-Align, Move On!
"Look Left Think Right"
  • #155
  • Jan 22, 2010 9:07am Jan 22, 2010 9:07am
Quoting CurrencyAnalyst
It says so much when the average trader perfecting a hobbistic career of losing money squeals at the chance for redemption. And even more so the chronic hyper scalpers that will have to put up more than pocket change for continued efforts to play "beat the broker"....

Your arrogant tone nearly made me vomit all over my keyboard, but I feel I must address some of your points. I am well aware that the CFTC almost certainly does not have the trader's best interest at heart, and is merely following the dictates of the big Futures players and/or regulation hungry policymakers. Regardless, if there is any chance in the world that this can be stopped or altered, it is worth taking 3 minutes to send a short, to the point email. If nobody gives a single objection to this, that will just make them even more brazen in the future. Also, nobody ever said the objections should be sent to the CFTC alone. Senators, congressmen, whatever...this could only help, and certainly couldnt hurt.

The brokers are banding together to oppose this, how will it look if no traders voice an opinion in their support? You seem to be a proponent of the ideology that one should immediately give up as soon as a problem is encountered. I'm sure that attitude is serving you well in life.
  • #156
  • Edited 9:33am Jan 22, 2010 9:15am | Edited 9:33am
Quoting CurrencyAnalyst
It says so much when the average trader perfecting a hobbistic career of losing money squeals at the chance for redemption. And even more so the chronic hyper scalpers that will have to put up more than pocket change for continued efforts to play "beat the broker"......
Oh boy we have a pro on board, problem is he only trades on demo accounts as shown by his mastery of most retail trading software (see his profile) LOL.... he is an "EXPERT WITH: ACCUCHARTS, METATRADER 4, DEALBOOK 360, FXCM DEALSTATION, CMS VISUAL TRADER, OANDA FX" Wow, that is an impresive resume on his profile. He is projecting his past experience blowing demos with all retail brokers to the experience he thinks other traders had. LOL....How about posting some live trades big shot???

This time, complaints might work, as there are lobbying attempts being made by retail Forex Dealer Members (FDMs), as part of the Foreign Exchange Dealers Coalition (FXDC), to provide a united industry front to lobby congress and the CFTC. Money talks, bullshit walks. Survival is at stake for U.S. retail brokers....in the meantime, for those of you that are lazy, here is a sample email that you can send to: [b][color=#255933][email protected][/color][/b] with the subject "Regulation of Retail Forex"
------------------
"The attempt to limit retail forex margin to 10 to 1 in the US will have the opposite effect of the intended outcome. Instead of retail forex being more regulated, most brokers and traders will open offices and accounts offshore. Therefore, when this happens, you will have zero regulatory control of retail forex. In addition, this will cost jobs in the U.S. and provide employment to foreigners. Bad for the U.S. economy and continuing the trend of lost jobs in U.S. because of these going to foreigner's."
--------------------------------

The CFTC is required to publish comments on the proposed rules and has the power, although not required, to change the proposed rules based on the comments received.
  • #157
  • Jan 22, 2010 1:42pm Jan 22, 2010 1:42pm
It looks as though I've upset a few of the FX Drama Kings here. One challenges that I'm nothing more than a demo trader by whats in my profile. I I have trading FX Live since nearly the beginning of the last decade. I have become known on first name basis with several top tier Spot Brokers, and have discovered many software anomalies that as a direct result have been corrected over the years. How did you miss the fact that I have only posted 71 posts in 3.5 years. Unlike your high volume postings. I need not get every little word in.

I do not trade spot fx any longer though both of the futures brokers I use offer such, I can say that trading spot via a futures broker is no different being it is the same type ex-changeless market maker setup. Yet it does appear that a fully regulated futures broker would provide a bit more corrective attention in the effect a more than handful amount of traders were to start complaining to the Cftc regarding price discrepancies. I see the whole spot market daily in my platforms. I will say that after the CFTC finishes with the corrective changes you may find only a few Spot brokers still in business, Why because almost all of the income the market makers (All Spot Fx Brokers) make is directly from the traders loss. Point being they are not in favor of traders profiting as that is a loss off their order book. They do not have control of all aspects of price and that's how / why some of you have devised ways of profit that works some of the time at least until the server calculates your behavioral method and tweaks your entry / exit scenario thus why most of you are happy then complain that your Grail does not work any longer starting a complaining look what my broker did Thread. this Forum is full of THAT! Why do I have to say this.. any real trader knows the Spot FX is all an illusion bank to bank based pricing and the Spot brokers are only com stocking a general price for YOU the local in house trader. Once these changes all becomes full effective. You will see all to well what you had been delving in with the sharks.

Now believe me I'm not some advocate for the CFTC or any other government agency for the matter at hand. I could draft a lengthy logical appeal letter to the CFTC / NFA and what ever else is at the helm of these imposed changes, and still I would lose the bet against myself as a advocate for the Spot FX traders. Listen to what I'm telling here, those of you that have been at this for a while know the truths here, and your arrogance is wreaking of a protective shield. Spot Fx is not the only leveraged vehicle on the block. And the futures Market is not the culprit, they are under attack as well from these Government heads as well. Something Called: POSITION LIMITS are stirring the books, Just look at the overall market right now: 2:06 PM 1-22-10 Gold Is Tanking etc..etc.. The Banks are disturbed over this such a big deal against them. IF YOU WANT TO HELP THEN INFORM AND LEAD THE AMATEUR TRADERS TO NEW GROUND, DID I NOT SAY THAT AS MY LAST SENTENCE IN MY PREVIOUS POST. Get out of the Micro and become Macro!
"Look Left Think Right"
  • #158
  • Jan 22, 2010 2:28pm Jan 22, 2010 2:28pm
Quoting Toothman
You seem to think you can trade forex without leverage . Just wondering if that's been a winning strategy for you. Point is 10:1 leverage will make it impossible to trade forex even if you are Warren Buffet.

Some of you people really don't know what you're talking about.

Maybe for YOU 10:1 sucks, but for others it's just fine. I understand that if you're trading your $200 account, that you'll never get rich with 10:1. But when you're trading 6 figures and up, you don't even need to use 10:1 to make money.

I agree that the gov't intervention thing just sucks. I haven't lived in the US since 1997, but it still pisses me off to see just how out of control the gov't has become. Especially when other idiotic gov'ts see what the US is doing and actually think it's a good idea.

From my what I can see, this is a case of the gov't shooting themselves in the foot. But the gov't has become so unresponsive, they just don't give a shit what people think.

Btw, I'm from Boston. Electing a Republican to Kennedy's seat was fucking great. If that isn't telling the politicians to go fuck themselves, what is.
  • #159
  • Edited 3:02pm Jan 22, 2010 2:38pm | Edited 3:02pm
Laughable stuff....unless you are only trading EURUSD, I would like to see you get out of a forex future trade at illiquid times, the bid and ask can move 30 or more pips without a trade being executed. As a matter of fact, the CFTC may be doing this to force more people into forex futures as at the moment, most pairs cannot be properly traded as there is very little liquidity. Anyone that has traded forex futures would know what I am talking about. I rest my case.

PS. "Why because almost all of the income the market makers (All Spot Fx Brokers) make is directly from the traders loss".......More laughable stuff. Not all retail forex firms are market makers. There are some that only make money on the spread. You just have dealt with the wrong crowd, of the firms whose software you have mastered, there is only one listed that is not a market maker and will not trade againts you.
  • #160
  • Edited 4:08pm Jan 22, 2010 3:40pm | Edited 4:08pm
Quoting wwwin
and will not trade againts you.
Now there's one thing government should reform.

If I have 10:1, I can only trade 5-8:1 (to have a decent usable margin), which makes the proposed forex leverage inferior to what stocks have now. Of course, one has to read more with stocks...
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