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New Leverage rule for FX COMING?

  • #121
  • Jan 21, 2010 11:20am Jan 21, 2010 11:20am
Quoting KPForex
if the bill really pass down? what would happen to my account? my account left around 1500 USD, mini account.. which means? i am using ibfx.. thanks
Hey KPForex- the leverage rule is only in proposal stage and isn't definite at this point. Interbank FX is working diligently with other FDM's to lobby congress and demonstrate to the CFTC that this rule is unnecessary.
Also, Interbank FX does offer micro and nano lots and the ability to trade smaller than mini lots-- so with an account your size you have several trade size options! Just wanted to clear this up. Hope that helps!

~Abigail
  • #122
  • Jan 21, 2010 12:16pm Jan 21, 2010 12:16pm
Quoting Rabid
Well, at first it has nothing to do with leverage. But most of us are planning an exodus from US brokers. Maybe we'll never execute those plans, but most of us have at least thought about it as a way to escape "the growing stupid."

Unfortunately, an organization like the IMF has a very deep reach. They have the power to influence policy across national borders. If they become an agent of "the growing stupid" we could find it difficult to find a neutral broker.
The IMF won't support a transactions tax, and the IMF seems much more interested in direct bank levies. The IMF is well aware of the disastrous results Sweden had when they tried to implement such a thing, furthermore for a transactions tax to be effective it would have to be adopted by all the g20 something that just is not going to happen.
  • #123
  • Jan 21, 2010 12:27pm Jan 21, 2010 12:27pm
Quoting KPForex
I see... how do you get that figure? $1600 USD? thanks
It's an example for the GBP/USD.

For example, if you trade 10,000 GBP/USD and the current GBP/USD price is 1.6000, then you are trading a notional amount of $16,000.

At 1% margin (100:1 leverage), you set aside 1% of $16,000
Margin requirement = $160

At 10% margin (10:1 leverage), you set aside 10% of $16,000
Margin Requirement = $1,600
  • #124
  • Jan 21, 2010 1:05pm Jan 21, 2010 1:05pm
Quoting endroute
The IMF won't support a transactions tax, and the IMF seems much more interested in direct bank levies. The IMF is well aware of the disastrous results Sweden had when they tried to implement such a thing, furthermore for a transactions tax to be effective it would have to be adopted by all the g20 something that just is not going to happen.
They're obviously still pushing forward on it.

Why would they open the policy for comments if they weren't considering it?
  • #125
  • Jan 21, 2010 1:08pm Jan 21, 2010 1:08pm
Market volume seems really low 1/3rd the Range I'd expect to see on a Thursday which is generally the best day to day trade


Has the fear of this scared people away already, too coincidental on the timing for me


SUCKS, always another problem just when you think you've got it all worked out
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #126
  • Jan 21, 2010 1:13pm Jan 21, 2010 1:13pm
What market are you looking at? DOW is down 200 pts because of Obama's hair-brained regulatory scheme. My pairs have been crazy for the last 2 days, I've been following them on the H1 and M5 it's so nutty.
  • #127
  • Jan 21, 2010 1:35pm Jan 21, 2010 1:35pm
Hi Jason,
Does this new rule supposedly apply to your institutional accounts also or just the individual accounts? Thanks.

Quoting Jason Rogers
It's an example for the GBP/USD.

For example, if you trade 10,000 GBP/USD and the current GBP/USD price is 1.6000, then you are trading a notional amount of $16,000.

At 1% margin (100:1 leverage), you set aside 1% of $16,000
Margin requirement = $160

At 10% margin (10:1 leverage), you set aside 10% of $16,000
Margin Requirement = $1,600
  • #128
  • Jan 21, 2010 2:17pm Jan 21, 2010 2:17pm
Quoting yesbee1
Hi Jason,
Does this new rule supposedly apply to your institutional accounts also or just the individual accounts? Thanks.
It doesn't apply to accounts, it applies to brokers. US brokers are forbidden from offering leverage above 10:1. Any account with a US broker, regardless of who owns it.
  • #129
  • Jan 21, 2010 4:57pm Jan 21, 2010 4:57pm
Yep another barely moved day in a normal way, then a standard Low volume HUGE Move on EJ I see.


Adapt and Over Come comes to mind
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #130
  • Jan 21, 2010 5:03pm Jan 21, 2010 5:03pm
Quoting Rabid
They're obviously still pushing forward on it.

Why would they open the policy for comments if they weren't considering it?
Did you actually read the entire article? The IMF is looking at multiple options on the table and not just a transactions tax? Once again they are looking at the trans tax to appease the left leaning wackos in the UK, but the once again the idea that a trans tax would be recommended by the IMF is slim to none and it is far more likely they go the route of the back levy as proposed by Obama and Gietner (the only reasonable policy that has come out of Washington in the past year)
  • #131
  • Edited 11:47pm Jan 21, 2010 11:08pm | Edited 11:47pm
Guys, I'm pretty much a rookie, but I have a good strategy and I'm now consistently profitable. Can someone explain to me, separate from the issue of how much funds I need in my account: does this mean that a one hundred pip move at one lot in a mini account means only a $10 profit as opposed to a $100? So I have to risk $1000 to make $100(using 100pip stop loss and a 100 pip target at one lot)? Sorry if I seem stupid, but I read the charts and enter trades, that's all I do and the rest seems Greek to me. I only work part time and I depend on the extra funds, this would be a total economic disaster for me, and yeah I emailed and filled out the form on their site. Thanx.
  • #132
  • Jan 22, 2010 2:03am Jan 22, 2010 2:03am
Quoting endroute
Did you actually read the entire article? The IMF is looking at multiple options on the table and not just a transactions tax? Once again they are looking at the trans tax to appease the left leaning wackos in the UK, but the once again the idea that a trans tax would be recommended by the IMF is slim to none and it is far more likely they go the route of the back levy as proposed by Obama and Gietner (the only reasonable policy that has come out of Washington in the past year)
I read it, there was no mention of Obama or Gietner. All I know is that they're considering it, which is enough to concern me.
  • #133
  • Jan 22, 2010 2:12am Jan 22, 2010 2:12am
Quoting Max Thrax
Guys, I'm pretty much a rookie, but I have a good strategy and I'm now consistently profitable. Can someone explain to me, separate from the issue of how much funds I need in my account: does this mean that a one hundred pip move at one lot in a mini account means only a $10 profit as opposed to a $100? So I have to risk $1000 to make $100(using 100pip stop loss and a 100 pip target at one lot)? Sorry if I seem stupid, but I read the charts and enter trades, that's all I do and the rest seems Greek to me. I only work part time and I depend on the...
That depends on the broker but if your mini lot is a 1.00 per lot then you still make 100.00 If your mini lot is .10 then it would be 10.00 The issue of leverage is how much of your money do you need on account to be able to play a 1.00 lot. You will need 10x more money to leverage at 10:1 that you would need at 100:1 that is the issue at hand. So if you have been using 1000 dollars to trade your 1.00 lot you now need 10,000 to use the same strategy and to have the same safeguards you have used in the past. Hope this answers your question.
  • #134
  • Jan 22, 2010 3:15am Jan 22, 2010 3:15am
Quoting Max Thrax
Guys, I'm pretty much a rookie, but I have a good strategy and I'm now consistently profitable. Can someone explain to me, separate from the issue of how much funds I need in my account: does this mean that a one hundred pip move at one lot in a mini account means only a $10 profit as opposed to a $100? So I have to risk $1000 to make $100(using 100pip stop loss and a 100 pip target at one lot)? Sorry if I seem stupid, but I read the charts and enter trades, that's all I do and the rest seems Greek to me. I only work part time and I depend on the...
Pip value will not change if this margin proposal pass
  • #135
  • Jan 22, 2010 3:27am Jan 22, 2010 3:27am
Thanx guys. Yeah that's scary, I don't have access to that kind of capital.
  • #136
  • Jan 22, 2010 3:48am Jan 22, 2010 3:48am
Market looks back to normal Just the Pres's speach yesterday spooking everyone hopefully.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #137
  • Jan 22, 2010 5:08am Jan 22, 2010 5:08am
Quoting Rabid
I read it, there was no mention of Obama or Gietner. All I know is that they're considering it, which is enough to concern me.
Ok fair enough, this is a topic that for me is way more important than the leverage atm but starting out there is no way I could have gotten to where I am without using high degrees of leverage and sound money management. There is great thread over at elite trade that stays on top of this really really well with a lot of great info.

http://www.elitetrader.com/vb/showth...hreadid=150546
  • #138
  • Jan 22, 2010 5:56am Jan 22, 2010 5:56am
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, a small letter is better than nothing......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....)
  • #139
  • Jan 22, 2010 7:39am Jan 22, 2010 7:39am
Regarding all the new proposed regulation - Nothing is black or white.

The regulation undoubtedly protects the common investor/trader from himself, and lets face it, its a certainty that on average the little guy loses his arse in the markets. But in the process, the opportunities for those who are capable are being taken away.

Whats better for the country as a whole and whats better for you as an individual can be very different things. If you want what's best for yourself, then you are selfish... just as I am.

Hell, I think access to the markets is a good thing for me. But I haven't convinced myself that this can be done profitably yet from a retail stance. Maybe I do need protecting? Or not.
Living the adventure in my head.
  • #140
  • Edited 9:39am Jan 22, 2010 8:28am | Edited 9:39am
As you may or may not know, the FX industry in the USA is about to be decimated by moronic CFTC bureaucrats who are seeking to impose a 10-1 leverage limitation. (see http://cftc.gov/newsroom/generalpres...pr5772-10.html )

The only way to stop this is to stand up, take action and be counted. Our voices should be heard!

HERE ARE 3 QUICK, EASY STEPS YOU CAN TAKE TO COMBAT THE CFTC PROPOSAL RIGHT NOW !!!!


1.) USE THIS PRE-WRITTEN FORM TO SEND YOUR OBJECTIONS TO THE CFTC RIGHT NOW! JUST COPY AND PASTE INTO YOUR EMAIL THE FOLLOWING:


SEND TO: [email protected]

CC TO : [email protected], [email protected], [email protected], [email protected], [email protected], [email protected]


SUBJECT HEADLINE : STRONGLY OBJECT TO 10-1 LEVERAGE LIMIT IN REGULATION OF RETAIL FOREX PROPOSAL RIN 3038-AC61

BODY OF EMAIL:

Attn : David Stawick, Secretary, CFTC
and ALL CFTC policymakers:


As a non-affiliated US-based Retail FX trader, please note for the record that I am STRONGLY OPPOSED to the 10-1 leverage limit as proposed in RIN 3038-AC61 relating to the Regulation of Retail Forex.

Counter-productive effects

This senseless limit would in NO way protect, aid or benefit me but rather would greatly harm me since this restriction, if passed,

• would require that I submit substantially more margin-funds into non-protected, non-FDIC insured, non-SIPC eligible accounts, actually exposing me to increased risk in the event of bankruptcy of my Forex Broker.

• would NOT divert my business into regulated-Futures trading (as the CFTC is probably hoping), but rather would cause me to seek an unreliable, higher-risk offshore FX broker to trade through, whose practices might be questionable.

• would eliminate one of the greatest benefits of trading Forex : My ability to efficiently deploy my own trading capital in the way that I choose.

Lower FX vols require far greater leverage
FX volatilities are generally substantially lower than in the Equities or Futures market. Therefore, significantly more leverage is required simply to capture equivalent trading opportunities.

Nanny not needed
I do not want the CFTC to treat me like a child and dictate how I should trade. While 100-1 leverage is available to me - should I choose it - I am never forced to use it.

The bottom line is that OTC Retail Forex trading is NOT Futures trading. Please do not try to treat it as such!


PLEASE IMMEDIATELY STRIKE YOUR PROPOSED 10-1 LEVERAGE LIMITATIONS.


Don’t let proposal RIN 3038-AC61 become an expensive lesson in unintended consequences….


Thank you.


2.) WHEN YOU’RE DONE SENDING YOUR EMAIL, PRINT IT, THEN ALSO FAX IT TO

• CFTC FAX NUMBER 1 Fax: (202) 418-5521

• AND ALSO to CFTC FAX # 2 Fax (202) 418-5547


ATTN: CFTC SECRETARY AND POLICY MAKERS

RE: STRONGLY OBJECT TO 10-1 LEVERAGE LIMIT IN REGULATION OF
RETAIL FOREX PROPOSAL RIN 3038-AC61



3.) WHEN YOU‘RE DONE SENDING YOUR FAXES, PICK UP THE PHONE AND PHYSICALLY CALL THE FOLLWING SIX (6) PEOPLE. LET’S FLOOD THEM WITH PHONE CALLS! IF THEY’RE NOT THERE, LEAVE THEM A VOICEMAIL!!!

LIST OF CFTC ACTORS:

David Stawick, Secretary,
Tel: 202-418-5495

Thomas Smith, Chief Accountant and Deputy Director, Division of Clearing and Intermediary Oversight,
Telephone : 202-418-5495;

Jennifer Bauer, Special Counsel, Division of Clearing and Intermediary Oversight, Division of Clearing and Intermediary Oversight,
Commodity Futures Trading Commission
Tel : 202-418-5472;

William Penner, Deputy Director, Division of Clearing and Intermediary Oversight,
Tel : 202-418-5450;
FAX : 202-418-5547;

Christopher Cummings, Special Counsel, Division of Clearing and Intermediary
Tel (202) 418-5450;

Peter Sanchez, Special Counsel, Division of Clearing and Intermediary Oversight,
Telephone (202) 418-5450;

Good Luck!

Source:
Josh Levy
Founder, Managing Director at Tactical Asset Management LLC
Past:
--President at CMC Forex / CMC Markets
--Managing Director at SunGard Transaction Network
--FX Spot & FX Swaps Trader at Goldman Sachs


^^^^
I got this from another site but am allowed to repost

Its only for US citizens, though it will affect the whole market.

Put it into action. I think they are gonna go ahead no matter what.


Question: Will spreads increase after this rule is implemted?
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