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

  • #161
  • Jan 22, 2010 1:48pm Jan 22, 2010 1:48pm
Quoting magnumfreak
Leverage is misunderstood by most traders. 400:1 is no more risky than 10:1. I have always traded with the highest leverage that brokers allow. I do not risk more because of the available leverage. What it allows me to do is when a trade is funded (i.e. stop at break even) it gives me the ability to open another trade if I want. Where people get burned on leverage is they risk more because they see that they can buy more.
my thoughts exactly.
  • #162
  • Jan 22, 2010 1:53pm Jan 22, 2010 1:53pm
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.
that is an idiotic assumption.
  • #163
  • Jan 22, 2010 5:04pm Jan 22, 2010 5:04pm
"Civilization is the progress toward a society of privacy. The savage's whole existence is public, ruled by the laws of his tribe. Civilization is the process of setting man free from men. "

Ayn Rand


"Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority; the political function of rights is precisely to protect minorities from oppression by majorities (and the smallest minority on earth is the individual). "

Ayn Rand

my broker lets me set my leverage, and the trader can always adjust his/her position. I believe in freedom of choice. focus on better transparancy and honesty, but leave my leverage options alone!
  • #164
  • Jan 22, 2010 5:14pm Jan 22, 2010 5:14pm
Quoting wwwin
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...
Yep, another government control and Obamas continued attack on Capital(izm). If the US makes this change, first my money, then my family will be leaving the states.
  • #165
  • Jan 22, 2010 5:44pm Jan 22, 2010 5:44pm
Good news everybody!

http://www.guardian.co.uk/politics/2...banking-reform
  • #166
  • Jan 22, 2010 6:17pm Jan 22, 2010 6:17pm
Quoting Skyhook
Good news everybody!

http://www.guardian.co.uk/politics/2...banking-reform
Oh yeah, the British love Obama's plan, not b/c they will adopt it, but b/c some U.S. banks will move offshore, London will be the financial mecca if the US keeps up this crap.
"Of course most banks will find ways to go around the rules and that could involve going private (which Goldman Sachs could do), spin off their prop desks or move offshore"
http://www.fx360.com/commentary/kath...he-dollar.aspx
  • #167
  • Jan 23, 2010 5:14am Jan 23, 2010 5:14am
I'm amazed that anyone actually wants to use leverage about 10:1. They say the failure rate in retail Forex is around 95%, I'd suggest that the failure rate of those trading with 100:1 leverage is much higher, around 99%+. It's not difficult to see where one of the biggest causes of failure come from, over leverage.

If you had a stop loss of 1% of the market's value (a tiny amount for a stop loss in my opinion) you'd lose 10% of your account if you were wrong at 10:1 leverage.

I'd suggest that 2:1 is OK, 3:1 is OK, leverage at 5:1 is getting dodgy and 10:1 is likely to much.

As to whiether it should be illegal to let people trade with 100:1 leverage is another issue, should it be illegal to part a fool from their money? Different issue really I guess, but I'd say no, let them lose it.

Let's just say a broker that's offering you 100:1 leverage probably doesn't have your best interests at heart
  • #168
  • Jan 23, 2010 6:49am Jan 23, 2010 6:49am
DAVIDEE , i trade CFDs with 900:1 leverage sometimes...... and only risk 1% of my trading equity on the trade....go figure (and go and educate yourself about leverage and money management)
  • #169
  • Jan 23, 2010 7:05am Jan 23, 2010 7:05am
Quoting Davidee
I'm amazed that anyone actually wants to use leverage about 10:1. They say the failure rate in retail Forex is around 95%, I'd suggest that the failure rate of those trading with 100:1 leverage is much higher, around 99%+. It's not difficult to see where one of the biggest causes of failure come from, over leverage.

If you had a stop loss of 1% of the market's value (a tiny amount for a stop loss in my opinion) you'd lose 10% of your account if you were wrong at 10:1 leverage.

I'd suggest that 2:1 is OK, 3:1 is OK.......







You must have very deep pocket. The problem is most small traders don't have as much money as you do. To save up $80,000 or $300,000 USD to trade, it may take them years and years of saving if not forever. They might as well as forget about it. Back then, the minimum capital requirement to open up a forex account account is $1,000,000 USD.
  • #170
  • Jan 23, 2010 7:37am Jan 23, 2010 7:37am
You use 900:1 leverage?!

OK well, if that's what you want to do then do it.
  • #171
  • Jan 23, 2010 7:42am Jan 23, 2010 7:42am
Quoting Rise
DAVIDEE , i trade CFDs with 900:1 leverage sometimes...... and only risk 1% of my trading equity on the trade....go figure (and go and educate yourself about leverage and money management)
Yep, and leverage gives us more options for our mm & trading stratagies!

Keep & protect our freedom of choice!!!!!

cftc needs to keep thier hands off our leverage!
  • #172
  • Jan 23, 2010 7:57am Jan 23, 2010 7:57am
Quoting Davidee
I'm amazed that anyone actually wants to use leverage about 10:1....
I doubt very much if very many people use 100:1 leverage on one trade. I've seen numerous posts on this subject and the people that keep saying this is a good thing are concentrating on idiots that might use all their leverage on 1 trade. That is just ridiculous. Nobody that I've seen so far has said they want to use their leverage on 1 trade, and yes idiots will just lose their money more slowly at 10:1 but they will still lose their money, and a LOT more than they would have lost before.

In your example, 10:1 you would lose 10% of your account and at 100:1 all of it, but its still the same dollar amount the person has lost.
  • #173
  • Jan 23, 2010 8:04am Jan 23, 2010 8:04am
Quoting Davidee
If you had a stop loss of 1% of the market's value (a tiny amount for a stop loss in my opinion) you'd lose 10% of your account if you were wrong at 10:1 leverage.
I have never of heard anyone calculating stop loss like this. Also I think anyone lacking the foresight to see that they would lose 10% of their account on any one trade deserves to lose all of their money (unless you have a badass system with a sky high Kelly value and the liquidity to take the position size. Doomsday scenarios aside...)
Hindsight is 20/20
  • #174
  • Jan 23, 2010 8:16am Jan 23, 2010 8:16am
Quoting Davidee
I'm amazed that anyone actually wants to use leverage about 10:1. They say the failure rate in retail Forex is around 95%, I'd suggest that the failure rate of those trading with 100:1 leverage is much higher, around 99%+. It's not difficult to see where one of the biggest causes of failure come from, over leverage.

If you had a stop loss of 1% of the market's value (a tiny amount for a stop loss in my opinion) you'd lose 10% of your account if you were wrong at 10:1 leverage.

I'd suggest that 2:1 is OK, 3:1 is OK, leverage at 5:1...
You don't get it. If they limit to 10 to 1, you will not be able to leverage even close to 10 to 1 due to leeway for SL. And you would not be able to use strategies that use different pairs as hedge, etc. etc. etc.

As member Rise said above...
<<<<<DAVIDEE , i trade CFDs with 900:1 leverage sometimes...... and only risk 1% of my trading equity on the trade....go figure (and go and educate yourself about leverage and money management)>>>>

I concur with Rise, the pros??? that don't use??? leverage are coming out of the woodwork. LOL
  • #175
  • Jan 23, 2010 8:20am Jan 23, 2010 8:20am
Quoting Emg
You must have very deep pocket. The problem is most small traders don't have as much money as you do. To save up $80,000 or $300,000 USD to trade, it may take them years and years of saving if not forever. They might as well as forget about it.
The problem I see with it: let's say I've waited and prudently saved my six figures to start trading retail forex with max 10:1 leverage. Who knows what the regulations will be by then? I don't feel it's realistic to play catch-up all the time while slaving away at your 8-5.

"Find an 8-5 you love!" they say.
"Stop telling me what to do!" I say.

"But if you invest wisely in a diversified portfolio over the next 40 years you can retire a millionaire!"

Sure, I'll get right on that. Where do I sign up again to watch the market crash the year before I plan to retire? Let me be the captain of my own boat, kthx.
Hindsight is 20/20
  • #176
  • Jan 23, 2010 10:45am Jan 23, 2010 10:45am
"Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority; the political function of rights is precisely to protect minorities from oppression by majorities (and the smallest minority on earth is the individual). "

Ayn Rand

my broker lets me set my leverage, and the trader can always adjust his/her position. I believe in freedom of choice. focus on better transparancy and honesty, but leave my leverage options alone!

Protect our right to choose
Protect our freedom
Ptotect our leverage
  • #177
  • Edited 11:38am Jan 23, 2010 11:17am | Edited 11:38am
Well boys and girls, don't listen to the "pros" that don't use leverage or trade only futures...YOUR COMMENTS ARE BEING HEARD AND ARE BEING POSTED ONLINE BY THE CFTC...you can read them here
http://www.cftc.gov/lawandregulation...10/10-001.html

Here are some samples for the lazy ones to copy and send,

think about this too....if the CFTC thinks leverage is too dangerous, why don't they lower the leverage on futures too??? LOL, this is a self serving rule b/c there is no liquidity in forex futures..Read the last PDF file, it seems professional traders are leaving futures to trade spot b/c of the liquidity....
Attached File(s)
File Type: pdf 10-001c001.pdf   38 KB | 329 downloads
File Type: pdf 10-001c002.pdf   52 KB | 351 downloads
File Type: pdf 10-001c007.pdf   44 KB | 332 downloads
  • #178
  • Jan 23, 2010 11:26am Jan 23, 2010 11:26am
Quoting Rise
DAVIDEE , i trade CFDs with 900:1 leverage sometimes...... and only risk 1% of my trading equity on the trade....go figure (and go and educate yourself about leverage and money management)
I forgot to ask, do you trade CFDs in the USA? I didn't think folks living in the USA could even do that? Providing you're not in America you should be OK.

How many Pips for a stop lose are you using at 900:1 leverage? I still find this figure incredible. I never go above 5:1 and think even that is pushing it - normally I'm not even leveraged above 3:1.
  • #179
  • Edited 11:49am Jan 23, 2010 11:45am | Edited 11:49am
I must ask you wwwin What's your deal did you get beat as a child, locked in a broom closet for years. You seem to keep attacking anyone here that has viable input as if your the God Of Forex! If this is so your time should be so precious and valuable that you should have no time for the rest of! Look at you with nearly 2000 posts. Your becomming your own market NOISE. I don't believe I have ever called anyone out here on this forum but you sir are stirring much confusion for the ones here that are not very experienced with trading.

The Market is what it is, and the leverage situation being what this THREAD is supposed to be about, is the main event. Now it will be misfortunate if the leverage goes 10:1 because many thousands of people have gotten a taste of trading that had never considered it in any market before do to up front money (leverage)
But it wont stop the world of trading and certainly not spot fx I have personal friends that have 25k to 100+k spot accounts since way back when 50:1 was all that was available not the 500:1 insane options I have seen available. Now the effective impact on a 5k account shifting from say 100:1 to 10:1 could make it untradeable depending on what broker your with.

I have held many seminars teaching people how to trade I was 4xstrategy dot come for years. My partners and I made the decision to close our hands on training due to impending structural shifts in Net capital requirements that blew out a slew of Spot FX brokers Last year. We saw the shift and direction of regulation comming, and realized that leverage was going to be a prime directive in 2010. The gemic of low start up capital was drying up. So you can bark, protest, rally, beg for letters of concern but frankly the CFTC is not listening to traders Now! They already heard enough input via all the NFA Client broker complaints that those traders believed the spot brokers were cheating them in numerous ways.

Why not help the folks here at This forum to better understand what leverage is and just how fast pips can move to create huge loss or gain not how far one can stretch a $1000 dollar account.
"Look Left Think Right"
  • #180
  • Jan 23, 2010 11:57am Jan 23, 2010 11:57am
Quoting wwwin
Well boys and girls, don't listen to the "pros" that don't use leverage or trade only futures...YOUR COMMENTS ARE BEING HEARD AND ARE BEING POSTED ONLINE BY THE CFTC...you can read them here
http://www.cftc.gov/lawandregulation...10/10-001.html
...

interesting. if this is to be full disclosure, my email to them was missing.
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