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10 to 1 You're done...

  • #21
  • Jan 24, 2010 6:33am Jan 24, 2010 6:33am
Quoting onu
a must read...

http://www.cftc.gov/ucm/groups/publi...10-001c062.pdf

respect goes to the ctfc, they had the nuts to publish it..

If anything could make you form a conspiracy theory this one might be it.
  • #22
  • Jan 24, 2010 8:57am Jan 24, 2010 8:57am
Quoting onu
a must read...

http://www.cftc.gov/ucm/groups/publi...10-001c062.pdf

respect goes to the ctfc, they had the nuts to publish it..
Wow, nice letter, gotta love that chutzpah. When it comes to "free" market economy, few regulators and bureaucrats understand the concept of less is more. They are inherently miserable and cynical people, full of self-importance and jealousy/contempt for success-oriented individuals, who have the guts they never had, to go through the tough challenges, the ups and downs on the road to success. They remind me of a child, rudely interrupting in the middle of a grown-up conversation for some attention. Luckily we have the incredible power of demand on our side, never underestimate this power. Even if you trade with low risk and the change wouldn’t affect you, there is a chance that the next regulation will affect you, if you never stand up to these bullies.
  • #23
  • Jan 24, 2010 8:58am Jan 24, 2010 8:58am
Quoting Moody
I am a strong conservative by nature so I am against almost all forms of regulation.

However, it should be important to note that from a mathematical standpoint, individuals who use higher leverage have been known to "self-destruct".

I think that retail traders should use less leverage, but I don't think that it should be regulated into happening.
The trader should be allowed to pick the leverage. Of course, we can lower our position size but that is not the same.
  • #24
  • Jan 24, 2010 9:00am Jan 24, 2010 9:00am
Quoting Aaron
Wow, nice letter, gotta love that chutzpah. When it comes to "free" market economy, few regulators and bureaucrats understand the concept of less is more. They are inherently miserable and cynical people, full of self-importance and jealousy/contempt for success-oriented individuals, who have the guts they never had, to go through the tough challenges, the ups and downs on the road to success. They remind me of a child, rudely interrupting in the middle of a grown-up conversation for some attention. Luckily we have the incredible power of demand...
I would love to stand up to the bullies. What do you have in mind? Something more than letter writing?
  • #25
  • Jan 24, 2010 9:05am Jan 24, 2010 9:05am
Quoting Brunite
As the old saying goes; "Those who do not vote lose the right to complain about the results."
As a child on the 60s, I remember seeing a cartoon in a newspaper that showed a black man getting to vote for one of 3 white devils. The exact caption escapes me but the essence was "What do you mean you don't have a choice?"
  • #26
  • Jan 24, 2010 9:25am Jan 24, 2010 9:25am
Quoting kennyjohnson
I would love to stand up to the bullies. What do you have in mind? Something more than letter writing?
Well we can't shoot them can we?
  • #27
  • Jan 24, 2010 9:43am Jan 24, 2010 9:43am
Quoting Aaron
Well we can't shoot them can we?
We may have to.


A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government.

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.
When the people fear their government, there is tyranny; when the government fears the people, there is liberty.

Thomas Jefferson
  • #28
  • Jan 24, 2010 10:13am Jan 24, 2010 10:13am
Quoting kennyjohnson
We may have to.


A wise and frugal government, which shall leave men free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned - this is the sum of good government.

The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government.

The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.
When the people fear their...
You're preaching to the converted. However, our freedoms and constitution have been infringed upon such a long time, so question is at what point do we take up arms? Have you ever heard of caking or pieing? You simply stalk a bureaucrat and when the opportunity presents itself, you throw a cake in his face? Could be a more peaceful solution if carried out wide scale.
  • #29
  • Jan 24, 2010 10:26am Jan 24, 2010 10:26am
Quoting onu
a must read...

http://www.cftc.gov/ucm/groups/publi...10-001c062.pdf

respect goes to the ctfc, they had the nuts to publish it..
You are monsters. EPIC
  • #30
  • Jan 24, 2010 10:41am Jan 24, 2010 10:41am
Quoting Moody
No, and they shouldn't be. Let people do what they want. I'm against the 10:1 regulation.
1. lets suppose trader John (who only has a 8k account) is an educated well informed trader who has studied and he enters a trade purchasing a standard lot contract of 100,000 amount using 100:1 leverage but puts a stop loss order in place to limit risk at 30 pips and a limit order in place to secure profit at 100 pips. Basically he's risking $200 and looking to make $800. A 1:4 risk: reward ratio. So John was risking Let's say he was trading the eur/usd pair. So the margin required to enter the trade for John would be about $1,420. John risked 2.5% of his account looking to go up 10%

2. Okay lets see trader Wade is using 10:1 leverage and has the large 30k account that you wish people to have to be able to trade forex since you wanna get rid of the little guy. And let's suppose that Wade does not employ proper risk management (once again the key to decreasing exposure to risk) and he buys a standard lot contract using a margin of $14,200 about for the eur/usd. Now Wade decides in this tradethat he's not going to use a stop loss and buys the eur/usd at 1.50 because he's been reading stocks analysts comments ramping up on the gloom and doom of the dollar.
So Wade is targeting 1.52 looking to make $2,000. The next week the market goes in Wade's favor up to 1.51 and then the week after drops to 1.42. Wade hasn't employed a stop loss because he's not educated but has 30k you seek and is still sure of the dollars impending doom because of the analysts he hears on cnbc and what he's reading

AT THIS POINT WADE IS NEGATIVE $8,000. So Wade risked so far 26.6% of his account with a risk: reward ratio of 4:1. And the market could continue to fall blowing up his account or Wade may continue adding long Euro positions.

Its all about risk managment. Leverage is a tool!!!
  • #31
  • Jan 24, 2010 12:25pm Jan 24, 2010 12:25pm
Quoting Maxsmart
he enters a trade purchasing a standard lot contract of 100,000 amount using 100:1 leverage but puts a stop loss order in place to limit risk at 30 pips and a limit order in place to secure profit at 100 pips. Basically he's risking $200
Your numbers are out of whack but you're right, leverage is a tool, and in the hands of the inexperienced it can be a dangerous tool as you've demonstrated in your examples.

I really don't know what all the fuss is about though, 10:1 should be sufficient for most traders who are adequately funded, it only becomes a problem for the underfunded trader who is attempting to produce unrealistic returns in the hope he can live off trading with only limited capital.

The 'nanny state' argument might be a different thread for a different forum I think!
  • #32
  • Jan 24, 2010 12:39pm Jan 24, 2010 12:39pm
Quoting pipmutt
Your numbers are out of whack but you're right, leverage is a tool, and in the hands of the inexperienced it can be a dangerous tool as you've demonstrated in your examples.

I really don't know what all the fuss is about though, 10:1 should be sufficient for most traders who are adequately funded, it only becomes a problem for the underfunded trader who is attempting to produce unrealistic returns in the hope he can live off trading with only limited capital.

I normally trade with the 1H chart and I am doing quite well... I put on two trades a day risking 2-4% of my acc on each trade...

many of my best trades are when I get a very good entry (around -12 pips).

My account is on 37 621 dollars at the moment, risking 4%= 1504 bucks
For that to be possible in my oanda account I am using 31 662 bucks (1:50)

As you see for the same trade with 1:10 leverage it is not possible...

if this rule happens, I am done with FX. But hey, my main income is in stocks anyway...


remember we are all trading differently....
  • #33
  • Jan 24, 2010 1:11pm Jan 24, 2010 1:11pm
I beleive alot of people are also missing another fact of this proposed changed, THEY ARE TAKING AWAY YOUR RIGHTS. They want to enforce how you will trade and with how much.
  • #34
  • Jan 24, 2010 5:46pm Jan 24, 2010 5:46pm
Quoting pipmutt
Your numbers are out of whack but you're right, leverage is a tool, and in the hands of the inexperienced it can be a dangerous tool as you've demonstrated in your examples.

I really don't know what all the fuss is about though, 10:1 should be sufficient for most traders who are adequately funded, it only becomes a problem for the underfunded trader who is attempting to produce unrealistic returns in the hope he can live off trading with only limited capital.

The 'nanny state' argument might be a different thread for a different forum I think!...
what numbers were out of wack?
  • #35
  • Jan 24, 2010 5:49pm Jan 24, 2010 5:49pm
Most pairs in a standard 100k lot are $10 per pip .. So the 30 pip is 300 not 200



Quoting Maxsmart
what numbers were out of wack?
  • #36
  • Jan 24, 2010 5:55pm Jan 24, 2010 5:55pm
true that was a typo. I meant 20 or however you decide to manage your risk. But also with 100:1 leverage you don't need to purchase a 100,000. you can easily purchase a 50,000 contract. Make your stop loss 40 pips instead. And still risk just the $200. You decide. You have the ability to manage your risk without the risk of a margin call.
  • #37
  • Jan 24, 2010 6:10pm Jan 24, 2010 6:10pm
Quoting pipmutt
Your numbers are out of whack but you're right, leverage is a tool, and in the hands of the inexperienced it can be a dangerous tool as you've demonstrated in your examples.

I really don't know what all the fuss is about though, 10:1 should be sufficient for most traders who are adequately funded, it only becomes a problem for the underfunded trader who is attempting to produce unrealistic returns in the hope he can live off trading with only limited capital.

The 'nanny state' argument might be a different thread for a different forum I think!...
Underfunded by whose rules? If someone has $100 and wants to trade minilots and make cents on that $100 who gives someone the right to take that away? Why should only people who already have money be able to make money? I am in the UK but trading with a US broker at the moment, but I will soon switch if this becomes the rule. What happened to the pioneering spirit of the US????
  • #38
  • Jan 24, 2010 6:28pm Jan 24, 2010 6:28pm
I can't wait for 10:1 to go into effect. It will help to get rid of all of these lottery mentality geniuses that have infected Forex. You can still take 1,000 dollars at 10:1 and turn it into a nice balance. There is no valid reason someone with a 1,000 account should be trading mini's or larger.
  • #39
  • Jan 24, 2010 6:38pm Jan 24, 2010 6:38pm
Exactly my thoughts , a billion dollar hedge fund would say that someone with 100,000 is underfunded. It's funny how some jackass can say that someone with$ 1,000 trading micro lots is underfunded.


Quoting luckylady
Underfunded by whose rules? If someone has $100 and wants to trade minilots and make cents on that $100 who gives someone the right to take that away? Why should only people who already have money be able to make money? I am in the UK but trading with a US broker at the moment, but I will soon switch if this becomes the rule. What happened to the pioneering spirit of the US????
  • #40
  • Edited 6:47pm Jan 24, 2010 6:42pm | Edited 6:47pm
Because you can't use high leverage doesn't mean someone smarter can't. Everyone shouldn't be limited to YOUR abilities


Quoting magnumfreak
I can't wait for 10:1 to go into effect. It will help to get rid of all of these lottery mentality geniuses that have infected Forex. You can still take 1,000 dollars at 10:1 and turn it into a nice balance. There is no valid reason someone with a 1,000 account should be trading mini's or larger.
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