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  • #61
  • Jan 24, 2010 11:02pm Jan 24, 2010 11:02pm
Quoting pipmutt
Ha, right back at ya!

Despite protest there are limits on freedom of choice, it's no different in this instance. No-one is suggesting banning leverage altogether, just limiting it to what most professional traders would agree is a perfectly acceptable 10:1.

You made an argument that was flawed from the beginning as you used three specific flawed examples, and all you can say is "right back at you"?

And you question the inteligence of others?

Hmmmmmmmmmmmmmm?
  • #62
  • Jan 24, 2010 11:04pm Jan 24, 2010 11:04pm
Wow, all the assholes are really coming out the woodwork.

I thought FF was all about helping one another to succeed regardless of experience or aptitude. But, I gather I was wrong, it seems a fair number would like nothing better than seeing the rookies and small-time/part-time traders banished, retaining a small elite club of arrogant condescending pricks, but I guess they forget that they were in that boat once-upon-a-time too.
  • #63
  • Jan 24, 2010 11:07pm Jan 24, 2010 11:07pm
Quoting angus
Wow, all the assholes are really coming out the woodwork.

I thought FF was all about helping one another to succeed regardless of experience or aptitude. But, I gather I was wrong, it seems a fair number would like nothing better than seeing the rookies and small-time/part-time traders banished, retaining a small elite club of arrogant condescending pricks, but I guess they forget that they were in that boat once-upon-a-time too.
Well put!

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


Upper classes are a nation's past; the middle class is its future.
Ayn Rand
  • #64
  • Jan 24, 2010 11:17pm Jan 24, 2010 11:17pm
Quoting Mr Pipster
And you question the inteligence of others?

Hmmmmmmmmmmmmmm?
With some justification it seems!

Let's keep this civil, those who can't sustain or contribute to a reasoned and logical discussion tend to resort to name calling and personal attacks, it's not clever and it doesn't get anyone anywhere.
  • #65
  • Jan 24, 2010 11:17pm Jan 24, 2010 11:17pm
Guys,

What makes this a joke isn't that other forex brokers in other countries can offer 100:1, it is that futures brokers in THIS country can offer 50:1 or more on currency futures!

Pleae understand that the EC (EUR/USD future) has the following margin:

Initial Margin: $3,240
Maint Margin: $2,400

What this means is that you only need $3240 in your account to put on a 1 lot trade, and $2400 to maintain it.

An EC contract is 125,000 EURO's against the USD. So it is 1.25 lots. A 100:1 forex broker might require $1250 in margin, or they may require up to $1750 if they are using the USD basis and the EURUSD is at 1.400. But with the new 10:1 rules those numbers would jump to $12,500 to $17,500

SO understand that to trade the future you need you will only need $3240! They want to require the forex broker to reserve out 4-5x the amount of margin to trade the same currency.

And if we use futures day trading margins which are routinely $500-1000 per contract, then the CFTC wants to require 12-17x the margin to trade forex.

My belief is that the CFTC / NFA are driven by the futures brokers who want to put the forex brokers out of business to drive the customers to themselves.
  • #66
  • Jan 24, 2010 11:23pm Jan 24, 2010 11:23pm
Quoting scattergood
My belief is that the CFTC / NFA are driven by the futures brokers who want to put the forex brokers out of business to drive the customers to themselves.
You could well be right but is that really such a bad thing? A regulated and centralized market is more of a level playing field for the inexperienced novice than an OTC bucket shop who actively encourage overleveraging, shade price, and run stops! Retail forex at this level still has a stigma attached to it, some pros won't touch it and laugh openly at those who do!

I wish I'd started in futures instead of some of the shady shops I've dealt with in the past, I could have saved myself a small fortune!!
  • #67
  • Jan 24, 2010 11:26pm Jan 24, 2010 11:26pm
Quoting pipmutt
I'll bet the vast majority of the loudest protesters are the sub-5k kiddies who use the forex market like a glorified amusement arcade, you only have to read some of the posts in this and other threads to get an insight into their mentality!
You started the name calling and now do not want any name calling?

That is the oppressor accusing the oppressed of oppression.

what hypocracy!!!!

It looks like Angus hit the nail on the head.

And why would a brit like you care, unless you are getting something out of the US regulations?

Given your inability to apply logic and your clear hypocricy, you have obtained the privilage of being ignored!!!!!!!



It only stands to reason that where there's sacrifice, there's someone collecting the sacrificial offerings. Where there's service, there is someone being served. The man who speaks to you of sacrifice is speaking of slaves and masters, and intends to be the master.
Ayn Rand
  • #68
  • Jan 24, 2010 11:36pm Jan 24, 2010 11:36pm
Quoting Mr Pipster
And why would a brit like you care, unless you are getting something out of the US regulations?
lol, of course I'm getting something out of them, CR 2-43(a) is the best thing to happen to this market in a long while, it prevents this kind of thing happening, and that's a good thing!

Trading forex with a US broker has never been better, now all they need to do is sort out protection of funds!
  • #69
  • Jan 24, 2010 11:40pm Jan 24, 2010 11:40pm
Quoting scattergood
Guys,

What makes this a joke isn't that other forex brokers in other countries can offer 100:1, it is that futures brokers in THIS country can offer 50:1 or more on currency futures!

Pleae understand that the EC (EUR/USD future) has the following margin:

Initial Margin: $3,240
Maint Margin: $2,400

What this means is that you only need $3240 in your account to put on a 1 lot trade, and $2400 to maintain it.

An EC contract is 125,000 EURO's against the USD. So it is 1.25 lots. A 100:1 forex broker might require $1250 in margin, or...
Exactly!

And in so doing, the remove our freedom of choice to a profit in thier pockets.

The hardest thing to explain is the glaringly evident which everybody had decided not to see.
Ayn Rand
  • #70
  • Edited 11:53pm Jan 24, 2010 11:41pm | Edited 11:53pm
Quoting pipmutt
You could well be right but is that really such a bad thing? A regulated and centralized market is more of a level playing field for the inexperienced novice than an OTC bucket shop who actively encourage overleveraging, shade price, and run stops! Retail forex at this level still has a stigma attached to it, some pros won't touch it and laugh openly at those who do!

I wish I'd started in futures instead of some of the shady shops I've dealt with in the past, I could have saved myself a small fortune!!
You would do well to read a book on market microstructure and then you would realize your irrational fear of a BROKER running YOUR stops. Banks and larger informed traders run stops for liquidity and that is the only reason stops are run. The CTFC or any other regulatory body for that matter won't stop this practice. Remember everyone benefits from a more liquid market so nobody is going to discourage the use of stops. And also retail brokers lack the capital to run stops.

A more "regulated" market will do nothing to help an inexperienced trader who doesn't obtain an edge. Do you think regulations will really help the losers in this zero sum game that is the forex market?

Like I said in another thread on this topic:

The inexperienced will always be separated from their money no matter the leverage... only slower...

I also love it when veteran traders say a trader doesn't need X leverage because X leverage is unnecessary and no "pro" trader I know uses X leverage. Who cares what you deem to be the normal standard leverage or whatever. To all those that say this I wish they would imposes 1:1 leverage on your account. I mean who doesn't want more of their money to be with their broker! It's a fantastic idea right! None of these brokers have ever went under right!?

How about "vet traders" not worry about what the newbies do because in the long run its those high leveraged newbies who supply some of the money the vets extract from the market. I also find it insincere because the few full time traders on this board are slowly siphoning the money from all the uninformed traders on this board. So to all the full time traders... do you really want the idiots out there who go balls to the wall to suddenly get informed and gain edges? Do you want to be against other pro traders constantly? No ofc you don't so where is this care of the little guy coming from? LOL
  • #71
  • Jan 25, 2010 12:02am Jan 25, 2010 12:02am
Quoting Deusomega
The inexperienced will always be separated from their money no matter the leverage... only slower...
I agree, death by a thousand cuts is still death!

Stop hunting/running is a perfectly legitimate practice in the market, in fact many traders use what 'players' are doing when it comes to stops as a strategy in it's own right (Boris Schlossberg outlined a simple and effective strategy a while back), if nothing else most traders are aware of those levels and place their own stops accordingly, but what I was referring to was bucket shop brokers quoting according to their book which they can do with impunity because there is no centralized market or universal price. If you honestly believe there is transparency in retail forex and that it's a level playing field between broker and client then we must have different ideas on transparency and what constitutes a level playing field! Anyway we're straying off the topic slightly, and zero sum? That's another topic altogether!

Wow, you guys are really wired over here....


Forget leverage for a minute, it's a by-product calculation, focus on risk.
  • #72
  • Jan 25, 2010 12:34am Jan 25, 2010 12:34am
Quoting pipmutt
I agree, death by a thousand cuts is still death!

but what I was referring to was bucket shop brokers quoting according to their book which they can do with impunity because there is no centralized market or universal price. If you honestly believe there is transparency in retail forex and that it's a level playing field between broker and client then we must have different ideas on transparency and what constitutes a level playing field! Anyway we're straying off the topic slightly, and zero sum? That's another topic altogether!...
You are a lot more experienced than me but does this really happen that often??? It would seem that that would be the kind've situation where some serious arbitrage could occur...

But like I said I'm a relatively new but I just haven't heard of that happening that often.

Yeah I am kind've wired hehe... I hate when people limit available options(and make no mistake higher leverage entails more options for a savvy trader) because others are easily blinded by their greed and make stupid trading decisions.

And you like you said let's focus on risk.

I think most would agree that a 1% or 2% risk per trade is fairly conservative...

So let's say one has a $1,000 dollar account...

2% risk of $1000 is $20. And let's say it is a 20 TP and 10 SL

That means that each pip is worth $2. And potential profit is $40(lets make it easy here no commissions or spreads.)

100:1 Yup we can do that! Yay making my own decisions is great!

10:1 Sorry no can do we must protect you! Now go play with crayons and remember color within the lines!

Oh and remember that veteran traders and everybody else is worried about you and that's why we reduced your leverage. So it's all for your own good!

But wait... don't the informed traders take money from me when I lose? No No that's not true *hehe*
  • #73
  • Jan 25, 2010 12:58am Jan 25, 2010 12:58am
Quoting Deusomega
You are a lot more experienced than me but does this really happen that often??? It would seem that that would be the kind've situation where some serious arbitrage could occur...

But like I said I'm a relatively new but I just haven't heard of that happening that often.

Yeah I am kind've wired hehe... I hate when people limit available options(and make no mistake higher leverage entails more options for a savvy trader) because others are easily blinded by their greed and make stupid trading decisions.

And you like you said let's focus...

once again, logic wins the day!
  • #74
  • Jan 25, 2010 1:01am Jan 25, 2010 1:01am
Quoting Deusomega
You are a lot more experienced than me but does this really happen that often??? It would seem that that would be the kind've situation where some serious arbitrage could occur...
If only! Try getting filled on some of those 'off market' spikes which only appear on your brokers chart. As for experience it's all relative, I might have been around a while but that doesn't automatically make me a better trader or any more knowledgeable, it just makes me old!


Quoting Deusomega
Oh and remember that veteran traders and everybody else is worried about you and that's why we reduced your leverage. So it's all for your own good!
Whoa hang on, back up a bit there sparky, who said anyone is worried about anyone else, not me! I don't care what anyone else does just as long as I make some money!

Ok, so you'd settle for around 20:1, right? More?
  • #75
  • Jan 25, 2010 1:13am Jan 25, 2010 1:13am
"Despite protest there are limits on freedom of choice, it's no different in this instance. No-one is suggesting banning leverage altogether, just limiting it to what most professional traders would agree is a perfectly acceptable and functional 10:1.

If you don't like it then there are alternatives, no-one is stopping you using those alternatives, that's freedom to choose in itself isn't it?"


You would agree that limits on freedom of choice are implemented to protect would you not? Whether to protect the person who chooses or those who might be endangered by that person's choice.

Therefore, concern is implied anytime someone limits anther's ability to choose.

And yes tyranny by the majority is nice, eh?

I'm sure if they wanted to suddenly raise the capital requirements to participate in the markets 100x you would just move along to "alternatives".

And to the last point I wouldn't care if it was 400:1. Risk is the only thing that matters in my mind. As I said before the leverage won't stop the uninformed traders form losing to the informed.
  • #76
  • Jan 25, 2010 1:27am Jan 25, 2010 1:27am
Quoting Deusomega
You would agree that limits on freedom of choice are implemented to protect would you not? Whether to protect the person who chooses or those who might be endangered by that person's choice.
I can't speak for their motives but not necessarily, restricting freedom of choice could be to benefit someone else, in this instance it's suggested the CME. If that is indeed the case then 'concern' for the retail fx trader doesn't come into it.

Quoting Deusomega
And yes tyranny by the majority is nice, eh?
Majority rule, isn't that democratic?

Quoting Deusomega
I'm sure if they wanted to suddenly raise the capital requirements to participate in the markets 100x you would just move along to "alternatives".
Sure if it was restrictive to me and if there are any alternatives which are suitable, why not?

Quoting Deusomega
And to the last point I wouldn't care if it was 400:1. Risk is the only thing that matters in my mind. As I said before the leverage won't stop the uninformed traders form losing to the informed.
We agree! This is a first, shall we quit while we're ahead!
  • #77
  • Jan 25, 2010 1:27am Jan 25, 2010 1:27am
PipMutt my account is quite large and I still trade with 100:1 leverage simply because I always have. It is what I have used for over 5 years, it is what I am comfortable with. I tried 10:1 and I simply did not like it.

The new proposed rules certainly have some merit as do some of you points. However, there are much more effective ways of achieving the same result.

At the end of the day though, stupid traders will always be stupid traders. If these rules pass they just need to save up a few months longer and blow more money before they realize they cannot trade.
  • #78
  • Jan 25, 2010 1:36am Jan 25, 2010 1:36am
Quoting forex4noobs
However, there are much more effective ways of achieving the same result.
Go on, I'm interested, seriously.

I agree on the 'stupid traders will always be stupid traders', where there's a will there's usually a way!
  • #79
  • Jan 25, 2010 2:00am Jan 25, 2010 2:00am
http://img.photobucket.com/albums/v6...nchristmas.jpg
  • #80
  • Jan 25, 2010 2:16am Jan 25, 2010 2:16am
Quoting pipmutt
Go on, I'm interested, seriously.

I agree on the 'stupid traders will always be stupid traders', where there's a will there's usually a way!
To start with:

1. All US brokers under CFTC regulation should be required to explain in detail (and in a simple manner) what leverage is and the potential downsides. This currently does not happen and leads to droves of newbies Googling 'leverage' just to figure out what it is.

2. Thorough financial standing and trading experience checks should be carried out. Many off shore brokers won't allow you to open an account if you have a very low income and do not understand trading basics.

3. Complaints process should be optimized to stop disgruntled traders making unfounded claims of being 'ripped off' by their broker.

From there I am sure those amazingly intelligent US government officials can figure it out.
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