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  • #81
  • Jan 25, 2010 2:27am Jan 25, 2010 2:27am
Quoting pipmutt
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.



Majority rule, isn't that democratic?



Sure if it was restrictive to me and if there are any alternatives which are suitable, why not?



We agree! This is a first, shall we quit while we're ahead!
I wasn't aware there would be nationwide vote... I thought that a regulatory body would just execute their power over me... but now that you tell me we all get to vote... that sounds better! So when does the voting begin!?

But really if this was put to a nationwide vote the vast majority of the public would vote for it to prevent those douchey financial wizards from making easy money amirite? We know how the public love people who trade for a living or work on "wall street" instead of "main street" lol. They wouldn't worry about it having to do with retail traders or little guys. That's why they are the public after all... I mean they did elect Bush amirite majority rule is awesome!

And yeah tell that majority thing to the electoral college lolol. That tells you what the founding fathers thought about the "majority"

But, my tyranny comment was more towards your comments about if one opportunity or option dries up just moving on to something else. IE implying since you are powerless to the majority's will just move along there and find something to play with .

We probably agree on more things than we disagree on!
  • #82
  • Jan 25, 2010 5:47am Jan 25, 2010 5:47am
Big post alert...

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!
I'm sure there are some. And for these individuals, a high degree of leverage will translate into a high degree of risk because they don't value risk management.

Those individuals will lose their money, but that's their right if they so choose. Some people can only come to value risk control once they've lost enough to understand it's importance.

More to the point, national leverage restriction in a global market will not actually reduce leverage in the global market. People that feel the need to burn thru their capital are going to find a way to do that, regardless. There are plenty of overseas brokers offering 500:1 leverage that will happily do business with them. Idiots will be idiots, as you said.

While I agree, at least to some extent, that it's important to offer some common sense protections to the investing public, I don't see this rule accomplishing that. I believe the only way (at this stage) to accomplish that is to educate, not regulate, the public.

Quoting pipmutt
If safety of funds is a concern and a genuine reason to argue against this proposed legislation then there are alternatives such as trading exchange traded instruments, or for the bigger fish there are lines of credit or bank guarantees, there's no need to deposit large sums of money with a broker. From memory I believe multiple-market brokers such as IB offer some protection for their forex clients by sweeping excess funds from clients forex accounts and transferring them to (SiPC?) protected accounts.
There are 2 different things in consideration here, the account and the trades. The trades may or may not be insured, but short term traders have little need for individual trade insurance. When I trade, I take a per-trade risk. If I lose that trade, by either the market going against me or the very unlikely chance of my broker failing at that exact moment, then I'm okay with that. I wouldn't be trading if I wasn't.

It's the account balance that concerns me. In order to trade an exchange-based instrument and get any risk reduction to your balance you must trade thru a clearing house. That requires far more funds than I, and many others, have for trading. If I had millions, yes I could get private insurance. I do not. That should not preclude fund safety.

IB offers some protection, but the SIPC is very restrictive on how it operates and there are fund limits. Any lobbying efforts to add better protections in this arena have failed miserably in the past, and even if successful, they will certainly have an amount limit. The FDIC, however, has no practical fund limit. $250,000 per account, but you can open up 20 accounts within a single bank if you choose.

Quoting pipmutt
I'm fortunate in that I have the bulk of my funds with FSA regulated brokers where 100% of deposits up to £50k are protected by the FSA and FSCS, which is also an option for non-uk resident forex traders as well as far as I know.
Which is what I've said all along, this regulation will only drive trading overseas.

Quoting pipmutt
What's next, protest against speed limits, the age of consent, and alcohol licensing laws, in the name of 'freedom of choice'?
When the laws don't do as intended, yes. Speed limits (for example) are a mixed bag, some areas have realized this and increased them.

And while many laws do serve a valuable function, there's a lot of technical rules that do not. For instance that sign that says "STOP" on a desolate road in the middle of no where with no traffic. Or, sadly, many of our financial regulations. All of the rules we have... didn't stop the financial meltdown, didn't stop Bernie Madoff, didn't stop the credit bubble. These rules have a very serious credibility issue now.

Registration and capital requirements might help, but tighter leverage controls will not. Remember, the NFA has already placed it's own leverage controls. The argument here is not over registration or capital requirements, it's whether the difference between 100:1 and 10:1 leverage help. I don't see how that difference will stop another REFCO, and I don't believe it's worth it. And once business moves overseas, they lose all ability to regulate it.

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!
A regulated market, if those regulations are effective and well-administered, yes. A centralized market, never. A centralized market means reduced participants and reduced competition, increased fees and increased requirements.

But that's the benefit of choice. If you choose to believe that all retail FX details are bucket shops and aren't trustworthy, then that's your choice. You don't have to use them if you don't want. Not everyone believes this, and I believe there's a benefit to increased competition. We should both be able to do as we please provided we aren't hurting others.

What we have in this country is a sudden surge of idiot populism. While you've made some very good points, the "pro regulation" side of this debate is generally not so articulate. I do not believe these people are competent enough to manage this regulation (or any, for that matter) effectively.

So while there is something to be said for the merits of the pro-regulation argument, at heart I don't believe any of those can overcome the simple fact that our government (including organizations like the CFTC) is vastly incompetent and will find a way to screw this up, no matter how well-intentioned they may be.

Quoting pipmutt
Wow, you guys are really wired over here....
Well, this is a fairly big issue. If this regulation passes, I will be moving to a non-US broker. Frankly, I don't want to do that. It's a headache I'd rather avoid.
  • #83
  • Jan 25, 2010 5:52am Jan 25, 2010 5:52am
Quoting forex4noobs
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.
Yes, an education and disclosure section is a must. That would help.

Quoting forex4noobs
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.
I disagree. I think this will result in people requirement shopping for the easiest account, which will only result in people trading with the worst regulated of brokers.

Some regulations, like capital requirements and registration, might help reduce organizational risk. But only if people actually trade with registered organizations. Increase the requirements too far and you lose any benefits.

Instead, brokers should concentrate on educating people on these key issues.

Quoting forex4noobs
3. Complaints process should be optimized to stop disgruntled traders making unfounded claims of being 'ripped off' by their broker.
Well, you'd think they'd do that either way. But some people just want to b*tch.

Quoting forex4noobs
From there I am sure those amazingly intelligent US government officials can figure it out.
Laff.
  • #84
  • Jan 25, 2010 5:53am Jan 25, 2010 5:53am
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.
remember this quote of yours the day you can't get filled to save your life.

if someone views forex as a lottery who is it of you to decide if this is right or wrong?

you likely biznatch and moan about people on welfare, but yet you'd rather keep everyone on welfare. Is this not calling the kettle black?

Before the lottery became legalized many discussions went round about that the poor would waste their whole paycheck on lottery tickets. But yet in the end the money was to great to pass up. Slowly but surely lotteries have sprung up everywhere.

The same thing has been said about legalized gambling but yet we have riverboat casino's and Indian reservation casinos sprouting up everywhere.

I am not saying I agree with or condoning trading of mini lots with $1,000 but I am saying it should be your choice, not some pencil neck in a white hat.
  • #85
  • Jan 25, 2010 6:08am Jan 25, 2010 6:08am
Quoting damagedv1
What's all the fuss? I have a 60k account..I trade 10 standard lots and average 10 pips a day and make close to 20 k a month. If this rule goes into effect, I now how to have a 600K account to do the same thing. Just because you probably trade mini-lots and it won't effect you, don't assume that people who make real money won't get affected. This isn't a stupid little game to me...

Pipmutt, would rather see you on welfare. He would endorse the check every month. This way you won't hurt yourself.
  • #86
  • Jan 25, 2010 6:45am Jan 25, 2010 6:45am
Can we keep the ad hominem attacks down?

I know we're all emotionally involved in this, but if we can't muster a little respect for our fellow traders we're not only going to get binned, we're also proving the regulators right (that we can't control ourselves).
  • #87
  • Jan 25, 2010 6:52am Jan 25, 2010 6:52am
Quoting Rabid
Can we keep the ad hominem attacks down?

I know we're all emotionally involved in this, but if we can't muster a little respect for our fellow traders we're not only going to get binned, we're also proving the regulators right (that we can't control ourselves).
I agree, do not start the cliched forum flame war. Pipmutt does not agree that the rules are counter productive....... but who cares what he thinks. The fact is the majority of us do think 10:1 enforced leverage is counter productive. So instead of engaging in pointless arguments we should put our time towards something constructive.

Sign the petition in this thread and have your say on the proposed changes. This way we can actually do something about it.
  • #88
  • Jan 25, 2010 7:23am Jan 25, 2010 7:23am
Quote
but who cares what he thinks.

Quite the contrary, it matters because this is a common opinion among people. With the right counterpoint, rational people can be convinced otherwise.

It's never bad to know what objections stand in your way.
  • #89
  • Jan 25, 2010 7:30am Jan 25, 2010 7:30am
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!!
Well, besides the fact that it is inherently unfair to treat on market significantly better than another for no reasonable reason?

Also, if you had done the research and understood the differences in the markets you could have starte in futures. You didn't. Welcome to the down side of a free marke, the ability to make bad decsisions.
  • #90
  • Jan 25, 2010 7:57am Jan 25, 2010 7:57am
Quoting Rabid
Quite the contrary, it matters because this is a common opinion among people. With the right counterpoint, rational people can be convinced otherwise.

It's never bad to know what objections stand in your way.
Millions of people take part in forum flame wars daily and opinions are rarely if ever changed. It always ends in a stale mate or escalating to the point at which a moderator bans all involved. I agree that in real life a rational argument put to a rational person can change their opinion. However, on a forum it doesn't happen. Mostly because the person arguing is doing so just because he/she loves to argue.

I spent the better part of two years on a atheism forum arguing against believers about the existence of a God. I put forward intelligent, well thought out arguments against faith in a mythical creator. How many religious people did me or the hundreds of other people on my side convert? None that I know of. When people come to a forum to argue a point they do not come with an open mind. They come solely to push their own opinion. You will not convert Pipmutt into a believer. You burden yourself with an impossible task.

Your time and the time of others here is better spent trading or doing something more constructive.

And at the end of the day his opinion is rare. It is drowned out by the shouts of the thousands who disagree with the 10:1 leverage rule. The only person who you make feel better by arguing with Pipmutt is yourself.

Oh and if I remember the forum has rules that prohibit fighting. While this certainly isn't a full fledged fight it is getting closer post by post.
  • #91
  • Jan 25, 2010 9:21am Jan 25, 2010 9:21am
Quote
Millions of people take part in forum flame wars daily and opinions are rarely if ever changed. It always ends in a stale mate or
escalating to the point at which a moderator bans all involved. I agree that in real life a rational argument put to a rational person can
change their opinion. However, on a forum it doesn't happen. Mostly because the person arguing is doing so just because he/she loves
to argue.
It can happen, but not often. I've found it tends to happen when people aren't emotionally involved in their argument, but less often as
it heats up. Which is why it's probably a good idea to remain as dispassionate on important topics as possible. It provides important
clarity to the discussion.

Quote
You will not convert Pipmutt into a believer.
I'm not trying to convert anyone into a believer, I'm merely trying to provide counterpoints for consideration. He has his own views,
mostly based on the negative experiences he has had. I can't undo those experiences, but I'm sure he's able to distinguish his own
experiences from the experiences of others, and consider other possibilities once they're brought up.

Quote
The only person who you make feel better by arguing with Pipmutt is yourself.
I'm not trying to make anyone feel better, and I hope this particular statement isn't directed to me personally. I haven't argued with him
at all, and in general I respect his opinions and have found him to be a rational person. Of my posts in this thread, only one has been
directed to pip, and I did my best to keep it tempered.

There's an overwhelming opinion against the leverage restrictions in this thread, and probably in this forum as a whole. But most of the
opinions on this topic, both pro and con, are not exactly nuanced. All I can hope to do is pose some counterpoints for consideration in an
attempt to improve the level of discourse.

Frankly, I take greater issue with a blunt force argument in agreement than well-reasoned argument against.

Anyway.

I will sum up my concerns with this:

Leverage and risk may be correlated, but there is a distinction. A person can take high risk with low leverage and low risk with high leverage.
We should be focused on educating people on the difference between the two, not continuing the stereotype. It is possible to use high leverage
productively, without exposing yourself to undue risk.

I have no problem with effective rules that are likely to accomplish their goal, and certainly some regulation is of benefit to the investment
community. However, this particular rule is unlikely to accomplish it's goal and is unlikely to be effective given the global nature of forex trading.

To cap it off, the call for this regulation stems from an ignorant populist response to a problem most don't understand. The bureaucrats in charge
are apparently too incompetent to create a nuanced solution, and don't even seem to understand why they should try. Given this, I am very
doubtful that anything good will come from this rule.
  • #92
  • Jan 25, 2010 11:48am Jan 25, 2010 11:48am
The 10:1 leverage rule working it out, is basically only going to knock the scalpers out of the market, this is a anti scalper thing as we are the only ones which really trade at a leverage level which this is likely to affect.

Our 20 - 30SL's , fall into the 1.2-1.8% risk group, a 200SL falls into a 12% loss group based on a $1700 account which no 200SL user would trade at anyway.


* 200SL just used as a common reference point!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #93
  • Jan 25, 2010 12:45pm Jan 25, 2010 12:45pm
no way does it just affect scalpers, it affects everyone!
  • #94
  • Jan 25, 2010 1:42pm Jan 25, 2010 1:42pm
Some lucid and well thought out arguments there, and it's those points which need highlighting to the powers that be. Going by the majority of responses in this and other threads I suspect the CFTC are inundated with inane comments from those who perhaps don't fully understand what they're supporting or why they're supporting it, which detracts from the message experienced traders are trying to get across and reinforces the justification for exactly this type of restriction. In other words the signal:noise ratio is probably like it usually is in discussion forums, this thread being a good example!

Education seems to be a good solution, but who's going to do the educating? Brokers won't, they thrive on inexperienced novices. The government and regulatory bodies probably won't go beyond a statutory warning. And again, going by the majority of posts on this suject it seems traders who need educating the most aren't too receptive to being educated! Education seems like a futile task on the face of it.

Assuming the CFTC and NFA aren't utterly incompetent, and assuming they already know the gist of the pertinent points put across by a couple of people on this thread and elsewhere, why do you think they are pursuing a 10:1 leverage cap? Your arguments make sense and prove that at least some retail forex traders know the score, so why introduce the cap? Is it really that they want to steer traders towards futures, or is there something else more sinister behind it do you think?
  • #95
  • Jan 25, 2010 2:45pm Jan 25, 2010 2:45pm
Here are excerpts from my comment paper sent to the CFTC - it addresses several of the additional consumer protection issues traders have raised here, as well as succinctly articulating the argument re 10:1

Dear Mr Stawick,

Thank you for the opportunity to comment on the proposed changes to retail Forex. The Commission is to be congratulated on the many excellent initiatives to address consumer protections.

For the purposes of comment, this paper will address only two of the proposed changes, The paper will however, also raise additional matters of importance to retail forex consumers. These additional matters are consumer protection initiatives that the Commission may wish to consider further and include in the proposed legislation.


1. Proposed Regulation 5.9 - Security Deposits for Retail Forex, in particular, Proposed Regulation 5.9 (a) which requires each RFED and FCM to collect from the customer a security deposit equal to ten percent of the notional value of the retail forex transaction, effectively limiting leverage across the board to 10:1.

Comment: The proposed tightening of leverage to this extent reaches well beyond what is required to adequately address consumer protections. It will instead, very likely be wholly counter-productive to industry viability, giving rise to unintended consequences (as already stated by the FXDC members) in sending significant volumes of US business and taxation revenue off-shore.

From the trader's perspective, 10:1 across the board fails to recognize the varying levels of skill and knowledge already present among more experienced traders; it discourages entrepreneurship; it disenfranchises small accounts from participation; it fails to acknowledge the root causes of traders taking excessive risk; it fails to take into account the impact of the Commission's own regulatory initiatives (particularly regarding new disclosure provisions, capitalization and registration requirements) in this same document (if implemented), many of which will assist to address the exposure to risk issues for traders operating in the off-exchange arena; it is premature (and potentially unnecessary) given the need to allow sufficient time for proper assessment of the recent NFA rule changes to reduce leverage from 400:1 to 100:1.

In reviewing the Commissions' supporting argument in favor of reducing leverage to 10:1, it appears that the Commission is particularly concerned about ensuring solvency of dealers (a legitimate concern), without necessarily taking into full account the impact of a further widespread blanket reduction in leverage upon traders and the industry as a whole.

Nevertheless, recognition by the Commission of the potential perils for new traders (in particular) to engage in excessive risk taking is an entirely valid and shared concern. It is therefore proposed that leverage be moderated as follows -

10:1 for the first 3 months of live trading
25:1 in the next 9-12 months
50:1 for traders up to 2 years
100:1 for traders with more than 2 years

This structure enables the CFTC to put some brakes into the system early on (which is where most of the damage occurs for new traders). Traders who prefer higher levels of leverage would still be able to utilize that capacity but must demonstrate sufficient experience to be fully cognizant of the risk. Moreover, if graduated levels of leverage are linked to improved online education (see # 5 below), such a structure provides traders with considerable incentive to improve both their knowledge base and performance. This is a potential win/win outcome for dealers and traders alike. Successful traders are long-time repeat business. It also provides a measured, balanced response by the Commission to meet it's obligation to protect consumers at the point at which they are most vulnerable to exploitation (due to the new traders' lack of experience and knowledge) yet also importantly recognizes that more knowledgeable and experienced traders are sufficiently competent and capable of making their own risk management decisions and are entitled to have those freedoms at their disposal.




Additional Consumer Protection Matters:

3. Proposed New Regulation: Creation of a Forex Retail Traders' Consumer Advice Bureau

Concept: Establishment of an independent consumer run FX Retail Traders Consumer Advice Bureau and Resource Centre, funded by a very small industry levy (e.g. 0.1% of revenue) taken from dealer’s profits (similar to the UK banking/finance industry initiative recently implemented).

Comment: A Consumer Advice Bureau would enable traders to access fully independent high quality advice. Such an organisation could additionally act as a central resource point, collating and providing information on any and all matters associated with retail Forex, in effect, a one-stop-shop and first point of call for all new traders. Further, such an organization could meet a current need for the undertaking of quantitative and qualitative research on consumer experience of the retail forex market (an adequate research base is yet to be established, but is urgently required to accurately quantify the issues and properly inform debate).

Consumers presently lack voice equity in the industry. There is no official body to speak for traders, no official body for traders to liaise with regulators or industry providers, nor indeed, an official body for regulators or industry to consult with on a regular basis. The CFTC has a fiduciary obligation to grant consumers a seat at the table from which the industry as a whole feeds.


4. Proposed New Regulation: Charter for the CAB (Consumer Advice Bureau) to establish Industry Benchmarks and issue Quality Seals.

Concept: Benchmarks and quality seals would be applicable and available to all industry providers (on a voluntary basis) who meet the standards.

Comment: This initiative provides consumers with an independent means of comparing performance and offerings between dealers and all other industry service providers. Traders tend to listen to the recommendations of other traders above any other source. Fraudulent and exploitive behaviours from less reputable operators towards the more naive inexperienced traders up to this point in time has generated a climate of mistrust and suspicion for all (regardless of whether or not such mistrust is warranted.) Voluntary accreditation of Forex service providers (brokers, IB's, mentors, educators, websites, trade signal services etc.) meeting high standards of integrity and service provision would provide a means to set a standard, and for service providers to make their own choices about meeting those standards. This in turn would provide consumers with important guide-posts to quality industry outlets and providers.


5. Proposed New Regulation - Specific Disclosure Requirements - Education.

Concept: A mandatory no-cost Forex 101 Education Module written by a team of experienced retail traders (minus commercial agendas of their own), delivered online through brokers, prior to new traders opening a live account. Leverage increases linked to successful completion of further online tutorials.

Comment: New traders are frequently drowned in a sea of completely irrelevant information, including many of the online tutorials offered by brokers free of cost to new traders. The overload of irrelevant information can divert trader attention from the trading knowledge that matters most, contributing to losses in absentia of being properly informed from the outset. While many brokers are presently making significant efforts to address trader education, the content of those courses needs scrutiny and external rigor free of any conflict of interest. The role of education, of proper and full information prior to entering the retail Forex market, together with the generating of a retail environment conducive to continued learning in the first 2 years of the trader's market experience, cannot be emphasized enough.

Summary
This moment in time is an important opportunity for the CFTC to set this industry on a sound footing for the long term. Consumers need to be partnered into all industry relationships. The business advantages to dealers are considerable (given that consumers listen to the advice of other consumers ahead of any other source), as are the advantages to the Commission in meeting it's obligation to watchdog consumer protections by ensuring fair trading practices. The regulatory changes being proposed by the Commission are for the most part, valuable additions, however they are only part of the consumer protection equation. The other part of the equation is elevating consumers themselves to a place where they can have full and fair equity at the industry table.

Thank you for the opportunity to submit comment on the CFTC's work.
  • #96
  • Jan 25, 2010 3:00pm Jan 25, 2010 3:00pm
Quoting Jade Gate
Here are excerpts from my comment paper sent to the CFTC - it addresses several of the additional consumer protection issues traders have raised here, as well as succinctly articulating the argument re 10:1

[font=Arial][size=2]Dear Mr Stawick,

Thank you for the opportunity to comment on the proposed changes to retail Forex. The Commission is to be congratulated on the many excellent initiatives to address consumer protections.

[font=Arial][size=2]For the purposes of comment,...
The best thing I think I have ever read on Forex Factory.
  • #97
  • Jan 26, 2010 1:18am Jan 26, 2010 1:18am
Thank you luckylady. Regulators are people too. So are politicians. At present, both categories are somewhat mindful of the need to pay heed to "we the people".
  • #98
  • Jan 26, 2010 5:19am Jan 26, 2010 5:19am
Quoting Deusomega
Remember everyone benefits from a more liquid market so nobody is going to discourage the use of stops.
You might want to talk to the NFA in regards to FIFO. If that wasn't to discourage the use of stops among other things then what is?

Run stops to get liquidity? If the market needs liquidity why not jump outwards to attract additional orders? Oh wait due to FIFO limit orders and stop orders don't work like they once did.

Oh, I see the reason for oversight... screw it all up and make it go away because no one in the white hats understand the functions of the market.

In regards to risk: leverage is a function of risk. You can't trade without leverage. Without it no matter what level you'd suffer a margin call without leverage whether it be 1:1 or more.

What the hell? margin call? what the hell is that? exclaim the Futures broker. This is the point in which all your trades are closed automatically so you're not on the hook for more money... something that isn't the case in the futures market due to the lack of LIQUIDITY.

If you good ole boys were so smart you would have figured out the liquidity problem long time ago. You know what "lock limit" is though don't you? [not a bad thing if you're in it the right way, normally this isn't the case is it?]

Leverage is not the enemy, stupidity is the enemy.

There is a waiting period in this country to obtain a firearm, does this keep the stupid or insane from obtaining a weapon? Sure it's a good law but does it work 100%? Do they train you before hand on how to use a firearm properly?

If they were so interested in protecting us from ourselves could they teach us to trade properly and profitably themselves? Do they understand all functions of the spot Forex market? Or are they just making rules to be making rules... rules that their brethern in the Futures market don't abide by?
  • #99
  • Jan 26, 2010 5:33am Jan 26, 2010 5:33am
Quoting pip_seeker

Leverage is not the enemy, stupidity is the enemy.

If they were so interested in protecting us from ourselves could they teach us to trade properly and profitably themselves? Do they understand all functions of the spot Forex market? Or are they just making rules to be making rules... rules that their brethern in the Futures market don't abide by?
The role of education in remedying some of the CFTC's concerns is critical. From the CFTC perspective, they have to deal with the collosal mess and damage left by disreputable operators and a regulatory environment which at present, leaves them powerless to address some of the key issues. Many of the changes they are proposing, are in fact excellent (for those who have taken the time to read the document) and will go a long way towards reducing the complaint volumes and ensure fair trading practices.

Regulation on fair trading is only part of the solution however. The other part is setting in train an environment that promotes success, rather than fostering failure. That's where education and other consumer protection initiatives come to the fore.
  • #100
  • Jan 26, 2010 5:43am Jan 26, 2010 5:43am
Quoting Jade Gate
That's where education and other consumer protection initiatives come to the fore.
Education is freely available right now yet still the majority are in the dark, it's a pointless task trying to educate the uneducable, or those not receptive to being educated.

Is consumer protection really the prime motive behind these new regulations though? It seems an odd way to go about trying to protect the gullible novice.

Interesting posts by the way, please follow up with the CFTC reply to your paper.
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