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

  • #801
  • Mar 23, 2010 2:46am Mar 23, 2010 2:46am
Quoting m78
1% is 100:1 and 2% is 50:1

here if you want to read in english

http://translate.google.com/translat.../cd-forex.html

it says: "If you have an account Trader, the margin required to operate in the following markets is 1% on the total value of the position: EUR / USD, GBP / USD, USD / JPY, USD / CHF, EUR / GBP, AUD / USD and EUR / YEN. All other cross currency applies a margin requirement of 2%."
yeah thanks i forgot about google , i was replaying to coscorp who said that Italian brokers offers only 1:1 as leverage ...
  • #802
  • Mar 23, 2010 3:37am Mar 23, 2010 3:37am
http://www.borsamonitor.it/index.php...=1373&Itemid=1

it's in Italian but the I'll translate the first paragraph

Bankitalia risponde a AFIN, (associazione no profit degli intermediari finanziari), e conferma che le regole sul Forex cambiano: niente pił leva. Lo scopo: ridurre i rischi per i broker ed il cliente. L'effetto: sicuramente meno volumi e clientela.

Bankitalia (Italian Central Bank) responds to AFIN (non profit organization of financial intermediaries) and confirms that the rules on Forex are changing. no more leverage. The goal: reduce risks for the brokers and the clients The effect: definitely less volume and customers


just trying to check if it's already in force or has to be brought in - but in anycase it's been decided - end of story.
Nihil inimicus quam sibi ipse Marcus Tullius Cicero
  • #803
  • Mar 23, 2010 3:37am Mar 23, 2010 3:37am
Quoting tar
This is from IGmarkets Italy website , i dont understand the language but i c 1% and 2% not 1:1

http://www.igmarkets.it/cfd/cd-forex.html
Translation:

"IG Markets applies a margin on currencies with effect from 1% to a maximum of 2% on certain currencies. Moreover, through the insertion of a stop loss margin can be further reduced."
Scarlett
  • #804
  • Mar 23, 2010 3:47am Mar 23, 2010 3:47am
Quoting coscorp
Bankitalia (Italian Central Bank) responds to AFIN (non profit organization of financial intermediaries) and confirms that the rules on Forex are changing. no more leverage. The goal: reduce risks for the brokers and the clients The effect: definitely less volume and customers
Well if the brokers and their clients no longer exist then it will not be necessary to protect them. That's the safest position for everyone involved. An elegant solution. And nobody even has to end up on a meat-hook.

(Fade to accordion music)....Buona sera, forex....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #805
  • Mar 23, 2010 4:46am Mar 23, 2010 4:46am
Quoting The Fool
Well if the brokers and their clients no longer exist then it will not be necessary to protect them. That's the safest position for everyone involved. An elegant solution. And nobody even has to end up on a meat-hook.

(Fade to accordion music)....Buona sera, forex....
Brilliant!
Scarlett
  • #806
  • Mar 23, 2010 5:03am Mar 23, 2010 5:03am
If the new leverage were max 10:1 the number of 95% of losing traders would dramatically decrease.
  • #807
  • Mar 23, 2010 5:25am Mar 23, 2010 5:25am
Quoting metcalfe
If the new leverage were max 10:1 the number of 95% of losing traders would dramatically decrease.

Explain your position, please
Scarlett
  • #808
  • Mar 23, 2010 5:35am Mar 23, 2010 5:35am
Quoting Scarlett
Explain your position, please
My position? If it were for me no more than 5:1 leverage.
When you trade with 100:1 or 200:1 or more it's not trading, it's gambling.
Maybe this way people will stop whining when they blow their account.
  • #809
  • Mar 23, 2010 5:59am Mar 23, 2010 5:59am
Quoting metcalfe
My position? If it were for me no more than 5:1 leverage.
When you trade with 100:1 or 200:1 or more it's not trading, it's gambling.
Maybe this way people will stop whining when they blow their account.
My money, my decision. I like gambling. What's CFTC's problem? If you don't like 100:1, change yours to whatever you want. Why make it a law?
  • #810
  • Mar 23, 2010 6:29am Mar 23, 2010 6:29am
Quoting fr600
My money, my decision. I like gambling. What's CFTC's problem? If you don't like 100:1, change yours to whatever you want. Why make it a law?
Why making it a law?
Why making law fastening your seat belt? Because people are too stupid to understand that it's for their safe. That's why 10:1 leverage.
People start trading with 1k account believing to make 100k in one month and when you trade with 500:1 leverage you will blow your account in a blink and brokers know that.
If you ask anybody if it's pssible turning 1k in 10k in 6 months they probably will laugh at you, but everyday forex traders amateurs opens their account to do that without knowing anything about the market and guess what? they increase the 95% of losing traders in less than a month
Plus there are fund-money managers who do the same, blowing investors accounts using high leverage.
That's why they make it a law. For gambling there r las vegas, atlantic city and many others, or internet casino if you prefer.
  • #811
  • Mar 23, 2010 7:15am Mar 23, 2010 7:15am
Quoting metcalfe
Why making it a law?
Why making law fastening your seat belt? Because people are too stupid to understand that it's for their safe. That's why 10:1 leverage.
People start trading with 1k account believing to make 100k in one month and when you trade with 500:1 leverage you will blow your account in a blink and brokers know that.
If you ask anybody if it's pssible turning 1k in 10k in 6 months they probably will laugh at you, but everyday forex traders amateurs opens their account to do that without knowing anything about the market and guess what?...
It's called the Learning Curve....the more stupid you are, the steeper the curve.....so you lose money, give your head a shake and start again (or not). It's self-selection and works perfectly....no need for nanny-tit government to slobber over you and tell you what's good for you.....because what they can give you, they can take away.....and while you're on the subject of "stupid", why do some folks think that CFTC et al are in the business of looking out for you. Some folks didn't get the memo: CFTC et al are in the business of bureaucratic survival. Like a tumor, they don't produce life, they merely swallow life up around them so that they can survive and grow.....
You want 10:1, 1:1, or maybe let CFTC trade your account for you? Have at it. Mazeltov. But don't drag me in there with you...
Scarlett
  • #812
  • Mar 23, 2010 7:19am Mar 23, 2010 7:19am
Quoting metcalfe
If the new leverage were max 10:1 the number of 95% of losing traders would dramatically decrease.

definitely

but simply because the number of traders IN the market would decrease - the fact I have 1:100 leverage doesn't mean I have to use it all - but if I choose to do so I can.

for sure, in my opinion, it is far better and desireable to risk 1.000 than 10.000 for someone trying to learn the ropes - basic arithmetic for me.

they should concentrate on segregation of funds and due diligence on who runs the brokers' and how the dealing desks' are operated rather than force people to take a higher risk capital wise.
Nihil inimicus quam sibi ipse Marcus Tullius Cicero
  • #813
  • Mar 23, 2010 7:25am Mar 23, 2010 7:25am
Quoting Scarlett
It's called the Learning Curve....the more stupid you are, the steeper the curve.....so you lose money, give your head a shake and start again (or not). It's self-selection and works perfectly....no need for nanny-tit government to slobber over you and tell you what's good for you.....because what they can give you, they can take away.....and while you're on the subject of "stupid", why do some folks think that CFTC et al are in the business of looking out for you. Some folks didn't get the memo: CFTC et al are in the business of bureaucratic...
Well.... I explained my position.... and anybody can do whatever they like. Maybe to answer why they want to lowering the gearing as 10:1 you should take a poll asking "How many traders are trading and constantly making money using 200:1 leverage?" And "How many traders have blown their account using 200:1 leverage?"
This can be a good question answering why a 10:1 leverage would be a cure.

I wouldn't be too worry about the 10:1 leverage. we all know that brokers will find a way to bend this rule, just like some of them made with the fifo and no hedging rule. An if they won't there are regulated brokers outside the US
  • #814
  • Mar 23, 2010 7:43am Mar 23, 2010 7:43am
Quoting coscorp
they should concentrate on segregation of funds and due diligence on who runs the brokers' and how the dealing desks' are operated rather than force people to take a higher risk capital wise.
I agree, they've got their priorities all wrong in my opinion.

I've got accounts with both US and UK brokers. US I keep the bare minimum to cover margin and interim drawdown because the funds aren't protected, but with the UK broker it doesn't matter as funds are protected up to GBP 50k.

There must be ulterior motives for this 10:1 limit, I can't believe they're doing it just to protect inexperienced novices from blowing out their accounts.
  • #815
  • Mar 23, 2010 8:07am Mar 23, 2010 8:07am
banning / regulating big leverage is going to take 1 minute scalpers out of the market, which might make it easier for the big players to check where all the orders/stops ect are placed. well thats my newbie opinion. personally 10:1 or 20:1 is fine for me at this stage, but i agree with the view that they should rather focus on education etc and allow traders to take as much calculated risk as they see fit, just like you do in another business
  • #816
  • Mar 23, 2010 8:12am Mar 23, 2010 8:12am
metcalfe dear, there's another good reason for letting the situation as it is.
If I risk only 1% on every trade I wouldn't like to keep all my trading money at the broker, for obvious reasons. I'd put there only 20% and I'd add more if I lose them.

So, even the leverage according to my whole capital is never bigger than 3:1, from the broker's point of view the leverage is 15:1. Therefore, I have to add money to my trader's account only to be allowed to trade. Which is sheer stupidity.
  • #817
  • Mar 23, 2010 8:47am Mar 23, 2010 8:47am
Quoting metcalfe
Why making it a law?
Why making law fastening your seat belt? Because people are too stupid to understand that it's for their safe.
No, it's because people are too stupid to realize that when they get seriously hurt in an accident (where they weren't wearing their seat belt), ambulance, firefighters, police, emergency room doctors, etc. have to come to their aide. All of that means taxpayer money being spent, and if the person doesn't have health insurance, it increases the burden on the system if they can't pay all of the bills. Seat belts save lives and further save time and money for society.

Limiting forex leverage just isn't the same as requiring seat belts. Pick a different comparison please...
Hindsight is 20/20
  • #818
  • Mar 23, 2010 8:48am Mar 23, 2010 8:48am
Quoting Sauron
metcalfe dear, there's another good reason for letting the situation as it is.
If I risk only 1% on every trade I wouldn't like to keep all my trading money at the broker, for obvious reasons. I'd put there only 20% and I'd add more if I lose them.

So, even the leverage according to my whole capital is never bigger than 3:1, from the broker's point of view the leverage is 15:1. Therefore, I have to add money to my trader's account only to be allowed to trade. Which is sheer stupidity.
This is the truth of the matter.

For some reason a few people are under the impression that traders typically put every single dollar they have in their trading account...which is nonsense. Having 100:1 leverage allows you to trade at an appropriate lot size, WITHOUT needing to put your entire life savings with your broker.

I hope before the next time somebody comes in here saying 10:1 would be helpful, they will try to wrap their mind around this simple concept.
  • #819
  • Mar 23, 2010 9:10am Mar 23, 2010 9:10am
Quoting metcalfe
Why making it a law?
Why making law fastening your seat belt? Because people are too stupid to understand that it's for their safe. That's why 10:1 leverage.
People start trading with 1k account believing to make 100k in one month and when you trade with 500:1 leverage you will blow your account in a blink and brokers know that.
If you ask anybody if it's pssible turning 1k in 10k in 6 months they probably will laugh at you, but everyday forex traders amateurs opens their account to do that without knowing anything about the market and guess...

get real pal.........for me to trade 1 standard lot at 10:1 would cost me over 10k! HMMMM so ur telling me that if i have a 12k balance and i trade 1 standard lot at $1600 when leverage is 100:1 i would be taking more risk than trading 1 standard lot if leverage is 10:1?!?! USE COMMON SENSE, If leverage was reduced to 10:1 i would have to put more capital in my account, IN ESSENCE RISKING MORE CAPITAL! I think just about everyone here agrees with me, bc THERES NO ARGUING THIS STATEMENT.
  • #820
  • Mar 23, 2010 9:37am Mar 23, 2010 9:37am
so is leverage going to be 10:1 or not
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