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

  • #821
  • Mar 23, 2010 9:48am Mar 23, 2010 9:48am
The decision isn't out yet. Hopefully everyone who cares about their account and their own (along with their fellow traders') abilities to trade as they like has made comments to the CFTC. Personally I suspect it will not change, but let's wait and see.
  • #822
  • Mar 23, 2010 9:54am Mar 23, 2010 9:54am
Quoting mfoste1
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.
Still waiting for someone proving regular monthly profit using more than 100:1 leverage.
I know you don't have to use all the leverage you have set... then why set it up so high? answer. just to blow your account when you want to cover a loss.
Here I see everybody doesn't like the 10:1 leverage so I hope that this rule will never be for real... but please stop crying and whining over your broker that misquotes 1 pip and your margin call is being touched.
Yes, margin call, a concept that every investor should never face, but it's something that occurs too often. so keep your 500;1 leverage and let the brokers grow they greed. No wonder they are your counterparty rather than offset your order (and by you I mean everytrader)
  • #823
  • Mar 23, 2010 10:02am Mar 23, 2010 10:02am
Quoting metcalfe
Still waiting for someone proving regular monthly profit using more than 100:1 leverage.
none
  • #824
  • Mar 23, 2010 10:18am Mar 23, 2010 10:18am
Quoting metcalfe
Still waiting for someone proving regular monthly profit using more than 100:1 leverage.
I know you don't have to use all the leverage you have set... then why set it up so high? answer. just to blow your account when you want to cover a loss.
Here I see everybody doesn't like the 10:1 leverage so I hope that this rule will never be for real... but please stop crying and whining over your broker that misquotes 1 pip and your margin call is being touched.
Yes, margin call, a concept that every investor should never face, but it's something that occurs...
I think this view is rather blunt, but I agree. I have no need for such high leverage. I trade 1:20, with full lots every time. I really don't think I should trade so heavily and only plan to do so for one year.

The reason I can survive this is that my system has a 70% strike rate. I will typically sustain one losing month, by 25-100 pips. The rest are all 200+. If you have an up and down system (like those of you who sustain multiple losses waiting for a homerun) trading this high leverage will just make your account a rollercoaster.

You'll be like fabio when the bird hit him in the face lol.
  • #825
  • Mar 23, 2010 10:19am Mar 23, 2010 10:19am
Quoting metcalfe
Still waiting for someone proving regular monthly profit using more than 100:1 leverage.
I know you don't have to use all the leverage you have set... then why set it up so high? answer. just to blow your account when you want to cover a loss.
Here I see everybody doesn't like the 10:1 leverage so I hope that this rule will never be for real... but please stop crying and whining over your broker that misquotes 1 pip and your margin call is being touched.
Yes, margin call, a concept that every investor should never face, but it's...

Yes you do hope the rule comes into effect, otherwise why would you be arguing the 10:1 side? it doesnt make sense....the only thing im crying and whining about is the fact that the CFTC is trying to take away my right to control my own risk........the only reason i want leverage to stay the same is TO PAY LESS FOR THE LOT IM TRADING, IN ORDER TO LOWER MY RISK....Im not asking for 500:1, 400:1 or 200:1, 100:1 is perfect for the retail trader because it caters to all, those that are very risk conservative and those who like to be aggressive.... Not every retail trader is an idiot like you think that maxes out his leverage on every trade...Im a very aggressive trader, generally the max risk ill take is 20% of my usable margin, but my entries are accurate. I reap higher returns than most as an effect. Margin call that every investor should never face?? its part of the business when you screw up!If you get a margin call, you deserved it, no doubt there. Thats the traders fault for not managing his risk....dont blame every trader and pool them all together as traders who cant handle leverage bc its not true by any means.
  • #826
  • Edited 10:34am Mar 23, 2010 10:27am | Edited 10:34am
Quoting lbranjord
I think this view is rather blunt, but I agree. I have no need for such high leverage. I trade 1:20, with full lots every time. I really don't think I should trade so heavily and only plan to do so for one year.

The reason I can survive this is that my system has a 70% strike rate. I will typically sustain one losing month, by 25-100 pips. The rest are all 200+. If you have an up and down system (like those of you who sustain multiple losses waiting for a homerun) trading this high leverage will just make your account a rollercoaster.

You'll...
Where can I read about the bird hitting fabio in the face?
Scarlett
  • #827
  • Mar 23, 2010 10:28am Mar 23, 2010 10:28am
Quoting metcalfe
Still waiting for someone proving regular monthly profit using more than 100:1 leverage.
I know you don't have to use all the leverage you have set... then why set it up so high? answer. just to blow your account when you want to cover a loss.
Here I see everybody doesn't like the 10:1 leverage so I hope that this rule will never be for real... but please stop crying and whining over your broker that misquotes 1 pip and your margin call is being touched.
Yes, margin call, a concept that every investor should never face, but it's something that...
So, I trade 3 different pairs, one lot for each pair, on a 10k acc. I only risk about $150 a pair (I'm a short term trader) so that keeps things reasonable. Now, using your reasoning, I must have a 45k acc.(which you maintain is the prudent thing to do) just to be able to initiate those 3 positions.

How is this going to be a benefit or save me from......something or other?

I'm not trying to pick a fight with you, I just don't understand why changing my leverage is going to be a benefit. All I see is the "possibility" of blowing 45k instead of 10k when all hell breaks loose.(Black swans etc.)

And, I don't see what leverage has to do with being profitable?
  • #828
  • Mar 23, 2010 10:33am Mar 23, 2010 10:33am
Here's an article that appeared in the Wall Street Journal:


*********************************************************************************************
MF Global CEO Sees Trouble With CFTC Retail Forex Proposal


BOCA RATON, Fla. (Dow Jones)--A push by federal futures regulators to lower the amount of borrowed funds U.S. retail foreign exchange investors can use is the wrong regulatory approach and could push business overseas, MF Global Chief Executive Bernie Dan said Thursday.

The U.S. Commodity Futures Trading Commission's retail forex proposal, which would cap leverage at 10-to-1, is part of a broader proposal that would also entail stricter new capital and disclosure rules as well as a new registration scheme for retail forex dealers.

The aim of the CFTC is to root out potential fraud against mom and pop investors and "protect the public." But Dan, speaking on the sidelines of the Futures Industry Association, said he doesn't think leverage restrictions are the way to accomplish the goal.

"It will go to venues outside the U.S. And if that's what they want, that can happen," Dan said. "The way I would do it is you just increase the capital requirements for foreign exchange brokers."

Increasing capital, he said, will get rid of "the concern" associated with poorly capitalized dealers.

A record-number of comments letters on the proposal have been sent so far to the CFTC from angry traders and dealers who don't want to lose the current 100-to-1 leverage rule for major currencies. In other parts of the world, like the United Kingdom, there are no leverage restrictions.

Federal lawmakers have also recently questioned if a leverage restriction is the right way to go.

The proposal already seeks to raise capital requirements on retail forex brokers up to $20 million, but Dan said the CFTC could even opt to raise that even higher. He added that restrictions on leverage could push retail forex trading into an unregulated environment.

-By Sarah N. Lynch, Dow Jones Newswires; 202-862-6634; [email protected].
*********************************************************************************************


Bernie Dan is right. Rather than touching leverage the smarter solution is raising the capital requirement for brokers. The other parts of the proposed regulation I don't disagree with. They need to keep retail forex growing.

1% margin is very reasonable. The CFTC should also maybe ask brokers to put out a pamphlet explaining leverage. It's obvious a lot of people don't understand what it is.
  • #829
  • Mar 23, 2010 10:33am Mar 23, 2010 10:33am
Quoting metcalfe
Still waiting for someone proving regular monthly profit using more than 100:1 leverage.
I know you don't have to use all the leverage you have set... then why set it up so high? answer. just to blow your account when you want to cover a loss.
Here I see everybody doesn't like the 10:1 leverage so I hope that this rule will never be for real... but please stop crying and whining over your broker that misquotes 1 pip and your margin call is being touched.
Yes, margin call, a concept that every investor should...
you would get a margin call at 10:1 as well if you only have 1 pip leeway left...
EXACTLY THE SAME RISK AS 500:1

Margin alone neither decreases nor increases your risk of loss(i.e. pure market risk)...

1000 (margin) + 1 pip

or

20 (margin) + 1 pip

either case you lose 1 pip you get a margin call!

Get it???

the only thing 10:1 does is decreases your safety of funds at a broker (i.e. broker bankruptcy: you lose more of your money) and raises the barrier to entry...(excludes smaller accounts as in exclusive CLUB)!

But your trading risk (pip loss potential) stays the same!

question is: Que Bono (Who benefits)?
Hear the music before the song is over ...
  • #830
  • Mar 23, 2010 11:14am Mar 23, 2010 11:14am
Quoting metcalfe
I know you don't have to use all the leverage you have set... then why set it up so high? answer. just to blow your account when you want to cover a loss.
)
You obviously are not reading the posts here. The reason to "set it up so high" is so that you do not have to deposit excessive amounts of money into your broker's account in order to trade at an appropriate lot size for your total amount of capital(capital anywhere, not just at your broker).

With 100:1 leverage, you are able to keep your money elsewhere, and not be forced to put it all into your broker's account just to cover ridiculous margin requirements.
  • #831
  • Mar 23, 2010 11:42am Mar 23, 2010 11:42am
ok, it seems nobody shares my point of view and it's good having different opinions.
It's even ok for a trader blowing his account in a blink... nobody forbids to bet all your life's saving on red or black.

I think it's ok with 10:1 rule is that prevents your account blowing in few days. For me it's really hard to understand how can you trade 1 lot with 1k account without blowing your account very fast, and this is 100:1 so think about 3 lots in 1k account (300:1)

And after all posts against my point of view I don't see anybody saying "Hey, I have been trading x years using 100 200:1 leverage and constantly in profit. Here's the proof"
  • #832
  • Mar 23, 2010 11:48am Mar 23, 2010 11:48am
Quoting metcalfe
ok, it seems nobody shares my point of view and it's good having different opinions.
It's even ok for a trader blowing his account in a blink... nobody forbids to bet all your life's saving on red or black.

I think it's ok with 10:1 rule is that prevents your account blowing in few days. For me it's really hard to understand how can you trade 1 lot with 1k account without blowing your account very fast, and this is 100:1 so think about 3 lots in 1k account (300:1)

And after all posts against my point of view I don't see anybody saying "Hey, I...

the problem is, people need to be responsible for their own actions. if the guy is trading one lot on a 1k account, then it is his fault he didnt research more and learn more. he should be responsible for his actions. thats how the real world works. you dont go around changing all the rules for the stupid or ignorant people. you educate them. now, we all lose out on the ability to trade the way we want to because some retard complained to the CFTC/NFA. ridiculous.
  • #833
  • Mar 23, 2010 12:06pm Mar 23, 2010 12:06pm
Quoting metcalfe
ok, it seems nobody shares my point of view and it's good having different opinions.
It's even ok for a trader blowing his account in a blink... nobody forbids to bet all your life's saving on red or black.

I think it's ok with 10:1 rule is that prevents your account blowing in few days. For me it's really hard to understand how can you trade 1 lot with 1k account without blowing your account very fast, and this is 100:1 so think about 3 lots in 1k account (300:1)

And after all posts against my point of view I don't see anybody saying "Hey, I...
To be fair, no ones here have mentioned they made money consistently on 10:1 leverage with proof. If you don't know how to use the leverage, you can blow out $80,000 on 10:1 leverage as fast as $2,000 on 100:1 leverage.
  • #834
  • Mar 23, 2010 12:09pm Mar 23, 2010 12:09pm
Quoting metcalfe
ok, it seems nobody shares my point of view and it's good having different opinions.
It's even ok for a trader blowing his account in a blink... nobody forbids to bet all your life's saving on red or black.

I think it's ok with 10:1 rule is that prevents your account blowing in few days. For me it's really hard to understand how can you trade 1 lot with 1k account without blowing your account very fast, and this is 100:1 so think about 3 lots in 1k account (300:1)

And after all posts against my point of view I don't see anybody saying "Hey, I...
Learn how to use leverage. 1:100 capabilities do not mean you need to trade at that level, your position size can also determine leverage.

http://www.dukascopy.com/swiss/engli.../margin_level/
  • #835
  • Mar 23, 2010 2:14pm Mar 23, 2010 2:14pm
Quoting Tekademic
Learn how to use leverage. 1:100 capabilities do not mean you need to trade at that level, your position size can also determine leverage.

http://www.dukascopy.com/swiss/engli.../margin_level/
I do know how to use the leverage. It's the 95% of traders that doesn't
  • #836
  • Mar 23, 2010 2:22pm Mar 23, 2010 2:22pm
Quoting metcalfe
I do know how to use the leverage. It's the 95% of traders that doesn't
According to your way of thinking, because my speedmeter reads up to 160 MPH, I have to drive that fast, and you are assuming that most people do.

That is just plain bad logic on your part....According to your logic, cars should not be able to go faster than 55 MPH. Driving is much more dangerous than trading. You want me to think that you trade better than 95% of the traders and your logic makes no sense...I don't think so. I am sorry that you have blown all your accounts but that is your fault and nobody else's.
  • #837
  • Mar 23, 2010 2:31pm Mar 23, 2010 2:31pm
Quoting wwwin
According to your way of thinking, because my speedmeter reads up to 160 MPH, I have to drive that fast, and you are assuming that most people do.
Actually they do. Otherwise the 95% of losing traders would be hard to reach.

Well.... good for the brokers most people enjoy high leverage.

I have blown my accounts? If you say so... and at last you are the one profiting every month with this insane leverage aren't you?
  • #838
  • Mar 23, 2010 2:37pm Mar 23, 2010 2:37pm
Quoting metcalfe
I do know how to use the leverage. It's the 95% of traders that doesn't
If that's true, why make the remaining 5% suffer for the foolishness of those 95%?

US brokers already warns investors/traders too many times regarding the risks associated compared to brokers I've seen in other parts of the world. If people can't take that lesson, who is to blame?

The main thing is that I don't like me being regulated. If 10:1 is enforced, my capital is moving to the UK or Switzerland.
  • #839
  • Mar 23, 2010 2:51pm Mar 23, 2010 2:51pm
Quoting metcalfe
I do know how to use the leverage. It's the 95% of traders that doesn't
So you are insisting that the assumed 95% failure rate is due to leverage misuse?

I think the CFTC is hiring, you should put in your app....
  • #840
  • Mar 23, 2010 3:32pm Mar 23, 2010 3:32pm
Quoting metcalfe
Actually they do. Otherwise the 95% of losing traders would be hard to reach.

Well.... good for the brokers most people enjoy high leverage.

I have blown my accounts? If you say so... and at last you are the one profiting every month with this insane leverage aren't you?
You still don't get it. You equate available buying power with actual leverage being used. And you think that b/c someone uses lower leverage they would be profitable....wrong assumptions...conclusion, you are an inexperienced noob burned quite a few times.
And for someone like you that opened a thread on broker arbitrage, for fractional pips, it makes no sense that you are for low leverage, those 2 things are not made for each other. I rest my case.
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