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US citizens won't be able to have forex accounts overseas

  • #101
  • Aug 26, 2010 2:38pm Aug 26, 2010 2:38pm
Quoting pipmutt
lol, I give up, seriously I do!

Forexia, good trading to you!
Quoting pipmutt
Me, stay away? Nah, I love you guys!
Like I said, Welcome back!

Quoting pipmutt
Oh I wasn't asking anyone to 'open up their private trading system or trade journals', I just wondered how you use 100:1, especially when it comes to risk management, all I was interested in was a simple hypothetical example.
I hope by now you have received some "hypothetical" examples that should show you why and how high leverage helps Forex trading and why low leverage can be detrimental to some trading styles due to the uniqueness of Forex trading. And I hope by now, you can appreciate now why us "average schmucks" who weren't born with Paris-Hilton-like inheritance may need high leverage to run our trading business. But I will even give you a more concrete example:

Quoting fxoxford
100:1 leverage is just fine for forex they did a good job with that no need to lower it any more, me my self didn't come in with a lot of money but i was able to start small and now this is how i make my living, so im fighting for the small guys here the ones that don't have 10k to start but started like me with very small account and grew it day by day, so i know for a fact you don't need 10k to start to end up making a living from this business
So here is someone who has made it with high leverage and if you are able to read through many of the comments sent to CFTC from traders all around the world, there are many more like fxoxford who has made it with small acount but using high leverage and their trading business would be seriously impacted by this reduction of leverage. That is why personally I suspect that this proposal was really written for purposes to destroy rather than help Retail Forex Industry.

And besides, (here is my copy & paste of my previous post):

Quoting Forexia
pip, that's NOT the point! How much leverage to use when trading a particular investment instrument is not anybody's business but the traders'. It's up to the traders to decide how much and how and when to use leverage in their trading business. It's their trading business, their trading venture, CFTC or NFA or anybody no business in there!! Whether traders need to or actually use high leverages is IRRELEVANT here!
Quoting pipmutt
Hey, the manufacturers of my car say it's capable of 150 MPH. I'm a good driver, I can handle that kind of speed. The government says I'm only allowed to do 70 MPH. I WANT TO BE ABLE TO DO 150 MPH IF I WANT TO, IT SHOULD BE MY CHOICE, WHO ARE THEY TO TELL ME HOW TO DRIVE etc etc etc!! (I don't actually want to drive at 150 but that's irrelevant, right?)

I'm sure you get my drift.....
No, we don't catch your drift.

Because 1) We are not able to conclude that your "good of your driving" is able to "handle" driving at 150 MPH judging by the way you go back and forth on the same arguments that have already been resolved (although just for the sake of this discussion, we will assume you are.)

2) Still, this driving metaphor is not applicable here because driving at high speed and trading at high leverage are two totally different things. You cannot compare apples with oranges. Assume you are able to drive at high speed, driving at high speed would potentially endanger the lives of other drivers on the road under some circumstances beyond your control and that it is why the government has taken the steps to limit the speed limit because your action could potentially destroy other drivers' lives. Whereas trading at high leverage is something completely personal to the traders and would NOT endanger other people's lives or livelihood and trading is something that is totally within someone's control. So trading at certain leverage is a personal choice and shouldn't be limited by any "rules" or "regulations".
Make your losses in demo. Earn your profits live.
  • #102
  • Edited 2:56pm Aug 26, 2010 2:42pm | Edited 2:56pm
Quoting Trader KGB

That's not the point I was arguing. And if anyone wants sky-high leverage in the 'ol USA, they need look no further than the $500 margin futures brokers..
Yes, but we do NOT want to trade Futures!! We want to trade Spot Forex!!!

Here is the link Shrike posted in the other thread that talked about how the Dodd-Frank Wall Street Reform and Consumer Protection Bill could stop US clients from going to non-US brokers to evade the 10:1 leverage cap IF it passes:

http://blogs.forbes.com/greatspecula...forex-traders/
Make your losses in demo. Earn your profits live.
  • #103
  • Edited 8:01pm Aug 26, 2010 2:47pm | Edited 8:01pm
Quoting shrike
Another thing to consider would be that the new regs only affect retail fx. It would be intersting what the term retail exactly means, i guess just private individuals that dont meet ECP criteria. Maybe using a LLC (maybe domiciled in UK, since its cheap to found and maintain there) would be enough to escape the regulation?
According to what I have learned so far, it seems that the definition of what constitutes "Retail" is still unclear and still needs to be clarified. So far, it encompasses any "Off-Exchange OTC" and are other than "ECP" which are institutions that have to have at least $5 million assets (I think) or any "Commodity Pool Operators" approved by CFTC. Being just having "LLC" might not be enough, you have to meet certain $$'s in assets like $5 million I think.
Make your losses in demo. Earn your profits live.
  • #104
  • Aug 26, 2010 3:12pm Aug 26, 2010 3:12pm
Quoting Forexia
I hope by now you have received some "hypothetical" examples that should show you why and how high leverage helps Forex trading and why low leverage can be detrimental to some trading styles due to the uniqueness of Forex trading.
Nope, not one example. The only excuse for 100:1 that I've seen so far (apart from fund protection) has been to enable underfunded 'traders' to try and make a fast buck, that's how brökers market this stuff to the gullible and supposedly one of the reasons behind leverage being reduced.

That's ok, it's nothing new, in fact it's one of the major reasons for the high failure stats and the sheer volume of unsuitable participants in this business.
  • #105
  • Aug 26, 2010 3:32pm Aug 26, 2010 3:32pm
Here is the link to Podcasts of conference calls discussing the impact of the proposed leverage cap on Retail Forex Industry as well as the issue of US citizens trading with non-US trading firms.

There are other Podcasts that deal with tax issues in Retail Forex.

http://www.greencompany.com/Educatio...ngs-1003.shtml

Apparently from that link, the earliest deadline for any proposed rules to become law will be October 19, 2010.
Make your losses in demo. Earn your profits live.
  • #106
  • Aug 26, 2010 4:02pm Aug 26, 2010 4:02pm
Quoting pipmutt
Nope, not one example. The only excuse for 100:1 that I've seen so far (apart from fund protection) has been to enable underfunded 'traders' to try and make a fast buck, that's how brökers market this stuff to the gullible and supposedly one of the reasons behind leverage being reduced.
And that's not enough? Isn't Fund Protection the most important thing that we traders have been taught to do since our funds is the only ammunition that we have to make it in the Forex trading business? And if high leverage would allow us "underfunded traders" to do that, what more reasons or "excuses" as you put it do you want?

Quoting pipmutt
That's ok, it's nothing new, in fact it's one of the major reasons for the high failure stats and the sheer volume of unsuitable participants in this business.
Did you check into the "actual" examples that I provided to you that showed you that there are traders who are successful trading with high leverage? You might use low average but it doesn't mean low average is the only way to trade.

And speaking of hypothetical examples, perhaps you can enlighten us with some examples that can illustrate to us why you are so scared of high leverage so much?
Make your losses in demo. Earn your profits live.
  • #107
  • Aug 26, 2010 4:31pm Aug 26, 2010 4:31pm
Quoting Forexia
And that's not enough? Isn't Fund Protection the most important thing that we traders have been taught to do since our funds is the only ammunition that we have to make it in the Forex trading business? And if high leverage would allow us "underfunded traders" to do that, what more reasons or "excuses" as you put it do you want?
Ok, you're starting not to make sense now.

If you're underfunded you can't use protecting funds as the reason for wanting 100:1! By definition underfunded means you don't have sufficient funds for your endeavour, how can you protect something which you don't have


Quoting Forexia
Did you check into the "actual" examples that I provided to you that showed you that there are traders who are successful trading with high leverage?
Oh, do you mean the people who said they started small and 'made it big' using high leverage? Yeah I was thinking more of a practical example of how you use 100:1, not unsubstantiated claims of success.


Quoting Forexia
And speaking of hypothetical examples, perhaps you can enlighten us with some examples that can illustrate to us why you are so scared of high leverage so much?
It's not so much a matter of being scared of leverage, in fact it's a calculation I rarely bother to look at because it's pretty meaningless on it's own. This is what surprises me about the people who are complaining about the proposed reduction, they seem to be crossing the road but looking the wrong way! Until one day.....splaaat!

Do me a favour and analyse one of your own trades, then tell me what your risk and effective leverage were. From that you should be able to answer your own questions hopefully.
  • #108
  • Aug 26, 2010 4:46pm Aug 26, 2010 4:46pm
Quoting pipmutt
Ok, you're starting not to make sense now.
.
You mean there was a point that it did make sense? I stopped reading after the unconstitutional drivel... sorry but the states havent been the "land of the free" for quite some time... sadly. Now we are just becoming more and more the "land of the socialists". Which is probably the biggest reason the want all this to go into affect, to draw in all the money that left by the boatload last year.
  • #109
  • Aug 26, 2010 4:59pm Aug 26, 2010 4:59pm
Quoting traderjai_inhi
You mean there was a point that it did make sense? I stopped reading after the unconstitutional drivel... sorry but the states havent been the "land of the free" for quite some time... sadly.
That's probably very true, I'm not sure why they even bother trying to convince the American public that it still is, it's not like they haven't noticed!


Quoting traderjai_inhi
Now we are just becoming more and more the "land of the socialists". Which is probably the biggest reason the want all this to go into affect, to draw in all the money that left by the boatload last year.
I think they also want to channel it in the right direction. Introduce micro futures, narrow the gap between spot and futures, and bingo! I imagine if this goes through, and providing exchanges/brokers reduce commissions on M6 contracts, then quite a few traders will seriously consider exchange traded futures over OTC forex. Other things being equal it would seem like a no-brainer.
  • #110
  • Aug 26, 2010 6:15pm Aug 26, 2010 6:15pm
Quoting pipmutt
Ok, you're starting not to make sense now.

If you're underfunded you can't use protecting funds as the reason for wanting 100:1! By definition underfunded means you don't have sufficient funds for your endeavour, how can you protect something which you don't have
Why not? Because the "underfunded" traders don't need to protect their funds anymore because they have so little to protect? Is that your reasoning? You know, for "overfunded" traders, leverage is redundant because you have so much to begin with. It's the so called "underfunded" traders who need them in order for them to trade.

Quoting pipmutt
Oh I wasn't asking anyone to 'open up their private trading system or trade journals', I just wondered how you use 100:1, especially when it comes to risk management, all I was interested in was a simple hypothetical example.
Quoting pipmutt
Oh, do you mean the people who said they started small and 'made it big' using high leverage? Yeah I was thinking more of a practical example of how you use 100:1, not unsubstantiated claims of success.

Do me a favour and analyse one of your own trades, then tell me what your risk and effective leverage were.
Ok so now you DO want people to open up their trading journals to illustrate and prove to you how high leverage could work. Otherwise it would be "unsubstantiated" right? But I thought you were just interested in hypothetical example?

Quoting pipmutt
It's not so much a matter of being scared of leverage, in fact it's a calculation I rarely bother to look at because it's pretty meaningless on it's own.
You mean you don't even bother calculate your own margin? You are that "overfunded" or I should say rich? Wow, then obviously I can see why you can't see the merit of high leverage because you never needed to use it.
Make your losses in demo. Earn your profits live.
  • #111
  • Aug 26, 2010 6:21pm Aug 26, 2010 6:21pm
Quoting traderjai_inhi
You mean there was a point that it did make sense? I stopped reading after the unconstitutional drivel... sorry but the states havent been the "land of the free" for quite some time... sadly. Now we are just becoming more and more the "land of the socialists". Which is probably the biggest reason the want all this to go into affect, to draw in all the money that left by the boatload last year.
So because we are getting more and more of our choices and rights taken away, so we should roll over and surrender and let the government walk all over us by introducing this one more piece of BS "rule" to crush one more thing that finally has potential of working for us?

This rule, one the contrary, is NOT going to draw in all the money; it's gonna push the money out furthermore. You should listen to this Podcast that I am listening right now. It's really good. It gives you a lot of background information about this proposed rule, the intepretation of it and speculation of what could happen.

http://www.greencompany.com/Educatio...ngs-1003.shtml
Make your losses in demo. Earn your profits live.
  • #112
  • Aug 26, 2010 6:26pm Aug 26, 2010 6:26pm
Quoting pipmutt

It's not so much a matter of being scared of leverage, in fact it's a calculation I rarely bother to look at because it's pretty meaningless on it's own. This is what surprises me about the people who are complaining about the proposed reduction, they seem to be crossing the road but looking the wrong way! Until one day.....splaaat!

Do me a favour and analyse one of your own trades, then tell me what your risk and effective leverage were. From that you should be able to answer your own questions hopefully.
But then again, you know this rule is NOT about leverage; it's about choices. How much leverage to use when trading a particular investment instrument is not anybody's business but the traders'. It's up to the traders to decide how much and how and when to use leverage in their trading business. It's their trading business, their trading venture, CFTC or NFA or anybody no business in there!! Whether traders need to or actually use high leverages is IRRELEVANT here!
Make your losses in demo. Earn your profits live.
  • #113
  • Aug 26, 2010 6:39pm Aug 26, 2010 6:39pm
Point blank end of story. Now lets direct our efforts at letting these nazis understand this.

Quoting Forexia
How much leverage to use when trading a particular investment instrument is not anybody's business but the traders'. It's up to the traders to decide how much and how and when to use leverage in their trading business. It's their trading business, their trading venture, CFTC or NFA or anybody no business in there!! Whether traders need to or actually use high leverages is IRRELEVANT here!
Annoying Precision
  • #114
  • Aug 26, 2010 7:33pm Aug 26, 2010 7:33pm
Quoting erikte279
Point blank end of story. Now lets direct our efforts at letting these nazis understand this.
I already did. I sent my comments to the CFTC during the 2-month "Public Comment" period which closed on March 24, 2010. I just found my comment which is published on the CFTC website too.

Now a branch of the US government has a permanent record of my information in their file.
Make your losses in demo. Earn your profits live.
  • #115
  • Aug 26, 2010 7:47pm Aug 26, 2010 7:47pm
Quoting erikte279
Point blank end of story. Now lets direct our efforts at letting these nazis understand this.
Nonsense. You people are nuts.
  • #116
  • Aug 26, 2010 8:00pm Aug 26, 2010 8:00pm
Good to hear

Quoting Forexia
I already did. I sent my comments to the CFTC during the 2-month "Public Comment" period which closed on March 24, 2010. I just found my comment which is published on the CFTC website too.

Now a branch of the US government has a permanent record of my information in their file.
Annoying Precision
  • #117
  • Aug 26, 2010 8:01pm Aug 26, 2010 8:01pm
Would you care to mumble a few more sentences regarding why?

Quoting wannatradefx
Nonsense. You people are nuts.
Annoying Precision
  • #118
  • Aug 26, 2010 8:04pm Aug 26, 2010 8:04pm
Quoting erikte279
Would you care to mumble a few more sentences regarding why?
Obviously not otherwise he would've already done so. Oh well, we will direct our attention to more constructive posts from other traders.
Make your losses in demo. Earn your profits live.
  • #119
  • Aug 26, 2010 9:40pm Aug 26, 2010 9:40pm
the thread starter is a joke, why feed into his madness, you only make yourself look stupid. move on he's making fun of you and loving every bit of it. good luck to all
  • #120
  • Aug 26, 2010 9:55pm Aug 26, 2010 9:55pm
On a more grave note, the Dodd-Frank Bill is giving CFTC until Oct. 10, 2010 to pass the proposal (which includes the reduction of leverage to 10:1) into formal regulations. If CFTC fails to pass these proposal by that date, Retail Forex Trading will be banned in the US.

Read this article below:

http://blogs.forbes.com/greatspecula...down-on-forex/

This is more serious than I thought. What is going to happen to the Retail Forex brokers if Retail Forex trading really becomes illegal? Would they be allowed to remain open and provide brokerage services to non-US citizens abroad? And if they do decide to move their business to outside of US, would the "extraterritorial" powers granted to the US regulators by the Dodd-Frank Bill be extended to those former US brokerage firms who have moved outside of US if they just serve non-US citizens living outside of US?

This is going to create so much confusion.
Make your losses in demo. Earn your profits live.
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