US citizens won't be able to have forex accounts overseas | Page 12 | Forex Factory

Options

Go to
Permalinks
Print Thread

Similar Threads

Overseas brokers for US citizens: legal or illegal? 22 replies

Any brokers offering high leverage accounts to US citizens? 22 replies

Broker offering penny accounts to US citizens? 1 reply

I am not able to create virtual accounts anymore 7 replies

CFTC NEW Document - Overseas Accounts OK? 58 replies

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

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

  • #221
  • Aug 28, 2010 6:45am Aug 28, 2010 6:45am
Most people seem to make the mistake of assuming because an account has more allowable leverage, that people are using that leverage to the full, most are not, people also seem to be talking as if its a "per trade" thing, its not. The people making the point that it will stop the little person from making money are absolutely correct.

The fact remains that to even place a trade in the first place (irregardless of risk) will take 10 times the funds to be put in the account at 10:1 that it does at 100:1.

To say that the smaller investors will still be able to make money only more slowly has got to go down as the understatement of the year.

For anyone that agrees with the ruling, please answer one question for me. Hypothetical question, if you have $10,000 starting out today and trading as you do now, what lot size would you be trading.
  • #222
  • Aug 28, 2010 9:03am Aug 28, 2010 9:03am
You didnt answer MY question and now your trying to be coy about the situation. That's fine, I WIN

Quoting pipmutt
lol, nah I think it's you who's kidding with me.....can't work out how much you're leveraged indeed, yeah ok!

Next you'll be telling me you don't know what your risk is!

Good one, ya got me!

Leverage isn't an important calculation to make anyway, it's more of a by-product, it's only relevant in this discussion because you're all pointlessly whinging about the proposed cut......but I'm sure you already knew that, right!



Ummm yeah you know, safety of funds, insurance in the event your bróker goes bust.......
Annoying Precision
  • #223
  • Aug 28, 2010 11:47am Aug 28, 2010 11:47am
Quoting erikte279
You didnt answer MY question and now your trying to be coy about the situation. That's fine, I WIN

LOL good job in winning the debate!!

Make your losses in demo. Earn your profits live.
  • #224
  • Aug 28, 2010 12:42pm Aug 28, 2010 12:42pm
Quoting Forexia

LOL good job in winning the debate!!

love the avatar. so cute.
Enter Signature
  • #225
  • Aug 28, 2010 1:26pm Aug 28, 2010 1:26pm
Quoting erikte279
I WIN

Yep, you win joint first prize with Forexia for apparently not knowing how to work out how much you're leveraged or what your risk is!

Congratulations fellas!
  • #226
  • Aug 28, 2010 1:31pm Aug 28, 2010 1:31pm
Quoting luckylady

For anyone that agrees with the ruling, please answer one question for me. Hypothetical question, if you have $10,000 starting out today and trading as you do now, what lot size would you be trading.
Well I don't agree nor disagree with it. For the majority of traders it's not going to make any difference to day-to-day trading.

Quoting luckylady

Hypothetical question, if you have $10,000 starting out today and trading as you do now, what lot size would you be trading.
Not enough information, what's your stop and risk %?

For me, trading one pair intraday, probably around 50k, something around there.

Why do you ask?
  • #227
  • Aug 28, 2010 2:01pm Aug 28, 2010 2:01pm
Quoting ecTrade
No, I am quite serious...
Quoting ecTrade
If it means shelling out more dough, which I don't have, then absolutely! Or, like I said, it precludes me from trading at all.
It's not going to preclude anyone from trading, even if you've only got $10 you'll still be able to trade.

You're probably going to have to be a bit more realistic with your expected returns though!
  • #228
  • Edited 2:33pm Aug 28, 2010 2:22pm | Edited 2:33pm
This has all been hashed & rehashed elsewhere. Leverage need not have any bearing on risk for the trader. If I risk 1% per trade (or whatever) 1% risked is 1% risked regardless of how leveraged it is.

I use the spreadsheet to calculate trade size for a given % of account risked (based on 50:1 leverage). Yes obviouly if the allowable leverage is reduced you will have to increase your stake correspondingly to trade for the same profit. That is, if you still want to trade thereafter and there actually is anywhere left to trade - spot, that is.

The issue of regulation on leverage is not about the trader, its about the broker.
But most traders are going to lose all their money, anyway. So a particular trader might (a) decide to put up the additional stake to try to trade for the same profit, thereby losing even more money - where's the "protection" in that?..... or (b) say "forget it - I can't afford to trade at a worthwhile level" - thereby being spared his (inevitable) loss.
Attached File(s)
File Type: xls earn-project-9-1-10.xls   95 KB | 405 downloads
"If The Fool persists in his Folly he will become wise." - William Blake
  • #229
  • Edited 2:59pm Aug 28, 2010 2:35pm | Edited 2:59pm
Quoting The Fool

Leverage need not have any bearing on risk for the trader.
Exactly, in fact I'd go as far as saying it's a pointless calculation.

This is why I don't understand people getting so upset about the proposed reduction, just how much risk are these people taking!

Quoting The Fool

Yes obviouly if the allowable leverage is reduced you will have to increase your stake correspondingly to trade for the same profit.
If you're already trading with reasonable risk and money/trade management then I don't see the change making any difference, I mean what's the average intraday leverage, somewhere around 5 maybe, risk 1 or 2%?

The only people likely to be affected are the get-rich-quick mob who use forex like a glorified online slot machine, shooting for ridiculous returns and taking ridiculous risks to try and achieve them! Personally I think the industry as a whole would be better off without them..... and them without it, like you say the majority lose their money anyway! Then perhaps the 95% stats will change!!
  • #230
  • Aug 28, 2010 2:37pm Aug 28, 2010 2:37pm
You amuse me! You really like arguing THAT MUCH even on an issue that you don't even care about? Honestly, you don't care whether this 10:1 leverage rule becomes law or not because you don't even use it that much in your trading:

Quoting pipmutt

Leverage isn't an important calculation to make anyway, it's more of a by-product it's only relevant in this discussion because you're all pointlessly whinging about the proposed cut......but I'm sure you already knew that, right!
And for your information, for all of us, leverage IS important and we do take that into consideration when we trade. And we are making valid points to the government to show them that their rules will ruin our trading business. So it's NOT "pointless whining". They don't listen, that's their problem.

And then you said
Quoting pipmutt
I'd be overjoyed if you would, maybe I'll learn something about the benefits of 100:1 leverage and then I'll be able to join you in your petition to keep it!


We showed you examples after exampales with calculations to prove why trading at high leverage not only could be profitable but also needed.

Quoting pipmutt
Good one, ya got me!


So now you are convinced, do you have the guts to keep your promise to join our petition now? Either way, you Lost the debate. Accept it and move on. I know it's hard but you can do it.
Make your losses in demo. Earn your profits live.
  • #231
  • Aug 28, 2010 2:41pm Aug 28, 2010 2:41pm
Quoting pipmutt
Exactly, in fact I'd go as far as saying it's a pointless calculation.

This is why I don't understand people getting so upset about the proposed reduction.
well...obviously...its like having your candy taken away. Leverage is not a "right" - it 's a gift. Like any gift it can be squandered/misused or put to good use.

Most of the traders here, and I am one of them, are trading pretty small. We don't have the means or (in my case) have not yet gained the experience to be able to put up a large stake. The high leverage allows us to trade with a small stake and still realize some decent returns.

Is high leverage a tool used by the casino owners to dupe in the uninitiated and ignorant of little maeans? Well, of course it is. But for those that put it to good use it will be sorely missed if it gets reduced.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #232
  • Aug 28, 2010 2:57pm Aug 28, 2010 2:57pm
Quoting The Fool
The issue of regulation on leverage is not about the trader, its about the broker.
Then, like I said CFTC should come up with better more flexible regulations to help brokers to offer leverage rates that they can afford i.e. that match their capital reserve so they won't be operating on the "high leverage casino model" like you said earlier. Blanket reduction of leverage rates across the board is not the solution because there are brokers out there who can afford to offer high leverages and this proposal is making them sacrifice their potential business for nothing.

Quoting The Fool
But most traders are going to lose all their money, anyway.
Ok then this has little to do with leverage rates. Then why go through the trouble to cap the leverage rate when there are traders who can and want to trade at high leverage?

See, whether it's for the trader or the broker, this capping of leverage rate just doesn't make sense. That's why I suspect this rule is just put there to kill the Retail Forex business. There are so many more effective rules that CFTC could be writing if they REALLY want to help the Retail Forex business and they are not doing it.
Make your losses in demo. Earn your profits live.
  • #233
  • Aug 28, 2010 3:01pm Aug 28, 2010 3:01pm
I could not have said this better. That is exactly the reason I joined Greentraders Traders Association. People should realize the best way to get things done is with numbers.

Regards,
Jeff

Quoting Forexia
Then, like I said CFTC should come up with better more flexible regulations to help brokers to offer leverage rates that they can afford i.e. that match their capital reserve so they won't be operating on the "high leverage casino model" like you said earlier. Blanket reduction of leverage rates across the board is not the solution because there are brokers out there who can afford to offer high leverages and this proposal is making them sacrifice their potential business for nothing.



Ok then this has little to do with leverage rates. Then...
  • #234
  • Aug 28, 2010 3:04pm Aug 28, 2010 3:04pm
Quoting Forexia

Either way, you Lost the debate. Accept it and move on. I know it's hard but you can do it.
I expected better from you. Grow up for goodness sake.....

I've already replied to the rest of your post in my other replies, either you didn't understand or you're just being obtuse, same diff to me.
  • #235
  • Aug 28, 2010 3:07pm Aug 28, 2010 3:07pm
Quoting The Fool

The high leverage allows us to trade with a small stake and still realize some decent returns.
In other words you're overleveraged and taking excessive risk in order to try and achieve unrealistic returns?

If the motives for the proposed reduction are to be believed (personally I'm skeptical) then isn't this exactly the type of trader they're directing it at?
  • #236
  • Aug 28, 2010 3:11pm Aug 28, 2010 3:11pm
Quoting pipmutt
In other words you're overleveraged and taking excessive risk in order to try and achieve unrealistic returns?
incorrect. leverage is unrelated to the risk i take, which is uniform at 1% per trade or less. I am taking advantage of the leverage available to attain the best returns I can.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #237
  • Aug 28, 2010 3:17pm Aug 28, 2010 3:17pm
Quoting pipmutt
Well I don't agree nor disagree with it. For the majority of traders it's not going to make any difference to day-to-day trading.



Not enough information, what's your stop and risk %?

For me, trading one pair intraday, probably around 50k, something around there.

Why do you ask?
It doesn't matter what your stop or risk percentage is, my point is would you be able to trade safely without coming close to margin call, because that is what people don't seem to be taking into account.

Take IBFX as an example, with a $ based account, to trade 5 mini lots (50k) on GBP/USD, at 100:1 leverage, to place that trade would take at the moment $750 of margin roughly. At 10:1 that becomes $7,500 of margin used. Your margin level would be hovering around 133%. At 100% a trader is using their entire available margin, not a very comfortable position to be in at all. And don't even think about trading that size if it goes to 5:1 because you simply don't have enough money to do it.
  • #238
  • Aug 28, 2010 3:23pm Aug 28, 2010 3:23pm
Quoting The Fool

incorrect. leverage is unrelated to the risk i take, which is uniform at 1% per trade or less. I am taking advantage of the leverage available to attain the best returns I can.
Run that by me again.......you're taking 1% risk or less per trade and leveraging what, 50:1? More? How does that work out, unless of course your total exposure is >1% risk. You can't have it both ways.
  • #239
  • Aug 28, 2010 3:24pm Aug 28, 2010 3:24pm
Quoting The Fool

Most of the traders here, and I am one of them, are trading pretty small. We don't have the means or (in my case) have not yet gained the experience to be able to put up a large stake. The high leverage allows us to trade with a small stake and still realize some decent returns.
Well, with capping of leverage rate to such a low level, you will actually have to put up a "large stake" which will be difficult for you but all of us. Because the majority of us, including myself are, like you, don't have the means to put in a lot of money.

So leverage is not really a "candy" for us; it's more like "butter" for us if trading capital can be thought of as our "bread". Since trading is our "bread and butter", it's no good having our butter taken away.
Make your losses in demo. Earn your profits live.
  • #240
  • Aug 28, 2010 3:25pm Aug 28, 2010 3:25pm
Quoting pipmutt
Run that by me again.......you're taking 1% risk or less per trade and leveraging what, 50:1? More? How does that work out, unless of course your total exposure is >1% risk, you can't have it both ways.
you don't really seem to understand what leverage is. have a look at the spreadsheet i posted. risk is risk, it has nothing to do with leverage. leverage is the broker's problem, not mine.
"If The Fool persists in his Folly he will become wise." - William Blake
1 trader viewing now