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

  • #341
  • Aug 29, 2010 2:54pm Aug 29, 2010 2:54pm
Quoting pipmutt
No wonder the majority of experienced traders can't be bothered to post advice any more, your attitude really stinks for someone who's trying to learn.

The sad thing is it's people like you and the other clowns in this thread who ruin it for others who genuinely appreciate help and who have the common sense to recognise it.

Why do I care about "true leverage"...? How does knowing this term do anything for me? Nobody has answered that question?

pipmutt, I only bring you out of my iggy bin from time to time for the entertainment value your posts provide. Go ahead, say something else mildly corrosive.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #342
  • Aug 29, 2010 2:54pm Aug 29, 2010 2:54pm
How does this actual/real leverage matter in regard to the margin leverage 'brokers talk about when marketing their platforms? I thought people were happy with just saying what percentage of their account they used in their trades.
  • #343
  • Aug 29, 2010 2:54pm Aug 29, 2010 2:54pm
Quoting Forexia

Personally, taking up trading is the perfect profession for me
I beg to differ. From what you've posted in this thread you certainly don't appear to have some of the most basic prerequisite skills.

I'm sure that won't stop you and thousands of other like you from trying though! No wonder the failure stats are so high.....
  • #344
  • Aug 29, 2010 2:56pm Aug 29, 2010 2:56pm
Quoting ecTrade
So, .01 mini lots is a $100 position then? ... and 1:1 in a $100 account? Okay so, then in my case I need to figure out the accumulated lot size (when grid trading) versus a single trade.
Yes you do.
  • #345
  • Aug 29, 2010 3:14pm Aug 29, 2010 3:14pm
Quoting luckylady
Yes you do.
Okay, at that rate 10:1 won't get me very far, not if I'm trying to manage more than one trade at a time. In which case I think 100:1 leverage is just about right, if I want my EA to operate successfully.
  • #346
  • Aug 29, 2010 3:24pm Aug 29, 2010 3:24pm
Quoting The Fool
Why do I care about "true leverage"...? How does knowing this term do anything for me? Nobody has answered that question?

pipmutt, I only bring you out of my iggy bin from time to time for the entertainment value your posts provide. Go ahead, say something else mildly corrosive.
I thought so. No answer.

Let the record show that I succeeded in putting a sock in pipmutt's piehole. No mean feat.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #347
  • Edited 4:10pm Aug 29, 2010 3:43pm | Edited 4:10pm
Quoting The Fool
I didn't ask you for help and I don't need you. So, if you don't want to post again, ever, that's fine, I will not notice.
Quoting The Fool
pipmutt, I only bring you out of my iggy bin from time to time for the entertainment value
Quoting The Fool
How does knowing this term do anything for me? Nobody has answered that question?
Quoting The Fool

I thought so. No answer.

lol, well with an attitude like that what did you expect, people to jump at the opportunity of offering you help and advice?

Too funny......


http://i37.tinypic.com/95mv7s.jpg
  • #348
  • Aug 29, 2010 3:57pm Aug 29, 2010 3:57pm
Quoting billflet
I didn't offer any help to you. I answered EC's question and addressed it to EC. You chose to get sarcastic and imply that the information was suspect because I was, "after all, a guy on the internet."

Good Day
Hey, not that I'm trying to take sides ... but thanks.
  • #349
  • Aug 29, 2010 4:32pm Aug 29, 2010 4:32pm
Quoting pipmutt
lol, well with an attitude like that what did you expect, people to jump at the opportunity of offering you help and advice?

Too funny......

Still no answer. What will knowledge of somebody's definition of "true-leverage" do for me - how will it help me make money trading? You can not say. I have never asked for help and advice and I don't need it. I can get everything I need by just trading the markets. Some people trade the markets, some trade the forums. Anybody can see where pipmutt's interest lies.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #350
  • Edited 7:01pm Aug 29, 2010 5:14pm | Edited 7:01pm
Quoting pipmutt
I beg to differ. From what you've posted in this thread you certainly don't appear to have some of the most basic prerequisite skills.

I'm sure that won't stop you and thousands of other like you from trying though! No wonder the failure stats are so high.....
Well, I am NOT failing. That's the difference. You assume that if people do not trade like you, they must be failing and that is not correct.

Anyway, you still didn't answer my question: how does the seemingly risk-based leverage relate to the margin-based leverage that the government is trying to limit which is really the topic of discussion here.

But that's ok, I knew you wouldn't. But I hope that question and the calculation that I made you go through made you realize that you are arguing about a totally different concept of "leverage" which is really "risk" and has little to do with margin-based leverage that determines one's ability to trade (which is what concerns many people) which is what we are discussing here.

I believe my discussion with you is concluded. Setting you on "Ignore" now as I promised.
Make your losses in demo. Earn your profits live.
  • #351
  • Edited 6:56pm Aug 29, 2010 5:16pm | Edited 6:56pm
Quoting billflet
I have to take a little bit of everyone’s side here. First off, I don’t like to see the government involved in anything more than it is already, but significant changes in retail Forex are bound to come. Not too many people know anything about Forex whatsoever. But a lot of people have a vague idea about the definition of leverage and to the non-participant leverage usually conjures up notions of risk. This makes Forex with up to 1000:1 margin accounts an easy target. So there’s that.

And, on top of that, the majority of us get...
Bill, I think your post raised a lot of good and valid points that I do agree with. But the Real solution to seemingly the biggest issues that the government is trying to resolve in Retail Forex industry, high failure rate of traders and stability of the industry is really Education and not really a blanket reduction especially on many basic aspects of trading, such as leverage and the different concepts of it.

Retail trading is not going to disappear overnight with the passing of this 10:1 leverage rate if it passes, although if CFTC doesn't publish the rules by Oct. 19, 2010, it certainly is going to in the US. But one thing is that there shouldn't be any minimum financial requirements besides a market-determined one in any financial industry especially not a government-set one whether via an initial deposit amount or a set leverage rate because it is not only anti-competitive (which is illegal), not fair but also it's not going to work.

People are very fast in overcoming and circumventing any arbitrarily set requirements whether it's market-determined or government-set. The existence of Retail Forex industry itself is the proof. The reason why Retail Forex industry existed in the first place was because the Interbank Spot Forex market was forbidden for small investors who have limited dispensible capital to invest. The Spot Forex trading was reserved for the "Big Players" with huge start-up capital and credentials. Well no more, Retail Forex brokers stepped in (for their own profit in turn) and provided a market for the small investors via high leverage. So now, as long as you know how to trade Forex and trade well, as long as you can come up with some capital to invest, you can make a living trading Forex just like George Soros granted not as spectacular as his. Small investors, if they really want to, they can still trade in Spot Forex at 100:1 leverage if 10:1 leverage law passes, it might have just become even more risky and more dangerous.

So if passing this 10:1 leverage rule is really for protecting small investors by deterring them, just the act of passing this law just defeated its own purpose. That's why I believe it's Education that matters. If you really want to help out the small investors beforehand to make sure they don't become "reckless gamblers" or get "suckered in" again and again because of lack of knowledge. Teach them to trade Forex properly. Help them understand the proper risk management with leverage. Just because they have "carefully saved up capital" and is "dedicated to trading" doesn't mean they are necessarily educated enough to not exhibit "reckloess gamblers" behaviour and fail.

The only people who do get hurt are the people who do know how to use high leverage properly and are seeing their profit erode because of this reduction of leverage rate as illustrated by numerous posts in this discussion. And that is not fair.

For the protection of fund, this is a given. Although the entry of traditional banks is a welcome sign but Retail Forex brokers should be regulated regardless to ensure that they are not "black holes" for customer funds and this doesn't have to be achieved by this blanket reduction of leverage rate.

So all in all, yes, unfortunately the government is opting for an "easy sell", band-aid solution instead of coming up with more effective solutions to solve some real issues which is what we pay our tax dollars to them to do. And we might not be able to stop them when they do. But I just hope the government realizes that if their laws are always arbitrary and unreasonable, people will find a way to circumvent and come up with innovative ways to avoid them to set things to what they were supposed to be in absence of those laws. And what they are doing will be meaningless and will only create collateral damage.

Many of the innovative services products in the financial market that we see today are actually responses to arbitrary rules. Remember, problems create solutions. And solutions create opportunities!
Make your losses in demo. Earn your profits live.
  • #352
  • Aug 29, 2010 6:00pm Aug 29, 2010 6:00pm
Quoting sonicpunk32
How does this actual/real leverage matter in regard to the margin leverage 'brokers talk about when marketing their platforms? I thought people were happy with just saying what percentage of their account they used in their trades.
Because if someone doesn't know how to calculate the leverage they're using now, they won't know how the proposed change will affect them, or if it will affect their trading at all. Fool calculated his correctly and came up with 20:1. He knows that 10:1 would affect his trading. Someone else might be trading at 3:1. That person wouldn't be affected. Fool's example showed that he can control his risk at 20:1 because he uses a tight stop. There are people who scalp with tight stops (FXRichard) and make it work.

Right now people are coming up with formulas and interchanging real-leverage with account leverage with risk. The three terms have different meanings and interchanging them willy-nilly invalidates the formulas. Apples and oranges.

But I know what you're saying. You don't need to know the definitions in order to determine risk. Amount risked is simply a percentage of account balance.
  • #353
  • Aug 29, 2010 6:01pm Aug 29, 2010 6:01pm
Quoting Forexia

You assume that if people do not trade like you, they must be failing
On the contrary, I've always maintained that no-one has the monopoly on profitable trading strategies, however some elements of trading are universally accepted as being trading 'mantra', one of the most important being control of risk and the inherent dangers associated with overleveraging.

I have no idea whether you're losing or not, and to be honest it really doesn't interest me either way, all I said in response to your belief that trading was the 'perfect profession' for you was "From what you've posted in this thread you certainly don't appear to have some of the most basic prerequisite skills."

One only has to read your posts in this thread to get an idea of your apparent lack of suitability and aptitude for this business.

Quoting Forexia
Anyway, you still didn't answer my question: how does the seemingly risk-based leverage relate to the margin-based leverage that the government is trying to limit which is really the topic of discussion here.

But that's ok, I knew you wouldn't.
lol, well why did you ask then?

As already suggested to TheFool, I suggest you do your own research on the subject because like him you seem to either find fault or misunderstand anything valid in this thread, that's blatantly evident from your replies and questions.

Quoting Forexia
But I hope that question made you realize that you are arguing about a totally different concept of "leverage" which is really "risk" and has little to do with margin-based leverage which is what we are discussing here.
Thanks for giving another clear demonstration of the futility of trying to explain anything to you, for whatever reason you simply don't appear to have the capacity to understand, and the thing is it's really not at all complicated, in fact it's a simple and very basic concept.


Anyway, good luck to you, the only advice I could offer anyone in your situation would be not to invest too heavily in this or any other market or trading endeavour!

Fortunately I'm on your ignore list apparently so I'll be spared your response to this post, however that doesn't prevent me from commenting on your posts and pointing out to readers the blatant errors and misguided thinking therein.
  • #354
  • Aug 29, 2010 6:16pm Aug 29, 2010 6:16pm
Quoting Forexia

Teach them to trade Forex properly. Help them understand the proper risk management with leverage.
Most mainstream brökers already offer some very comprehensive free advice and competitively-priced training courses for people wanting to learn the business. Every regulated bröker publishes risk warnings on their website. Both of these have existed for years so it doesn't appear they're the solution!

The problem is an awful lot of participants simply don't have the capacity to learn, perhaps that's how they ended up trying their hand at forex in the first place, a last resort before applying for food stamps!

Unfortunately you can only lead a horse to water, something clearly demonstrated in this thread!
  • #355
  • Edited 7:07pm Aug 29, 2010 6:52pm | Edited 7:07pm
Quoting billflet
Because if someone doesn't know how to calculate the leverage they're using now, they won't know how the proposed change will affect them, or if it will affect their trading at all. Fool calculated his correctly and came up with 20:1. He knows that 10:1 would affect his trading. Someone else might be trading at 3:1. That person wouldn't be affected. Fool's example showed that he can control his risk at 20:1 because he uses a tight stop. There are people who scalp with tight stops (FXRichard) and make it work.

Right now people are coming up with...
This is EXACTLY the reason why I believe proposal for some sort of mandatory education is needed for Retail Forex trading industry and actually not just for Retail Forex industry but for any trading involving high leverage. So for any traders starting out, they will understand how to calculate leverage and what happens to their account balance under different market scenarios, when the position is in-the-money and when the money is out-of-money at different leverage rates, their own and the one allowed by their brokers. And in turn people will be able to come up with a trading plan that can take full advantage of the leverage that their brokers offer to achieve their profitability within the risk they can handle.

Just making them read the "Risk-Disclosure Statement" that most of the brokers put in faint tiny font at the bottom or obsecure places on their webpage is not enough. The wording in the statement is not even clear.
Make your losses in demo. Earn your profits live.
  • #356
  • Aug 29, 2010 7:10pm Aug 29, 2010 7:10pm
Quoting billflet
Fool calculated his correctly and came up with 20:1. He knows that 10:1 would affect his trading. Someone else might be trading at 3:1. That person wouldn't be affected. Fool's example showed that he can control his risk at 20:1 because he uses a tight stop. There are people who scalp with tight stops (FXRichard) and make it work.
Not really. I trade on margin. Margin is set at 50:1. I don't need multiple ways to talk about the same thing - I don't need a definition for "true leverage" if it is not useful to me. Its not worth my time. All I need to know is how my margin affects my risk and to trade within risk parameters that I control.

The Eskimos might have 65 different words for "snow" - I've just got "snow" and that's all I need.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #357
  • Aug 29, 2010 7:18pm Aug 29, 2010 7:18pm
Quoting Forexia

This is EXACTLY the reason why I believe proposal for some sort of mandatory education is needed for Retail Forex trading industry and actually not just for Retail Forex industry but for any trading involving high leverage.
That's an impractical suggestion, impossible to police, and certainly not cost effective for any regulatory body to oversee.

Quoting Forexia

So for any traders starting out, they will understand how to calculate leverage and what happens to their account balance under different market scenarios, when the position is in-the-money and when the money is out-of-money at different leverage rates, their own and the one allowed by their brokers.
All freely available, and more.

Webinars, seminars, tutorials, risk warnings, practice accounts, micro accounts etc etc etc, brokers are going out of their way to try and educate people.

There's no way to legislate against stupidity, a fool and his money are easily parted, period.
  • #358
  • Aug 29, 2010 7:35pm Aug 29, 2010 7:35pm
Quoting The Fool

I don't need a definition for "true leverage" if it is not useful to me. Its not worth my time. All I need to know is how my margin affects my risk and to trade within risk parameters that I control.
Quoting billflet

Because if someone doesn't know how to calculate the leverage they're using now, they won't know how the proposed change will affect them, or if it will affect their trading at all.


Seems to me most of the people whinging don't seem to know what they're whinging about!

-
  • #359
  • Aug 29, 2010 7:42pm Aug 29, 2010 7:42pm
Quoting pipmutt
Seems to me most of the people whinging don't seem to know what they're whinging about!

-
mutt if you can get it posted in the next minute before I put you back in the bin, I'll give you the last word

..nope. too late.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #360
  • Edited 8:55pm Aug 29, 2010 8:41pm | Edited 8:55pm
Quoting pipmutt
Seems to me most of the people whinging don't seem to know what they're whinging about!

-
Oh well, I see I will probably need to maintain at least five times as much money in my account to trade the way I am currently ... in a U.S. account, if I'm not allowed to maintain an account overseas. This is what I'm complaining about.

Yet at the same time I now realize it could probably be done. I just can't expect to see the high returns I was looking forward to ... not without the additional capital required. Oh, there's also no hedging allowed in the U.S. either, including all this FIFO nonsense which was added, and that sucks too.
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