Thoughts on 50:1 Leverage

For Some reason the orginal thread was moved to the members lounge. Which is inappropriate for this issue. The contention of this thread is to not only make members, but also traders, and not just forex traders but American citizens aware of the loss of freedom and what they can do to protect that freedom. This is Forex related as many retail Forex traders will no longer be allowed to trade and some have lost their ability to be profitable as well. In addition this thread relates to the Forex Industry and how they are incompetently governed by an entity that ignores the people and even specifically those directly associated with its decrees. We Call for the immediate removal of Mr. Gensler of the CFTC

In order to send a strong and resounding message that our government was established and formed for the people in order to send a strong and clear message that the people of the United States will no longer tolerate unnecessary abuse and unwarranted removal of our personal freedoms we must ask for the removal of Mr. Gensler and the Removal of the absurd decree by the CFTC limiting leverage to 1:50 on majors and 1:20 on minors respectively.

My argument is not even whether 1:50 leverage or 1:400 or 1:100 leverage is sufficient. It is the freedoms that they continue to claw away and boldly assert that they do it in the best interest of the American people. How incredibly psychotic, to assert that you, the American individual are so stupid that the government needs to step in between you and your broker in a free trade environment and place rules on the amount of money you can receive and essentially raising margin requirements in order "to protect you" and allow the rich to stay rich and the poor stay poor.

I will not even go into the fact that leverage is not at all proportional to the amount of money that you choose to risk depending on your trading strategy it just means higher margin requirements and and more frequent margin calls contributing to more losses. I won't even go into the fact that this will make U.S. Forex almost completely uncompetitive except that U.S. citizens sometimes get a hassle when trying to open an account in the U.K. with a regulated entity. I won't even go into the fact that they already just limited leverage from 400:1 to 100:1 a couple years ago and now they are at 1:50 and 1:20 ignoring all of your comments and failing the American public again to "protect you" and this is just a warm up act to get you ready for 1:10 leverage. I won't even go into the fact that I actually do hear from alot of rich people that the Forex leverage was to high and it annoys them that anyone can get started in that market and that 100:1 is absurd and undercapitalized people should not be trading Forex anyways. I won't even go into the fact that the rest of the world is watching how we the U.S. deal with this situation and will most likely decrease leverage and act in a similar fashion.

Imagine that you are in the marketplace and a business associate offers to advance you money for your small business. Next you are denied the money because the government deems this business venture unsafe because "they want to protect you" and your too stupid to know what to do with the money. That's what is around the corner if we don't take a stand. More meddling by the government in the free market in the name of "protecting you" because your stupid. This government controlling ideology that you the consumer are incredibly stupid and do not deserve to be allowed to make a decision on your own is spilling over into many other sectors as well. But they are continuing to attack your money. Just as there will probably be more government programs in the future to seize a portion of your money "to protect you" because your too stupid to know what to do with it.


My point is this is America. Whether 100:1 or 1:50 or 1:400 appropriate you should be allowed to choose. Mr. Gensler and CFTC just ignored your comments, pleading, and financial circumstances and stole another of your freedoms "to protect you" because your stupid. What are you going to do about it. I just called the CFTC to ask them straightforward how to have him removed and the statute repealed. They answered that they could not tell me that but that he was appointed by the President.

Conclusion:

1. We need to bring this problem to your senator asking for Mr. Gensler's immediate removal and repeal of this law.
2. We need to find a way to communicate this publicly to the President.
3. We need to get this circulating in the media because frankly the Americans that don't trade Forex don't care about it until there number gets called and the government starts enacting a new rule that relates to them that steals their freedoms "to protect them" because they are stupid. It is easy for them to say no or ignore us when there is no fear of losing their job or worrying about answering to someone. The CFTC is supposed to work for us. Our government is supposed to work for us. They should be listening to what we say.
4. We need to get organized and come together and call for Mr. Gensley's removal. We can't have our senators thinking this is just one fanatic writing in. We must make it perfectly clear to our politicians, the President included, that if they ignore us completely and do not look into this matter that they will be losing our votes.
5. Write your representative and ask for Mr. Gensler's immediate removal and repeal of this law here is the link https://writerep.house.gov/writerep/welcome.shtml

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OMG, not again!

What's the plan here, to beat them into submission with the 'terminal boredom' strategy?

lol.....i think i saw this on 4 other threads

maxsmart has a point though....there are maniacs out there that deserve the right to roll the dice with high leverage

Will we ever know the CTFC's true intentions of squeezing retail traders leverage? probably not....Personally, if you are practicing good risk management, you shouldn't need more than 50:1. There are a lot of people out there that were using 400:1 trading a standard lot with a 1k account, then when they blew the account before breakfast, they complained that it was their borker cheating them....my account is always accepting donations from these people

They're my favourite posts, actually, when a noob goes on the cable thread, screaming blue murder about the 13 pip spike that wiped out their account, blaming it - of course - on their broker doing another one of their famous stop hunts! Bastards!

LOL. I was just reading 2 other similar thread. The relationship between all three are as if they were written by the same person.

Off the bat, I'm not a fan of that weasel Gensler a definitely not a fan of the CFTC and their multi-layer cronnies ... the NFA being one of 'em.

Everyone is blaming CFTC/Gensler but not one of these threads discuss placing blame on Obama, Franks, Dodd. CFTC was nothing more than the agency that had to come up with the rule set and was not the agency that pushed this. Franks/Dobb and EVERY congressperson behind them pushed this issue and Obama agree with it and signed it into law.

With it being a law, CFTC has not choice but to look into the matter, full fill their part of the governmental job (oversee financial bills and enforce regulations). I know the deal, CFTC pushed leverage low enough to make Obama/Dodd/Franks happy while looking out for the trader by not pushing leverage to 10:1 as advised in the original proposal. (I know its hard to believe that the CFTC is looking out for us, but thats what I believe and I'm sticking to it in this case). CFTC playing the game of politics and its an ugly game I'm sure they did not want to get in the middle of.

You wanna place blame where it belongs, how about putting Obama/Franks/Dodd/Congress in the hot seat because last I check only 7 congressmen was against this bill from the beginning. The rest of congress supported, backed, and signed off on it.

Haven't we been here before??? All we need is 200 posts from Forexia, saying the same thing again and again, to make it complete.

lol, great stuff

I think Jhig makes some interesting points though and a perspective which I don't think has been mentioned before. Did the CFTC really have any choice, after all they were just doing their job and are the messengers, the people responsible for instigating the message be written are a little higher up the chain of command.

Be careful what you wish for! If you like my posts really that much, I might just assemble all of them and PM them to ya...

I had no idea of the power of my posts that it would make THAT STRONG of impression on you.

BUT it IS CFTC who came up with the specific proposals including that stupid leverage cap. I mean Dodd-Frank just outlined the general spirit of how they want to regulate the financial industry. It's CFTC who came up with the specifics. They could've came up with a whole different set of proposals but still honouring the principles of the Dodd-Frank Bill, but they didn't.

Nice comeback, Sir!

The original intention of this thread I believe, was not to discuss the appropriate leverage or necessarily the one, single person who is responsible for the decision.


It doesn't matter what leverage you or I feel is appropriate. It doesn't matter whether it's 50:1, 10:1, 2:1, 200:1 or 10,000:1


It's about FREEDOM OF CHOICE and whether or not you are tired of the government leading you around like a dog on a leash, even while in the confines of your cage.


Most of us it seems, are apathetic about being on a leash and have grown accustomed to our cage. And every year the cage grows smaller.


I doubt that will ever change, so we live with the food that is thrown to us.

All good points Maxsmart.

It's a limitation of the trader's personal freedom and potential to accumulate wealth from having an edge in the markets.

Personally, any less than 50:1 leverage would start to seriously slow down my performance.

It's starting to become a silly cliché to say that high leverage is the road to ruin. Not it's not! Trading while having a negative expectancy (no edge) is the road to ruin, not leverage. Leverage is just a tool, a very useful one, very much like having the ability to trade high lots. You just have to not be an idiot, do your homework and know how to use such a tool correctly.

This is like reducing the production of knives to "protect us" from homicide, lol. Give me a break.

No, it's more like making the knife blunter to protect us from killing ourselves.

Well, at least this time, when they were trying to make the cage smaller again, we growled, gravelled, begged, yelled, bit, kicked, lunged, shouted, barked, mobilized other cats and dogs, and bared out teeth enough that when they were finally putting the steel rods together, they made the cage bigger than what they originally designed it.

Oh, what is that? Sniff, sniff... That's food! Better get my teeth on it before other dogs...

Is there a choice?

Personally I think we should appreciate the freedoms that we do have instead of lamenting the one's we don't. In the bigger picture is any of this really that significant?

This latest legislation is probably part of just another deal that was signed, sealed, and delivered regardless of minority opinion, although I can't imagine the issue had much leverage (pun intended!).

Good tactics though! Go in low, that way you can always increase your offer and appease the objectors!

To pipmutt:

Yes it is. Every single bit of it.

Even if it was 10:1 I don't know of any other market that offers the same opportunity for someone with only a couple hundred dollars to trade.

That's not the point.

Good point, as I say they need to appreciate the freedoms they do have.

I think the problem is they've been allowed to stay up past their bedtime way too often, they're spoiled.

Without doubt there should have been these types of regulations right from the start, if there had been we wouldn't be having this discussion, people would just be happy to have the opportunity to trade micro accounts with pocket change.

50:1 is still a formidable amount of leveraging power to have. In my opinion if people can't achieve profitability with 50:1 then they probably never will, and increasing leverage isn't going to help.

Mind you having said that, is it better to die by a thousand cuts or be executed quickly? The latter might be kinder!

Please explain to me how you would make any real money with a couple of $100 to trade and 10 to 1 leverage. I seriously doubt it could be done. Lets face it, for the vast majority of these guys that spend endless years testing every "system" on their micro-mini lots, the leverage won't matter. They will never make any money anyways. But for people who trade 10 standard lots and up and know how to Lot leverage and make a few pips a day with great scalping skills, this proposal will definitely limit their income.