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Thoughts on 50:1 Leverage

  • #101
  • Sep 3, 2010 11:41am Sep 3, 2010 11:41am
lol yes... you are correct damage. This forum would be less clustered with good humor. I look around here from time to time and it surely is sad. There are a few (very few) people here that I actually learned something from, the rest is just... funny to say the least. It's either newbies dreaming of a get rich quick automated system or simple indicator filled mechanical system who have no idea what they are messing with, and then the scammers fooling these poor bastards. oh well...


Oh yea... the "save us from ourselves" thing is quite ridiculous... they don't give a shit about you or me I am sure.
  • #102
  • Sep 3, 2010 12:01pm Sep 3, 2010 12:01pm
Quoting Monroe
Fair enough moneymaker2. I agree... it is kind of messed up what is going on, mostly the part about not being able to go offshore... thats what I really don't like, but I guess they had to do that as brokers wouldn't go out of business here in the states. And btw, is that surely a fact? We cannot use European brokers for sure??
Talking with GFT this morning, they feel that it is inevitable, but that it is not written in stone when it will occur. The discussion of US Brokers by the CFTC Q&A paper may just mean that if you go outside the US you won't be offered any protection under the CFTC?...no one seems to really know. I don't see how the US can dictate what brokers in other contries do, but stranger things have happened.

Though I have enjoyed the debate on this subject, we traders should probably be using the forums as think-tanks to help each other develop methods or refine strategies rather than debate whether someting that is going to happen is fair or not, since there is very little added value in that. I have always thought that with everyone having the same goal (to make money) there was very little brainstorming going on. Maybe if we did more of that, everyone would have more capital to put in their accounts so available leverage will soon be of minimal consequence...
  • #103
  • Sep 3, 2010 12:08pm Sep 3, 2010 12:08pm
That's strange. I agree, I just don't think that we have much say on these laws, so it is what it is, and I think 50:1 is not so bad. Me personally, I don't use more then 40:1 which I consider high leverage, so this is not really effecting me at this point. We'll see how it plays out...

Happy trading.
  • #104
  • Sep 4, 2010 1:33am Sep 4, 2010 1:33am
Quoting moneymaker2

....the autopsy report has came back on the horse and majority of the beating marks have been confirmed to be post-mortum.
lol, quote of the thread!


Interesting balanced debate, and so civil, that's a rarity around here lately! I thought brucewhain made some interesting points as well which went unreplied, an oversight I'm sure.



lol@Monroe, 'pikers', that's a word I've not heard for a while, very apt!


Good trading all!

-
  • #105
  • Sep 5, 2010 2:18am Sep 5, 2010 2:18am
Quoting pipmutt

lol@Monroe, 'pikers', that's a word I've not heard for a while, very apt!
lol, I thought so myself.
  • #106
  • Sep 5, 2010 7:30am Sep 5, 2010 7:30am
Quoting moneymaker2
Talking with GFT this morning, they feel that it is inevitable, but that it is not written in stone when it will occur. The discussion of US Brokers by the CFTC Q&A paper may just mean that if you go outside the US you won't be offered any protection under the CFTC?...no one seems to really know. I don't see how the US can dictate what brokers in other contries do, but stranger things have happened.

Though I have enjoyed the debate on this subject, we traders should probably be using the forums as think-tanks to help each other develop methods...
I don't think they're going to try to dictate what brokers in other countries do. I do think they'll try to dictate what a US. citizen can do in another country.
  • #107
  • Sep 5, 2010 8:00am Sep 5, 2010 8:00am
It is very funny. I don't understand how a 10:1 leverage can protect you better than a 1000:1 leverage. if a person is so foolish not to know his risk then he/she should not be trading at all. Higher leverage is only additional freedom offered to the trader (America stands for Freedom, doesn't it), and this freedom should not have been taken away by the US while others are offering it.
  • #108
  • Sep 5, 2010 4:08pm Sep 5, 2010 4:08pm
Quoting pipmutt

I'm interested to know how you guys use your 400:1 leverage and still keep within sensible risk parameters!
Simple, Trading Forex requires you have set of rules to protect you.

With forecx trading there are always variables that you must take into account.

400:1, 10,000:1 is nothing more than a variable. plug it into your overall equation and do the math.

I think just the numbers alone, 400:1, scare some here while others who have been using high leverage plug it into their equation and keep it moving.

These regs arent stopping anyone from losing money, gullible or otherwise.
  • #109
  • Sep 5, 2010 4:20pm Sep 5, 2010 4:20pm
Quoting moneymaker2
I never understood why, if a trader is confident in his/her trading ability, they would NOT want to use the highest leverage possible? The amount of leverage doesn't make you a good or bad trader
nuff said
  • #110
  • Sep 5, 2010 4:26pm Sep 5, 2010 4:26pm
Quoting moneymaker2
I have thought about it and agree....lowering the leverage WILL stop people from losing money in currency trading. With max leverage being cut in half, that means there will be twice as many people making extra income from trading, and that is great news! I was a fool to think that I should be allowed to choose what is best for me when there are so many others more qualified to determine what I should be doing for my own good. My paradigm has been recalibrated, so please accept my apology for being arrogant like that.

I was...
LOL!!! well said
  • #111
  • Sep 5, 2010 4:34pm Sep 5, 2010 4:34pm
Quoting Monroe
Moneymaker2, I am not name calling... look up what it means, wasn't meant to hurt anyone's feelings.

I hear your argument, but... the ridiculous amount of leverage is unnecessary. I don't think anyone should complain about there choices being taken away, as it was never there choice to begin with how much leverage they receive. It wasn't that long ago when your right to trade forex as a small fish was even possible.
If you think that then going to 1:1 leverage is ok right?


Once the final rule is in place:

To trade forex one must obtain a forex trading license($100k/year) and maintain a $250k accouunt minumum, will you still be ok...probably, since it will take it back to place you mentioned.

" your right to trade forex as a small fish was even possible"
  • #112
  • Sep 5, 2010 4:56pm Sep 5, 2010 4:56pm
Quoting akirax
These regs arent stopping anyone from losing money, gullible or otherwise.
A key ingredient of skill, besides the ability to earn lots of pips consistently, is to do so with as little risk, i.e. number of pips of in-trade drawdown, as possible.
Also, skill level limits one's freedom (which makes more money) and gullibility (which loses more money); this cancels the two ideas, if one ignores their proportion.

Inferred from below, most traders' skill can only deal with 50:1 or less:
Quoting jleblang
Only a small percentage of accounts typically trade at leverage above 50:1, so we do not feel as if this is restrictive at all to the majority of our traders.
  • #113
  • Sep 5, 2010 5:12pm Sep 5, 2010 5:12pm
For what it's worth, I don't use more than 10-15% leverage and I'm just fine, but I don't want anyone telling me that they're trying to protect me from myself. If I want to blow my account or take that chance then let me!

It's like telling someone at the blackjack table that they can't gamble anymore than 10% of their gross income. It's just plain ole silly.
  • #114
  • Sep 5, 2010 11:34pm Sep 5, 2010 11:34pm
Quoting akirax
If you think that then going to 1:1 leverage is ok right?


Once the final rule is in place:

To trade forex one must obtain a forex trading license($100k/year) and maintain a $250k accouunt minumum, will you still be ok...probably, since it will take it back to place you mentioned.

" your right to trade forex as a small fish was even possible"
For the record, as I think I have mentioned, I really don't like what they are doing, but it some way I think it's good, unfair as it is, for US citizens like myself. I was really just saying that 50:1 leverage is perfectly fine.

However... I am not worried one bit if it goes back to "that" place, as there are other markets to trade. As for me, I will be trading stocks once I have enough money, no matter how much leverage this market offers. I am thankful to forex as the stepping stone into that, but it does look like it's coming to an end.... sad.
  • #115
  • Sep 6, 2010 12:25am Sep 6, 2010 12:25am
Quoting Monroe

However... I am not worried one bit if it goes back to "that" place, as there are other markets to trade. As for me, I will be trading stocks once I have enough money, no matter how much leverage this market offers. I am thankful to forex as the stepping stone into that, but it does look like it's coming to an end.... sad.
Hi Monroe

I thought you was really very successful at scalping forex. Is there any reason to retire from it?
  • #116
  • Sep 6, 2010 12:31am Sep 6, 2010 12:31am
Does anyone know which currency pairs will be allowed to trade at 50:1 ??

Please tell me it's not just eur/usd, gbp/usd, usd/chf and usd/yen.
  • #117
  • Sep 6, 2010 12:32am Sep 6, 2010 12:32am
Quoting Price
Does anyone know which currency pairs will be allowed to trade at 50:1 ??

Please tell me it's not just eur/usd, gbp/usd, usd/chf and usd/yen.
Not sure yet. According to the "Final Rules" document, it looks like it's NFA who's decide on it. My guess is that it's going to include all the majors plus the major crosses like "EUR/GBP" and "EUR/JPY" and etc.
Make your losses in demo. Earn your profits live.
  • #118
  • Sep 6, 2010 12:36am Sep 6, 2010 12:36am
Quoting akirax


400:1, 10,000:1 is nothing more than a variable. plug it into your overall equation and do the math.
I see. Can you give an example of how you 'plug it into your overall equation and do the math'?
  • #119
  • Sep 6, 2010 1:41am Sep 6, 2010 1:41am
Quoting Banker
Hi Monroe

I thought you was really very successful at scalping forex. Is there any reason to retire from it?
I wouldn't say I am successful just yet, I can't retire at this point.
  • #120
  • Sep 6, 2010 1:43am Sep 6, 2010 1:43am
Quoting pipmutt
I see. Can you give an example of how you 'plug it into your overall equation and do the math'?
lol, yes I would like to see this equation as well...
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