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What will US citizens do now with 50:1 leverage?

  • #41
  • Sep 30, 2010 10:39am Sep 30, 2010 10:39am
Quoting buddhi
does not seem right that us traders can only trade global markets from inside us-based brokers and banks. seems like a new windfall for us banks and brokers.
Bingo! The US futures industry lobbied hard for these rules, as they want the money back in their playground.
  • #42
  • Sep 30, 2010 2:04pm Sep 30, 2010 2:04pm
Quoting nkh
If I were american, I will move the account to UK or other country.
i would say fxopen is a good choice frankly.
  • #43
  • Sep 30, 2010 10:22pm Sep 30, 2010 10:22pm
I am currently using alpari uk.
  • #44
  • Oct 1, 2010 1:33am Oct 1, 2010 1:33am
although i don't trade with cftc brokers (and haven't since the FIFO rules...I knew more would come!) i believe this:

i think that they should give a mandatory course on leverage and money management instead of trying to lower it. that way, if you don't pass the test on how to trade, then you cannot open an account. that's the traders fault for not learning the basics of forex and instead they buy into these stupid scalping EA's and expensive ass courses and seminars that promise them the sun moon and stars. let the fool depart with his money! they have to save themselves!
  • #45
  • Oct 1, 2010 9:48pm Oct 1, 2010 9:48pm
I'm looking for a good broker, one that is not going to rip me off and try to keep my money. I was thinking the US regulated brokers, but since these new rules I will have to reconsider.

I think the whole idea is not to make it attractive to people, since it is a fairly huge market, especially compared to the futures market.

I still don't get why a futures regulatory body "regulates" the currency market.
  • #46
  • Oct 2, 2010 2:33am Oct 2, 2010 2:33am
Quoting cica515
GoMarkets is still accepting US clients, however, they have posted this notice on their account opening page:

"Applicants from outside Australia, especially the United States of America must check their local laws and regulations before applying for an account with GO Markets"
It doesn't look good. I opened an account with them a about two months ago and I'm wondering when I'll be getting the boot? It almost sounds like a 180 degree reversal from a month ago, when they said they were under no jurisdiction of the CFTC.
  • #47
  • Oct 2, 2010 3:58pm Oct 2, 2010 3:58pm
I use 1:100 at the moment with plenty of leeway in my margin so 1:50 wouldn't bother me one bit.
  • #48
  • Oct 2, 2010 6:43pm Oct 2, 2010 6:43pm
Then you obviously suck at math. They just halved your buying power. Tell you what, I'll give you $50 back for every $100 you give me. Does that sound like a good deal to you also?


Quoting oakmonster
I use 1:100 at the moment with plenty of leeway in my margin so 1:50 wouldn't bother me one bit.
  • #49
  • Oct 2, 2010 8:34pm Oct 2, 2010 8:34pm
Quote
Then you obviously suck at math. They just halved your buying power. Tell you what, I'll give you $50 back for every $100 you give me. Does that sound like a good deal to you also?

I think oakmonster is just saying that s/he doesn't over leverage as it is, so that putting in twice the margin won't effect him/her. Sure, the buying power is halved, but when you only use a small fraction of your buying power, doubling it makes no difference. Or to put it another way - since they are careful with their trades and don't get margin calls, their margin comes back to them anyway. $0 *2 = 0. The math is good!

That said, I'm po'd at the CFTC. I wrote a letter of opposition to them months ago for all the good it did. I was okay with the reduction from 400:1 to 100:1, since 100:1 is accepted practice. 50:1 makes me upset - solely because it restricts my choices. Also, did you guys notice that Japan has been leading the way? They dropped to 50:1 some time ago. They will drop from 50:1 to 25:1 at some point next year. That may be our next destination as well.

Question for those trading with foreign brokers - you have to keep your money in the currency of that country, correct? If so, has that affected your decisions on when to withdraw money? Just curious, thanks!
  • #50
  • Oct 2, 2010 9:08pm Oct 2, 2010 9:08pm
Quoting JustThePips
Question for those trading with foreign brokers - you have to keep your money in the currency of that country, correct? If so, has that affected your decisions on when to withdraw money? Just curious, thanks!
GoMarkets of Australia accepts deposits in USD, AUD, DBP, EUR and NZD (and they remain in that denomination). My GoMarkets account is in USD, and I'll be withdrawing in USD when I close my account.

MIG Bank of Switzerland has this FAQ statement: "... you can choose to have your account denominated in USD, EUR, GBP, JPY, CHF, AUD or CAD."

Just a couple of examples.
  • #51
  • Edited 5:52am Oct 3, 2010 5:40am | Edited 5:52am
Quoting oakmonster
I use 1:100 at the moment with plenty of leeway in my margin so 1:50 wouldn't bother me one bit.
Its not about whether you personally need the leverage or not, its about the freedom taken away from you and others.

If you wait until it affects you personally it might be already too late. By this time they might already have built a 4m tall fence around your city and not allow you to leave the house at night and you only started to notice it because they changed the time that defines when the night begins.

I personally would be bothered immediately, even if I haven't left the city for over a year now and also have no pressing need to leave the house at night.

Its alarming that there are so many people who aren't bothered about their rights taken away from them. Do they even know what freedom is? Do they even deserve any freedom at all if they claim they could easily live without it?

You can use every history book if you want to know to where this kind of attitude always ultimately leads. And it looks like the next history lesson for many of you will soon begin. For those who are not sleeping it has already begun and the rest will wake up soon. I am not exaggerating!
  • #52
  • Oct 3, 2010 10:06am Oct 3, 2010 10:06am
In Germany they first came for the Communists,
and I didn't speak up because I wasn't a Communist.

Then they came for the Jews,
and I didn't speak up because I wasn't a Jew.

Then they came for the trade unionists,
and I didn't speak up because I wasn't a trade unionist.

Then they came for the Catholics,
and I didn't speak up because I was a Protestant.

Then they came for me —
and by that time no one was left to speak up.

Martin Niemöller
  • #53
  • Oct 3, 2010 10:12am Oct 3, 2010 10:12am
I am a US citizen and lived here all my life in the US. The US Gov is trying to grab as much power from the people as possible, it's really easy to see, those that do not then boy will they be surprised. Those that can will work around anything the US gov throws at them, there is always a work around. Some are glad that others cannot use bigger leverages but those same people do not believe in the freedoms many of us do. Very silly what they have done in the name of protection, only thing that the gov protects is the machine they run. Not every overseas broker will fall to the US and go their way, so we have plenty to go around. Leverage is not going away it's just being limited for the drones, the masses that will follow. If an investors looses all their money with 100:1 leverage then they are going to do the same with 50:1, whats next restrict them from opening accounts. It's all backwards and upside down, don't be fooled.

Quoting 7bit
Its not about whether you personally need the leverage or not, its about the freedom taken away from you and others.

If you wait until it affects you personally it might be already too late. By this time they might already have built a 4m tall fence around your city and not allow you to leave the house at night and you only started to notice it because they changed the time that defines when the night begins.

I personally would be bothered immediately, even if I haven't left the city for over a year now and also have no pressing...
  • #54
  • Oct 3, 2010 12:18pm Oct 3, 2010 12:18pm
It's not actually up to you what leverage you should have, as it's the company you trade with which is taking the risk of your account going negative then not paying up, it's the company your dealing with, if there prepared to risk letting you trade at 1000:1 they should be allowed to.

To get a negative account, I'd have to be near my margin limit then take a instant move against me of @80pips or more this is at 1:200 so you'd need 320pips approx at 50:1 which is just not going to happen.

It's like MM, it stops you making money fast or losing it fast nothing more.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #55
  • Oct 3, 2010 12:54pm Oct 3, 2010 12:54pm
Quoting Turveyd
It's not actually up to you what leverage you should have,...
Well said Turveyd!

With 50:1 it will take a lot more to margin call a trader.

I see 50:1 as MM tool. So use it appropriately for whats it worth.
  • #56
  • Oct 3, 2010 2:59pm Oct 3, 2010 2:59pm
Less leverage is always better. Small market coughs can kill you at 100:1 +
  • #57
  • Oct 3, 2010 4:27pm Oct 3, 2010 4:27pm
The offer still stands to all of you that think getting your buying power halved is a good thing.

I'll still give all of you $50 for every $100 you give me.

What's the hold up?
  • #58
  • Oct 3, 2010 4:30pm Oct 3, 2010 4:30pm
Wise words. Respect.
Quoting Dopey
In Germany they first came for the Communists,
and I didn't speak up because I wasn't a Communist.

Then they came for the Jews,
and I didn't speak up because I wasn't a Jew.

Then they came for the trade unionists,
and I didn't speak up because I wasn't a trade unionist.

Then they came for the Catholics,
and I didn't speak up because I was a Protestant.

Then they came for me —
and by that time no one was left to speak up.

Martin Niemöller
  • #59
  • Oct 3, 2010 7:17pm Oct 3, 2010 7:17pm
Quoting craignorton
Less leverage is always better. Small market coughs can kill you at 100:1 +
Ok, let's extend that logic. How about zero leverage for the average FX Retail trader with an account balance less than $5,000. Will that work?

In fact, if that logic works for you, then lets take the experiment a bit further, shall we. Let's declare right now the industry standard concept of Reverse Leverage. That's right, from now on, each pip that nets in your favor, results in an decrease of leverage. So, for your really successful trades, you will end up having negative leverage applied to your real-time account balance. Will that work, too?

I'm being hilariously facetious on purpose, here.

The idea that high leverage is inherently a bad idea for a small Retail FX account balances, is just as illogical as having negative leverage applied to your most successful trades.

Leverage is not the problem. The problem is the lack of skill required to trade this particular market and the unwillingness of most Retail traders to prepare themselves to become proficient at trading this market. Because of the speed of this market, it fits the definition of an advanced market to trade.

I've traded other market before and I've see fast moving prices, but this market can be lightening quick at times and that is unsettling to the FX Newbie. This market has a dual nature, in that it is both a Fundamental market as well as a highly Technical market. So, both the knowledgeable Fundamentalist and the knowledgeable Technologist, do well in FX - but not until they've learned to handle the speed of the market. What augments the 'sense of speed' are those periods in the market when volatility is extremely low and the market is barely moving.

Both leverage and hedging are indispensable tools for the currency trader, and it is both of those things that the government is trying to take away. The appropriate use of high leverage, can save an otherwise poor trade - to the point of break-even, or a small profit on what would otherwise have been an almost certain loss.

The issue, therefore, is knowledge. And, knowledge about this market is power. You either have that knowledge, are in the process of acquiring that knowledge, or you don't possess the knowledge, but make no mistake about it, the entire game is centered around knowledge. This is not a turkey shoot competition, nor is this random roulette. The FX market has structure and therefore contains a degree of probabilistic margin that can be tapped for profit on a consistent basis. But, not without knowledge.

Thus, the 'high leverage is always bad' discussion is a nonsequitur red herring based on myth and a lack of knowledge. However, what the government is attempting to do, is based on arrogance and the all too common, power drunk malformed attitudes in Washington.
  • #60
  • Oct 3, 2010 10:47pm Oct 3, 2010 10:47pm
Quoting cica515
GoMarkets of Australia accepts deposits in USD, AUD, DBP, EUR and NZD (and they remain in that denomination). My GoMarkets account is in USD, and I'll be withdrawing in USD when I close my account.

MIG Bank of Switzerland has this FAQ statement: "... you can choose to have your account denominated in USD, EUR, GBP, JPY, CHF, AUD or CAD."

Just a couple of examples.

Thanks cica. While I'm not actually thinking of switching to a foreign account at the moment (if it is even allowed), I always like to know my options.
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