Leverage Reduction: First USA now Japan. Who's next?

Have you been living in cave? That window is all but shut. Wake up and smell the reduced leverage and control.

I wouldn't be surprised if that were true.

Still, I hope retail investors show enough dissatisfaction with the new regulation instead of remaining all silent; surely not to reverse the situation, but at least to prevent it from getting worse.

I have a reply I'm formulating, but I thought I should point out, in the meantime, that the author of this bill, gets free private jet time by a firm that received a lot of bailout money.
It doesn't sound as obvious as the fannie mae, freddie mac scandal, or how it's only legal for people who work in congress to do insider trading.

But you get the point. This isn't temporary. There's a new regulation by the day, and none reverse. And if you don't think so, then you're blaming the companies you work with, for, or buy things from for making up the arbitrary rules they are only following. Like the guy who yells at the cashier in the store as though they can look up your account records when his card declines.

But may I ask, how will being dissatisfied with the CFTC effect their decision? Isn't the point to get rid of you? A la, SEC and daytraders who aren't rich causing too much "volatility" and "volume". Things we hear about forex today.

All of these changes be it leverage or what can all be reversed, but not under this administration. It will take a complete change in the make up of congress which is a very strong possibility come November 2. Under the current Obama, Pelosi, Reid & Frank regime YOU the TRADER are not smart enough to know what is best for you......NOT, but that is their view. NOW, what is the real motive? Some of you have already answered that question.



BTW: for you in the U.S.A. voting for the correct pro business & NONE liberal anti capitalist candidate just might help.

___________________________

These are separate regulatory bodies outside of congress regulating everything from a backyard garden to the toliet in the bathroom. Every all the regulations inflicted upon us daily, you'd think the retail forex traders are a small part of society. I never seen anything reversed before, especially an extra-constitutional body. Possibly the only thing to help is the creation of a loophole?

You got things like this happening everyday, for generations. Just saw it in the news, todays story:


I got a bank branch closing i use. I got a bill that effectively caps my income("administrative costs") for working. Poor guys who supported the trading software I use today are being laid off. BoA is laying off departments.



I mean you got a LOT. Or a "fundamental transformation" of America.



They should rollback this nonsense that you can't have accounts overseas and be regulated by their laws. Since when does American law stretch to other nations? Sounds like an occupation force to me. With a memorandum of understanding or not, this makes no sense.
Maybe that they can rollback, but do you think there's going to be a bill, out of everything, that says leverage should be 500:1?

Society might return to being nicer to live in like normal, but call me skeptical if I dont' see how they're going to reverse all the little things by extra-constitutional regulatory bodies.

Apparently there are still some brokers with enough balls to say "screw the CFTC." At least 25 or so according to the following list (many of them rather significant).
http://forums.babypips.com/rate-my-b...tml#post223230

I'm glad to see some Offshore Brokers from other countries stand up and say "No Freaking Way" to this unconstitutional CFTC BS.

the ENRONS, the housing collapse the w wall street big wigs bonuses, housing crisis and companies become a monster within itself above the law created this. It is kinda like having a house party and someone broke a vase in the living room and you are upset and kick everyone out. even though I did not break the vase, I still have to leave the house with the other party goers. in other words, had all the junk had not happened then big brother would not put a lid on things.... .....

Wrong again... why are so many of you trading, and confusing lot size with leverage? This thread is all about posters mixing the two up. (such as "I never use more than 10:1...")

Leverage is what it sounds like, the ability to borrow $50 for every $1. Currencies typically move by less than a cent a day, thus higher leverage (than stocks, for example) is needed to trade in order to make a profit. Leverage in other instruments doesn't matter, they may move dollars in a day, making leverage unnecessary.
You always use the leverage assigned to your account. You choose lot sizes when you trade.

1 mini lot, is borrowing $10,000. $200 will be removed from your equity at 50:1 leverage. This gives you $1 /pip. (usd jpy example, some brokers have different definitions for mini and micro)

Effectively the $1000 accounts can only trade 1 pair at a time, with 1 lot, and making it more likely that you'll get a margin call. This is bad for FF traders with their micro accounts.

Leverage restrictions in Forex simply closes the door to profitable trading with accounts less than $10,000. The US government is clearly overstepping here, we have no restrictions on the amount of money I can spend in Las Vegas, they operate state lotteries without restrictions, with virtually no chance of success. But suddenly, forex leverage is unthinkable.

Pattern Daytrader rules from the SEC. Remember when online trading was the game, and the volume and volatility was bad?
They can say I can't trade stocks with under 25,000 dollars. It's been close to 10 years now, i haven't seen that overturned.
Not to mention, in 2010, the US still has a 3 day settlement period like I'm trading real paper! From the 1920's.

Anyway. In stocks they can say you don't have enough money and suspend your account for trading too much(more than 3 times). Apparently in forex, for some reason, they are restricting how much you may now borrow too. So this is getting you from both ends.
I personally do not get it.aside from cronies and currency manipulation.

a lot is 100,000 dollars. Has been and still is. Like you explained about margin, the trader is putting down a certain amount of equality. `250 dollars, 1000 dollars, now 2000? Just from memory not doing the math now.
but he is still trading 100,000 dollars. Apparently due to margin calls, the brokers 100,000 is never lost, just up to the portion you fronted.
so, at the end of the day, who cares right? The government is now telling people how to move their money by how much? Micromanage much?

No it's not legal. You are correct. When you're a king who has been in congress since 1971....how many people here we not born yet...I suppose you think you are a king. But you can stratify this across every law we have no, and you see why we are in a depression.

As for going offshore to get around the CFTC, the brokers may not care, but how exactly are you going to defend yourself from a gov't that went after the Swiss Banks a year ago?

Remember why they tell you in high school the depression happened. Magic Leverage. Then we moved onto the next topic of how FDR packed the courts because his laws were all struck down. Yea the teachers laughed and moved onto the next topic. Never stopping to think about how absurd that sounds in context to today.
What are these people...i'll hold back the descriptions of them this time on their iq, regulate that is being complained about in here?
Leverage. or buying on margin. Although Margin is credit, leverage is just how much of that 100,000 you fronted. Seems like a no risk game to the market to me.

principally the government is restricting the possibility of the traders to loan as much money as the need. Now the trader can laon only 50 times his own account balance.
But the government can loan as much money as they need - is that fair??? In my eyes it isn't.

btw. the financial crisis wasn't caused from the fx traders who used a high leverage - it was caused from the lax money politic of the fed and now they're making the same politic (error) with the cheap money as they have done 5-6 yrs ago.

Somebody should make a law to prohibit that.