Is this the start of the end for high leverage? | Forex Factory

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Is this the start of the end for high leverage?

  • #1
  • First Post: Jan 16, 2015 10:06am Jan 16, 2015 10:06am
I am of the opinion that yesterdays bombshell may well result in regulations requiring a dramatic reduction of offered leverage in the near future.
I personally think that this would be a good move. If you need more than 1:20 you are under-capitalised in my honest opinion...
Where price is now, it has been before, and will be again.
  • #2
  • Jan 16, 2015 10:25am Jan 16, 2015 10:25am
Countries outside the US use high levels of leverage.
  • #3
  • Jan 16, 2015 10:28am Jan 16, 2015 10:28am
  •  onu
  • | Joined Feb 2006 | Status: superior senior member | 746 Posts
Quoting Jenx
I am of the opinion that yesterdays bombshell may well result in regulations requiring a dramatic reduction of offered leverage in the near future. I personally think that this would be a good move. If you need more than 1:20 you are under-capitalised in my honest opinion...
If you cant handle high leverage you are not qualified enough for this business in my honest opinion
  • #4
  • Jan 16, 2015 10:33am Jan 16, 2015 10:33am
No, business will continue as usual. Without high leverage retail wouldn't be able to invest. And where retail invest, market makers make money of it. So if they kill high leverage, you can bet that the whole FX business will be over and guys like Soros and co will be very unhappy. So no, it won't end, new companies will rise, Alpari will open up under new name with different contracts to their retail clients. They've learned that they can't be held responsible. So next time if you get something like this, you will have to pay them back every single penny.
  • #5
  • Edited 10:55am Jan 16, 2015 10:41am | Edited 10:55am
Quoting attilafx
No, business will continue as usual. Without high leverage retail wouldn't be able to invest. And where retail invest, market makers make money of it. So if they kill high leverage, you can bet that the whole FX business will be over and guys like Soros and co will be very unhappy. So no, it won't end, new companies will rise, Alpari will open up under new name with different contracts to their retail clients. They've learned that they can't be held responsible. So next time if you get something like this, you will have to pay them back every single...
NO this should be the start of regulating liquidity providers to hold them to their job of providing liquidity and making markets at all times instead of leaving us small traders and brokers holding the bag. http://www.forexfactory.com/showthread.php?t=522071

Leverage is our only chance for us little traders to compete in the forex trading business and that is NOT what caused this fallout. Even if you had reduced the leverage to 0, the fact that all the liquidity providers all took off on us and provided no market there, all the traders and brokers would've still sustained substantial losses because there was simply nobody trading there. And there is no way to assess the impact beforehand. What are you going to do now, reduce leverage as soon as news hit? So, are we going to reduce leverage now during NFP? during Fed Rate Decision announcement? during Fed Meeting Minutes? The ECB announcement is coming up, are we going to reduce leverage to 0 on EUR/USD, the most frequently traded currency pair with the highest trading volume? Ridiculous!!

Forex trading with high leverage has existed for more than 10 years now and we have always been trading fine. WHY? Because there has always been a market. The Forex market is the most liquid market in the world, with several $trillion of trading volume a DAY!! When the whole market collapsed on this one single pair because all of those chicken s*** liquidity providers decided to bail out on us, leverage or no leverage, there will be losses.

Leverage really shouldn't be used as scapegoats for everything although as much as what regulators would love to. Instead we need to focus on the real problem, how to hold the liquid providers responsible. They have been well compensated over the years in terms of spread, commissions, slippages that they fleeced from us, yesterday was a day for them to pay back and they didn't.
Make your losses in demo. Earn your profits live.
  • #6
  • Jan 16, 2015 10:49am Jan 16, 2015 10:49am
Quoting Jenx
I am of the opinion that yesterdays bombshell may well result in regulations requiring a dramatic reduction of offered leverage in the near future. I personally think that this would be a good move. If you need more than 1:20 you are under-capitalised in my honest opinion...
if you don't like high leverage trade stock instead.
  • #7
  • Jan 16, 2015 10:50am Jan 16, 2015 10:50am

  1. All central banks should agree that they can't intervene with more than 250 pips per day or so MAX. or make it 100 pip maximum per day. That way the issue is solved and will never ever happen again what hapenned with this idiot CHF story.

  • #8
  • Jan 16, 2015 11:33am Jan 16, 2015 11:33am
I find it amusing that so many traders here at FF are whining and predicting doom and gloom. Honestly, you wimps make me want to puke. MAN UP, you little sissy-pants!! I got NEWS for you - the rest of the world doesn't give a rat's a$$ about what happened yesterday! I turned on the news this morning, and guess what?? They were talking about terror attacks in Belgium and France, Obama meeting with Cameron, the Oscars "snub" - the SNB wasn't even mentioned ONCE. NOT ONCE - nobody else cares except fx traders.

NO, the US government ISN'T going to rush in with a whole bunch of new regulations. In case you morons didn't get the news, the Republicans won the mid-term elections last fall and IN FACT they are going to roll back the excesses of Dodd-Frank. So knock-off the Chicken-Little "oh, the sky is falling!" you little girly-boys.
  • #9
  • Jan 16, 2015 11:42am Jan 16, 2015 11:42am
Quoting gravitist
I find it amusing that so many traders here at FF are whining and predicting doom and gloom. Honestly, you wimps make me want to puke. MAN UP, you little sissy-pants!! I got NEWS for you - the rest of the world doesn't give a rat's a$$ about what happened yesterday! I turned on the news this morning, and guess what?? They were talking about terror attacks in Belgium and France, Obama meeting with Cameron, the Oscars "snub" - the SNB wasn't even mentioned ONCE. NOT ONCE - nobody else cares except fx traders. NO, the US government ISN'T going to rush...
Finally someone is saying what I'm thinking. Nobody really cares about yesterday. Nobody cares about Alpari, FXCM. Nobody cares about Lehman Bothers. Nobody cares someone broke BOE, nobody cares Apple shares will be trading at 0.50$ in 10 years. Tomorrow it's another trading day, like yesterday.
  • #10
  • Jan 16, 2015 11:51am Jan 16, 2015 11:51am
Quoting gravitist
I find it amusing that so many traders here at FF are whining and predicting doom and gloom. Honestly, you wimps make me want to puke. MAN UP, you little sissy-pants!! I got NEWS for you - the rest of the world doesn't give a rat's a$$ about what happened yesterday! I turned on the news this morning, and guess what?? They were talking about terror attacks in Belgium and France, Obama meeting with Cameron, the Oscars "snub" - the SNB wasn't even mentioned ONCE. NOT ONCE - nobody else cares except fx traders. NO, the US government ISN'T going to rush...
LOL
  • #11
  • Jan 16, 2015 11:53am Jan 16, 2015 11:53am
Wouldn't really bother me if leverage fell to 1:10. I personally have steered clear of CHF and JPY in recent years precisely because of this type of manipulation.As for the haters, something tells me they got their butts whipped.
Where price is now, it has been before, and will be again.
  • #12
  • Jan 16, 2015 12:14pm Jan 16, 2015 12:14pm
Quoting gravitist
NO, the US government ISN'T going to rush in with a whole bunch of new regulations.
NO they are not going to rush in with regulations, of course not. Ever since WHEN have they done anything to REALLY protect the well-being of us little guys.
Make your losses in demo. Earn your profits live.
  • #13
  • Jan 16, 2015 12:22pm Jan 16, 2015 12:22pm
Quoting Jenx
Wouldn't really bother me if leverage fell to 1:10. I personally have steered clear of CHF and JPY in recent years precisely because of this type of manipulation.As for the haters, something tells me they got their butts whipped.
You don't really need to steer clear of JPY, one of the most liquid currency around. You just need to steer clear of it during the Asian trading session in case the BoJ decides to do some intervention and push down the Yen. And btw, when they did that back in 2011 after the tsunami there was no turmoil back then, the trading continued as usual with no interruptions. WHY? There was a MARKET back then. Liquidity "providers" like Deutsche didn't just all of sudden, stop providing quotes to the price feed. There was still high leverage back then, the government was still doing manipulations and yet trading continued fine, no brokerage insolvency and etc.

So don't change the subject and blame on others, it's NOT the leverage, it's NOT the government, it's the liquidity "providers" who were supposed to be there but weren't, taking off on us and leaving us holding the bag.
Make your losses in demo. Earn your profits live.
  • #14
  • Jan 16, 2015 12:27pm Jan 16, 2015 12:27pm
Please stop.
Accounts blown only which is not used Stop loss.
Everything happend in 5 minutes. First candle moved 400 pips. Rest of everything happend after 4 minutes. Using high leverage always brings same risk percentage even without any crash.
  • #15
  • Jan 16, 2015 12:58pm Jan 16, 2015 12:58pm
Quoting Yakashimatsu
Please stop. Accounts blown only which is not used Stop loss. Everything happend in 5 minutes. First candle moved 400 pips. Rest of everything happend after 4 minutes. Using high leverage always brings same risk percentage even without any crash.
Stop-loss matters not a jot when price moves that fast.If your order can't be filled,it can't be filled.Full stop.
Where price is now, it has been before, and will be again.
  • #16
  • Jan 16, 2015 1:06pm Jan 16, 2015 1:06pm
"Trading off-exchange foreign exchange on margin carries a high level of risk and is not suitable for all investors. "

Which part of that do you people not understand?
  • #17
  • Jan 16, 2015 1:16pm Jan 16, 2015 1:16pm
glad I don't trade very high volume...anybody wanna start those nano trader jokes back up now?

If this signals anything, IMO, this is what it should signal clearer than ever:

- this is not a market you'll be a millionaire overnight in...unless you start your education with billions..
- this is a market that fosters continued and fairly steady growth
- range IS king and it adjusts - make sure you're adjusting with it technically and fundamentally
- take your whine somewhere else. Bring all the wine you've got.
"Holy Grail" exists - accepting where is the first step.
  • #18
  • Jan 16, 2015 1:20pm Jan 16, 2015 1:20pm
Excellent
Quoting VaBikePacker
glad I don't trade very high volume...anybody wanna start those nano trader jokes back up now? If this signals anything, IMO, this is what it should signal clearer than ever: - this is not a market you'll be a millionaire overnight in...unless you start your education with billions.. - this is a market that fosters continued and fairly steady growth - range IS king and it adjusts - make sure you're adjusting with it technically and fundamentally - take your whine somewhere else. Bring all the wine you've got.
Where price is now, it has been before, and will be again.
  • #19
  • Jan 16, 2015 1:22pm Jan 16, 2015 1:22pm
Quoting Jenx
Excellent {quote}

..you just said that for the unlimited wine..
"Holy Grail" exists - accepting where is the first step.
  • #20
  • Jan 16, 2015 1:24pm Jan 16, 2015 1:24pm
About 30 mins ago I opened long trades on GBP/CHF and EUR/CHF. The first time I've touched the CHF in a while, but how much of a bargain is it.Just keepng it ultra-low leverage for now
Where price is now, it has been before, and will be again.
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