If the CFTC does this, say goodbye to retail forex in the USA

[Jason Rogers]

Hello,

I read an article about the proposed changes to the Farm Bill at New CFTC margin limit proposal in US 10:1 - Pip Cop - Forex Robot Reviews with regards to the Forex Market.

This article is very interesting. It says that the registering of "agents" (my term) is a good thing and should remove most of the fraud being perpetrated on traders.

He thinks that the capital requirements are too stiff and should be increased gradually to that $20,000,000. I agree with his conclusion that a minimum requirement of $20,000,000 will force all but the wealthiest brokers out of the country; taking their money and clients with them.

He then goes on to state that a low leverage rate on 10:1 WILL drive traders out of the U.S. markets. If this is what you are intending, I think it will work. Do you want to drive traders and their money out of the U.S.?

A Forex trader,

The positive in the proposal is the registration requirement for referring brokers. This should hopefully reduce the number of ponzi schemes and instances of fraud perpetrated by individuals.

On the point of capital requirements, brokers are already required to set aside $20 million in capital. This rule was passed by the NFA last year. The way the proposal was written and now being covered in parts of the media, one would think there were no capital requirements or registration requirements with the NFA and CFTC period. This is just incorrect.

Regulations have stipulated since 2000 with the passage of the Commodity Futures Modernization Act that forex brokers have to be registered. Additionally, all of the US based forex brokers registered with the CFTC have at least $20 million in capital as outlined by the financial data put together by the CFTC: http://www.cftc.gov/ucm/groups/public/@financialdataforfcms/documents/file/fcmdata1109-xls.xls

The only really new parts of the proposal are for referring broker registration and limits on leverage to 10 to 1.

 

[ecafyelims]

You can't be serious.

Here's what I think is driving the new rules. 10% of traders make money in forex. 90% lose money. There's no way the goverment is going to allow me and others to keep losing money to the forex scam. There's no way anyone can tell me that the markets aren't being manipulated. They do hunt stops. and I believe they manipulate prices to take money. I've lost consitently trade after trade and have hit the targets perfectly only to see the price action go dead for 2 minutes while someone changes the computer program so prices reverse. Online poker just got caught doing this same thing. I've asked numurous brokers to help me get some one on one to check my trade style and all of them refused. Based on that, I'm so pissed off at the forex dealers that I hope the goverment shuts it down. This leverage ratio of 10 to 1 is as close as they can get. The forex industry win/loss ratio is about 90/10 in favor of the broker. If it was more inline with Las Vegas 52/48 then it would be considered legal. What is happening in the forex markets is illegal and is theft and needs to stop. I have warned a couple of forex brokers to change coarse before this day came. But the greed caused them hearing loss. There's no way are economy can afford the massive losses in the forex industry to continue. So I'm going to issue the warning again. Either get the win/loss ratio to about 52/48 or shut it down. If the cftc doesn't do it then congress or the white house will. Here's what some of you can do to help. Start helping the traders losing money to start making money. NOW, before it's to late.

Maybe we should remove knives from kitchens too. About 100% of people cut themselves at some point. Look, you knew that 90% of people fail, but you traded anyway. Are you a gambler, or a trader?

If you're looking for random luck to make you money, you're in the 90% of failures. In order to be initiated into the 10%, you need to learn from others and the market herself.

We aren't children. We are able to make our own mistakes. I enjoy making my own mistakes because I know it'll only happen once.

 

[PhilipPirrip]

Goodbye Big Brother, Hello Big Ben

Looks like an overseas account is the way to go. Any others besides FXCM UK that garner decent ratings?

 

[jtfx]

What will brokers do if this 10:1 is indeed passed?

Will they shut their USA operation and move to another country?

But if I am not mistaken, brokers with any USA clients are required to register with NFA/CFTC and therefore, going to another country will not work at all...

 

[PipStar]

Many brokers already have offices offshore. FXCM, FXSol, Forex.com, Oanda and soon FXDD to name a few. You are able to hedge and get better leverage there.

With 10-1 leverage U.S brokers will not have enough clients left to make their operations worthwhile. It's as simple as that.

 

[briansnj]

Many brokers already have offices offshore. FXCM, FXSol, Forex.com, Oanda and soon FXDD to name a few. You are able to hedge and get better leverage there.

With 10-1 leverage U.S brokers will not have enough clients left to make their operations worthwhile. It's as simple as that.

I agree but I also am willing to bet there will be a huge amount of outcry from all the brokers that do not want this to happen.

My broker already sent me an email notice and requested me to write in and fight against it. I just learned it from here first!!!!! Shame on my broker for being so slow!!!!

 

[AsstModerator]

I'd like to ask every FPA member to follow the instructions in the first post in this thread. Please write a complaint to the CFTC about the proposed leverage limits. Post what you send to them here...

https://www.forexpeacearmy.com/fore...tion-cftc-10-1-share-what-you-wrote-here.html

If you've gotten emails about this situation from your broker or any other forex group, post those here...

https://www.forexpeacearmy.com/fore...at-brokers-other-forex-groups-wrote-here.html


.

 

[zarni]

The Collective FX. They are not "broker/dealers", as the law describes. And if the CTFC does try to muscle in, I am pretty sure the operation will simply move offshore. If that doesn't work, then I'll move offshore as well.

However, wouldn't the biggest risk to Forex trading ultimately come in the form of bank regulation? There is a big anti-capital political constituency worldwide. If liquidity providers are somehow prohibited from servicing leveraged contracts, then it wouldn't matter where you try to trade.

Of course, in the media, there is no voice for the individual Forex trader. So, the voters cheer restrictive regulations on, believing it only affects the Bernie Madoff's of the world. They do not understand that one of the few remaining avenues for the common citizen to lift themselves up out of wage slavery is being removed. And if the media does decide to report on these matters, they will likely portray it as the equivalent of gambling -- a vice to be stamped out.

The Forex industry has only recently come to the attention of the public, mainly through TV ads from brokers. In the current political environment, it may be time for the Forex industry to start doing a little PR for itself. If voters perceive Forex as something that they can benefit from, then they may demand that politicians protect Forex traders' interests, wishing to be Forex traders themselves. Otherwise, only the interests of those who don't want all these pesky retail Forex traders underfoot will be served.

MM

Whatever you may think about this 100:1 is gambling.
Although I do extremely well in my accounts on high leverage I actually do believe that generally the public will be served better to be forced to trade at 10:1. Most people lose and lose FAST. High leverage benefits only the select few, although the bulk of traders are new.

It is arguable that forcing something onto somebody for their own good is not the way to do it but let's look at analogies in other areas of our lives. A cap on leverage is essentially a speed limit on financial transactions. Is there a statutory speed limit on the roads...YES (except certain places in Montana and Nevada). This is not only for you but for the common good. If you lose your money and go bankrupt you do impact society as a whole.
Nobody would disagree that most people lose on forex using 100:1 leverage.

If you don't have enough money to trade and live on just 10:1 then you should not be trading to begin with. Retail forex is a dirty dirty business. I for one welcome 10:1. Leverage is the addiction of the masses these days and that is what got us into the mess we're in.

 

[fxgreek]

CFTC 10:1 Rule is for MORONS

The 10:1 Rule is for MORONS with Megabucks to play the Forex Market.
Like them OLD TIMES before the advent of the Internet.
You buggers are aiming to send this opportunity back in to the STONE AGE,
where apparently while collecting a Government paycheck are happy to exist.
I have spent 10 years of my life trading the spot forex market, perfecting my technique.
I have never been taken by a retail forex broker, I do my research and act prudently.

WHO is CFTC to interfere with FREE ENTERPRISE??

Monitor and police Spot Dealers for shenanigans... BUT LEAVE the available leverage WELL ALONE.

This is still AMERICA the land of opportunity, and NOT AMERIKA after USSR.

I am

George C. Karadimas

 

[Pharaoh]

Whatever you may think about this 100:1 is gambling.
Although I do extremely well in my accounts on high leverage I actually do believe that generally the public will be served better to be forced to trade at 10:1. Most people lose and lose FAST. High leverage benefits only the select few, although the bulk of traders are new.

It is arguable that forcing something onto somebody for their own good is not the way to do it but let's look at analogies in other areas of our lives. A cap on leverage is essentially a speed limit on financial transactions. Is there a statutory speed limit on the roads...YES (except certain places in Montana and Nevada). This is not only for you but for the common good. If you lose your money and go bankrupt you do impact society as a whole.
Nobody would disagree that most people lose on forex using 100:1 leverage.

If you don't have enough money to trade and live on just 10:1 then you should not be trading to begin with. Retail forex is a dirty dirty business. I for one welcome 10:1. Leverage is the addiction of the masses these days and that is what got us into the mess we're in.

I'm a conservative trader. I personally never use more than 10:1 for a single trade, but I have been known to open additional positions. I also think not being able to scale in to a winning set of trades on a good trend is crazy. Once enough profit is locked in on one position, I've been able to add a second only risking half of the secured profit. On my best position trade ever, I had 10 positions open, all with profit securely in place. Once the first one went far enough, I was never at any risk of loss even if the market reversed hard.

I couldn't have opened more than 2 or 3 of those positions if I'd been locked down to 10:1.

Risk management isn't about leverage. It's about how much money you lose if the market goes against you. 10:1 means you can't even open a full lot with less than $10k in your account.

If they pass 10:1, I'll be moving all my trading offshore.