CALL TO ACTION: CFTC 10:1 - Share what you wrote here

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KJSen

Recruit
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3
10 : 1 Leverage

Listed below is a message that I sent to the Secretary of the SFC.

Dear David A. Stawick,

I was and am in favor of President Obama's, to include Congress, decision to offer financial aid to the banking industry in order that they remain liquid during these extremely difficult financial times. Without the governments intervention we may have had a crash that could've surpassed those bleak times of the infamous 30's.

Unfortunately I am totally perplexed with your proposal of the 10:1 leverage regulation. This would be counter intuitive to the above. Meaning, this regulation would totally abolish retail trading in the Forex Market. Thereby eliminating a source of taxable income to the government that it could use to pay off some of the National debt.

I am a full time Forex trader. I can to some degree appreciate your need to impose a no hedging and FIFO restriction to employ additional security. For the life of me, I can't see any benefit to the country or the trading community for the 10:1 leverage regulation. I can only hope and pray that if there is an alternative reason why you are considering this, that you strongly look toward another avenue.

Sincerely,

Keith J, Senior
 

TheBluePrince

Private
Messages
20
Why are there only 72 signatures on the petition? People need to get moving. Maybe the CFTC will listen if we are loud enough, but that means more signers.
 

Agent86

Sergeant
Messages
195
OH yeh well I laugh at you HA HA HA, very amusing

It is somewhat amusing to see the furore of the tiny people crying about reducing Forex leverage. The regulators know that 90% of small traders lose all their money. And some even more! If you are a small trader then you should not be complaining that uncle Sam is trying to make your money last longer.
If you are fortunate enough to be in the 10% of winners then instead of complaining about the Government protecting the majority of people why not spend your time and some of your winnings to go around the regulations. You can set up an offshore company and trade immune from the US regulators - and also pick up some tax benefits too.

I smiled in reading one comment whose argument against the new regulations was the loss of jobs and tax revenue to US Govt. when Forex firms exit USA. Forex is fully automated these days - so just how much employment does it contribute to the US economy? And really do the large firms really pay tax on their international currency businesses? For decades large forex traders have shifted profits offshore and made losses onshore.

Small traders have little reason to complain about the leverage reduction unless they are big gamblers. In which case why not try Las Vegas instead of the forex roulette? Not being much of a gambler I believe the roulette odds are about 35 to 1. So the leverage is far greater than the new forex rules. Beats me in fact how the 500 to 1 leverage was allowed for so long with the high percentage of losers trying to win at forex.

Dont get mistaken that I am pro govt. I am pro the people. And from what I have seen in the world of forex the majority of traders are losers. Do we have any losing forex traders complaining about the reduction in leverage? So if there were a vote on the changes I presume it might go somewhere in the vicinity of 90 for and 10% against the change.

Does anyone else how some numbers on the vote across the population instead of just the small elite band of profitable traders?;)
Yes, yes I smile in amusement at your ignorance as well.

Leverage is what allows small traders to be in the market to begin with.

And yes revenue and taxes generated even by the small investors losses as well as gains via the forex companies profits etc. These revenues which would normally be taxed and also alow the forex companies to have these assets for providing these services also would be lost since as you said 90% of small traders lose money. And the forex company also needs these assets in order to operate their own business and provide services for you.

Thus someone is making money from those loses also it's not just lost into vapor, just like Vegas man LOL. Someone makes a profit, and someone pays taxes on their profits. GET IT Mr. HA HA HA aka smart alec

HA HA HA, this is quite amusing that people cannot see that there is profit and taxes being generated someplace as a result of leverage regardless of the losses.

So back at ya HOW ya like me now ? HA HA HA

It is quite elementary that there is profit generated and revenue generated from small traders or forex companies would not offer these services at all.

In fact perhaps most of the revenue generated may be from small traders since you have put it that 90% of small trader lose money.
When a small trader losses money, a forex company makes money and thus generates a potential profit in turn pays taxes. I'm happy to have provided a successful updating of your records, please note for future reference.
Yes quite simple subject to understand indeed.
 
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pipsbuster

Sergeant
Messages
246
Below is the email I sent to CFTC on this matter:

Dear Sirs,

I would like to hereby express my deep concern with the intentions of CFTC to limit the maximal leverage for retail Forex brokers from the current 1:100 to 1:10. In my opinion, the following scenario is likely in that event:

1. The maximal leverage reguirement will be increased for all US-regulated brokers from the current 1:100 to 1:10. This will clearly demonstrate a complete dismissal of a regular Forex trader's interests if they happen to be conflicting with the interests of the "big wallets" - banks and non-retail futures brokers. We do not wish to be "protected" till we go broke just to make them even richer.

2. US-based retail Forex brokers will sure be unwilling to lose their business completely. They've already got burned with the recent self-imposed regulations of the NFA (which is not even a government agency, although many traders are made to believe it is) and now clearly realize the 1:10 leverage will be the last nail into their coffin. These retail brokers will therefore start moving their businesses to other countries and servicing US customers from there, successful examples of which already exist: Dukascopy in Switzerland (which has recently introduced MT4 in addition to their custom platform), ATCBrokers and FXCM in the UK, FXDD in Malta, FXPro in Cyprus etc.

3. The US government in response will do everything possible to prevent US traders from enjoying the benefits of being serviced in other countries by making overseas transactions to personal bank accounts even more controlled and restricted.

4. Those traders who make a living from their trading will then have no other choice but to set up offshore companies for themselves through the Internet (contrary to a popular belief, this doesn't cost much - one can get an offshore company with an overseas bank account for as low as $1,500).

5. As all (or most) trading accounts will be on the companies' names, the US government may heavily lose on the income tax they collect from US Forex traders. Thus, trying to harm the average Joe trader and make the banks and futures brokers richer at his expense, the government is harming themselves in the end.

Since recently, America (which I really love) has been turning from a land of opportunities to a land of restrictions. Very sad to see this, indeed.

Yours sincerely,
...
 

Agent86

Sergeant
Messages
195
RE:

I send this email, doubtful it will have any impact, but I also passed this on to MGFinancial to please post their opposition and to inform their traders of this subject.

My email to CFTC below:
Hi,

Regarding the 10:1 proposal for changing the forex markets

Please consider this will hurt most small traders. Even those who trade for entertainment purposes. They will resort to playing in Vegas Gambling instead.

Those who are use to trading 100:1 and have strategies based on this, will not be able to afford to put more money into the market to open positions.

Those who are entertainment traders surely would not increase the equity size and simple take their $500 or so into the Gambling arena instead.

Essentially all this will do is kill the trading pool and less people will be willing to put money into the market. And this will hurt the value of currency as well.

Please Consider this
Thanks
 

Para47

Private
Messages
10
new regulation on leverage

As a retail trader I strongly object to this new rregulation which would put most of the retail traderd out of trading. To get the present level of profit we have to put more money and I do not see how that would help the investor.

FX trading is a highly risk investment area and people invest because of the high return they can get. If any one trade with a proper trading plan chanses to lose more is limited. However if some one trade without knowing what to do, then he would lose more. As per this new regulation such investors tend to lose more than waht they lose now.


This is a senseless proposal.
 

cowmadagan

Sergeant
Messages
393
Nathan Rothschilde,

You're clearly confusing leverage ratios and odds. If you show me, or us, a chart that displays 35:1 odds, I'll personally eagerly await your every post.
 

pipsbuster

Sergeant
Messages
246
As you might know, the US CFTC (Commodities and Futures Trading Commission) has put out a proposal of introducing the maximal leverage of 1:10 instead of the current 1:100. If this proposal ever goes into effect, it will mean a serious harm to retail Forex overall and any Forex-related business in particular (just imagine what it's like trading a live account with a 1:10 leverage). The change will concern absolutely all US-regulated brokers, not just the NFA members. Comments on the proposal are currently being accepted from the general public until March 22, 2010 at secretary@www.cftc.gov with "Regulation of Retail Forex" in the email's subject line. Retail traders are campaigning massively against the measure, with over 6,000 comments having been submitted to CFTC to date (heck, even a known Forex magnate Michael Greenberg sent one). Below is the message I sent to CFTC on this matter and I urge everyone here to join me in this effort (you may copy the text of my message and put your name in the end if you wish):


Dear Sirs,

I would like to hereby express my deep concern with the intentions of CFTC to limit the maximal leverage for retail Forex brokers from the current 1:100 to 1:10. In my opinion, the following scenario is likely in that event:

1. The maximal leverage reguirement will be increased for all US-regulated brokers from the current 1:100 to 1:10. This will clearly demonstrate a complete dismissal of a regular Forex trader's interests if they happen to be conflicting with the interests of the "big wallets" - banks and non-retail futures brokers. We do not wish to be "protected" till we go broke just to make them even richer.

2. US-based retail Forex brokers will sure be unwilling to lose their business completely. They've already got burned with the recent self-imposed regulations of the NFA (which is not even a government agency, although many traders are made to believe it is) and now clearly realize the 1:10 leverage will be the last nail into their coffin. These retail brokers will therefore start moving their businesses to other countries and servicing US customers from there, successful examples of which already exist: Dukascopy in Switzerland (which has recently introduced MT4 in addition to their custom platform), ATCBrokers and FXCM in the UK, FXDD in Malta, FXPro in Cyprus etc.

3. The US government in response will do everything possible to prevent US traders from enjoying the benefits of being serviced in other countries by making overseas transactions to personal bank accounts even more controlled and restricted.

4. Those traders who make a living from their trading will then have no other choice but to set up offshore companies for themselves through the Internet (contrary to a popular belief, this doesn't cost much - one can get an offshore company with an overseas bank account for as low as $1,500).

5. As all (or most) trading accounts will be on the companies' names, the US government may heavily lose on the income tax they collect from US Forex traders. Thus, trying to harm the average Joe trader and make the banks and futures brokers richer at his expense, the government is harming themselves in the end.

Since recently, America (which I really love) has been turning from a land of opportunities to a land of restrictions. Very sad to see this, indeed.

Yours sincerely,
...
 
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piphog

Private
Messages
26
To whom it may concern at the Commodity Futures Trading Commission:

I am writing to express my support, as a responsible FOREX trader, for the proposed restrictions on leverage from 100:1 to 10:1. It is absolutely absurd how these brokers prey on traders by, in many cases, REQUIRING 100:1 leverage and refusing to allow flexibility to reduce leverage. Why on earth would a broker REQUIRE someone to trade on exorbitant leverage levels as 100:1? We both know the answer to that...

People react to regulations and play within those rules. If they are being restricted to 100:1 leverage, then many people will of course trade at that level, and the whole time the brokers will be profiting from the gambling actions of unsophisticated amateur traders. Some data indicate that the success rate of retail FOREX traders is below 5%. This is directly linked to the encouragement (and as stated earlier the REQUIREMENT in some cases) of trading with far too much leverage.

I am sure you will be getting letters saying that it's all about "money management" and "risk management", but thats nonsense. There is no way to double-talk around the fact that people are borrowing 99x the amount they put down to trade -- causing small shifts to erase their principal capital.

The restriction on leverage to 10:1 is a responsible action that will save the money of MANY prospective amateur traders who are lured into essentially gambling on this currently overly-leveraged market by flashy advertisements on news and economics websites (something else that you should look into regulating...). The only people who are truly against this restriction are those who have had short-term success in trading with excessive leverage and of course the brokers who are extracting heavy rents from inexperienced traders.

I applaud your actions and it is these sensible regulations that will make the country a greater place with a more stable, productive, and REAL economy. Please continue the good fight so we can have a solid future for generations to come -- and please, do not give in to the lobbying actions of brokers and the minority fraction of traders who successfully use high-leverage in their trading strategies.

These regulations are needed and are common sense measures to maintain an orderly market and protect consumers from predatory actions of brokers.

Thank you.
 

piphog

Private
Messages
26
Why are there only 72 signatures on the petition? People need to get moving. Maybe the CFTC will listen if we are loud enough, but that means more signers.
Because these regulations are sensible and protect amateur inexperienced traders from predatory broker behaviour?

These regulations WILL pass, and 90% of the **** brokers out there will fail as a result of people no longer feeding them.
 
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