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

[spak3060]

Title:the CFTC's proposal to limit forex leverage to 10:1
Saturday, January 30, 2010 8:21 PM
From: spak3060
To: "secretary@www.cftc.gov" <secretary@www.cftc.gov>
Hello Mr/Mrs,
When I heard about the CFTC's proposal to limit forex leverage to 10:1, I really worried, because my basic strategy has been based on the leverage 500:1. This strategy needs simultaneously to open many positions with a lot or half a lot for each of them. If the CFTC's proposal submits as a rule, I and other traders who use such these strategies need a huge investment to trade in forex, and it's impossible.
I protest, as a member of Forex Peace Army, to submit this proposal as a rule. I hope CFTC omits this proposal, as soon as possible.

Best Regards


Spak3060

Hi everyone
this is my protest which has been sent to CFTC

Kindest Regards

 

[spak3060]

Jan,

Spak3060,
Although I think 10:1 is way too low, a strategy that requires 500:1 upfront is probably not the safest way to trade. I personally open individual trades in the 5:1 to 10:1 range, but save my remaining leverage to either scale in to winning positions or to place separate trades on pairs unrelated to the long term ones I've got "parked" in my account.

Hi Pharaoh,
you're right in safest way to trade with low leverage, if you don't want to trade more than 3 trades simultaneously, and it is safe. Now you can do it with 500:1 too, without opening more positions, but you have more option if you want to open more positions with a mini account (of course with danger), while you can't open more positions with low leverage. But in max. leverage, you have a good option to open many positions, simultaneously, if you act quickly open and close positions in min. pips to make notable profits with a lot or half a lot. Of course it needs most experience and quicky. At the moment I am practicing it with demo account, without any risk which hope dominate over this strategy. I hope to do it well.
Good luck

Kindest Regards

 

[drkpac]

Hedging Rule...

Just found the answer to above. Traders who trade at international brokerages like FXCM UK would NOT be affected. See here:

NEW CFTC proposed regulations for retail Forex: Leverage Subject to a 10-to-1 limit - Forex Forum | FX Forum

Like I said, the CFTC already killed retail forex in the US with their no=hedging rule. So this will just accelerate the flow of money out of the USA.

Hello. I'm not sure about any other brokers, but I know that InterbankFx has re-introduced hedging (to a certain extent). Unfortunately, they have a whole set of rules that tells you how to hedge...but basically, you can now hedge on a daily time frame. This is perfect if you're a day or scalp trader. I guess some progress toward the way it used to be is better than none at all. The no hedging rule is BS...hedging has always been a big part of my trading, so hopefully it goes back to the way it was.

 

[zarni]

Yeah. Sorry Jan. lol D.C. is not considered a state so only has a mayor and 2 Reps.

But yes, writing/calling Congress and Pres. Obama would certainly help.

D.C. has no representation

 

[christinasc]

It sounds like they want the Rich to get Richer and the Poor to stay Poor.

Is this what America is now about? Socialism? Big Government regulation?

Time to find citizenship in another country if they keep going this way.

 

[Ken Long]

Money talks, etc, etc. There are plenty of large regulated brokers with account facilities in other countries.

If the CFTC does go through with this, as it appears they intend to, they will simply put their member brokers out of a lot of business.

 

[Ricex]

It sounds like they want the Rich to get Richer and the Poor to stay Poor.

Is this what America is now about? Socialism? Big Government regulation?

Time to find citizenship in another country if they keep going this way.

The CFTC is an independant agency, some of the commissioners appointed by Bush have been reappointed by Obama. Which one are you accusing of being socialist?
Without the CFTC, American traders would be exposed to a great deal more fraud and malpractice, it is there to protect you. Here is a recent example: Federal Court Orders Forex Dealer One World Capital Group and Its President, John “Jackâ€￾ Edward Walsh, to Pay $520,000 in Sanctions

This is one proposal that needs to be addressed, you don't scrap the car just because you've got a flat tyre.

 

[cowmadagan]

It sounds like they want the Rich to get Richer and the Poor to stay Poor.

Is this what America is now about? Socialism? Big Government regulation?

Time to find citizenship in another country if they keep going this way.

Rich getting richer and poor staying poor isn't socialism. Socialism prevents the poor from getting worse.
Just like any legal right, regulations don't work on the poor. The law has to act when someone is using their power to take what is protected as a 'right' from those with less power. This can only happen after the right has been infringed upon. So rights are an illusion.
In situations where financial regulation is necessary, you can only control the rich. In this case, they're limiting the availability of the financial perks of wealth (interbank spreads) to those with less power by regulating the rich brokers. Any regulation is an illusion because it's simply not feasible to enforce.

Since you're American though, one of the biggest benefits of your citizenship is how easy it is for you to emigrate. ie At least you're not from Haiti.

 

[limitup]

Well, this 10:1 leverage is pretty stupid. If this happens then, trade currency futures where you can get 30:1 to 60:1--lol I can't understand why everyone thinks that the NFA and the CFTC can legally regulate a de-centralized marketplace anyway. Has anyone traded spot forex futures lately?--LMAO!
Anyway, 100:1 max leverage would be a good sustainable leverage requirement for a market that is infinitely larger than the futures market.

 

[ecafyelims]

Not so bad

Leverage has been limited to 50:1.
This isn't so bad -- certainly not as bad as 10:1.

I see there's another thread open to questions now:
https://www.forexpeacearmy.com/forex-forum/general-forex-talk/11994-cftc-rules-broker-q-traders.html