You may be right. But again I am talking about the masses not the few who know how to make it work for them.
And your successful trades made most probably multiple people poorer faster.
If the CFTC does this, say goodbye to retail forex in the USA
- Thread starter Pharaoh
- Start date
You may be right. But again I am talking about the masses not the few who know how to make it work for them.
And your successful trades made most probably multiple people poorer faster.
Music Man
Corporal
- Messages
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>>made people poorer
Not really. If I buy, perhaps the seller is taking profit. If I sell, perhaps the buyer is playing a longer or shorter timeframe than I am -- we could both be winners or both be losers. The "zero sum game" argument is too simplistic to be valid.
That said, people are responsible for their own trading decisions. No one forces them to trade Forex and risk warnings are everywhere. Some people will only lose money, but it's their money to lose. Others will acquire the needed skills and do well. There is no need for a Forex nanny to make everyone use the plastic knives.
MM
Not really. If I buy, perhaps the seller is taking profit. If I sell, perhaps the buyer is playing a longer or shorter timeframe than I am -- we could both be winners or both be losers. The "zero sum game" argument is too simplistic to be valid.
That said, people are responsible for their own trading decisions. No one forces them to trade Forex and risk warnings are everywhere. Some people will only lose money, but it's their money to lose. Others will acquire the needed skills and do well. There is no need for a Forex nanny to make everyone use the plastic knives.
MM
I will gladly write to the CFTF and express my opinions agaist this rule, but I've anticipated these kind of rules for a while. It was obvious when I first began to understand this market that something like this would happen as more and more retail traders moved in. The goverment, the regulatory agancies, and most people dont want retail traders getting rich or going broke. Neither senario helps them in any way.
Most people view what we do as useless at best, closer to financial vampires more acurately, and placing limits on our abilities to make obscene amounts of money, or lose obscene amounts of money is to their benefit.
Further, limiting leverage like this probably would help protect a lot of people from the get rich quick scams, as well as preventing people from getting rich quick. And a lot of people want them to do something like this.
I doubt that this will totaly kill the retail Forex market, but it will change it drastically. And then we as traders will have to look and figure out where the potenials lie, and it may not be in the Forex market anymore.
Most people view what we do as useless at best, closer to financial vampires more acurately, and placing limits on our abilities to make obscene amounts of money, or lose obscene amounts of money is to their benefit.
Further, limiting leverage like this probably would help protect a lot of people from the get rich quick scams, as well as preventing people from getting rich quick. And a lot of people want them to do something like this.
I doubt that this will totaly kill the retail Forex market, but it will change it drastically. And then we as traders will have to look and figure out where the potenials lie, and it may not be in the Forex market anymore.
Regulation of retail forex
Hi everyone!
Hope you are all keeping well and made it through the new year all more or less on one piece.
Sorry I haven't been around much lately. I've been soooo busy! Actually feel I'm getting close to the point where I can trade without a huge risk of losing my shirt completely. What an amazing journey this has been thus far.
There's not much more I can add to all the comments posted already.
I was apprised of the impending CFTC changes by my broker and fired off a letter tout suite. A very LONG but polite letter. Didn't mince words though.
Obviously I think more accountability by the brokers is a good thing, even though it will add to their paperwork load but will go a long way to making it much more difficult or nearly impossible for the scam artists to pose as a legitimate brokerage.
I'm very lucky that my broker just opened an office in the UK and if worse comes to worse I will transfer my live account to their UK office. I like my broker and want to stay with them.
I really don't know what the NFA and CFTC are playing at and I hesitate to use the words "criminal conspiracy" but it sure almost looks like it.
When the NFA brought in their totally retarded rules it made it that much more awkward for us to trade, but we adapted. I was just waiting for the other shoe to drop and it did, with a bang.
I think Gensler has some really good ideas regarding broker accountability but why in God's name would he bring in such a low leverage? Makes no sense and if it does go through it could presumably be viewed as a terrorist act because a lot of small brokerages will go belly up, maybe thousands or even tens of thousands of people will be put out of work. Certainly something America doesn't need, especially now. I hope they hang that little prick by his tiny little balls!!
The big boys might still be able to continue trading but they won't be happy about it because they're going to have to play by the same rules and that will make it much, much more expensive for them to trade forex. I don't think they'll put up with it for very long and will move to at least bring back reasonable leverage levels. Even if they go to 50:1 I can live with it.
As the CFTC chairman is appointed by the President, maybe we should petition Obama directly. He may not even know what that little weasel Gensler is up to. And if he does, then shame on him. He won't be re-elected.
The only strange anomaly that I've come across in this tragic comedy drama is that apparently America's creditors have put a lien on the US treasury to the tune of 47 TRILLION dollars!! No, I didn't misspell it. 47 trillion. I'm not sure how they would be connected but it could be a factor in this idiot drama playing out now. Someone much more conversant in macroeconomics and world politics might actually be able to figure it out much better than I.
Anyway, that's my little rant for tonight just to let you know that I've fired off my letter already and I hope it makes a difference. If you haven't already, fire off a letter to the CFTC ASAP and make sure, as pharaoh said at the beginning, keep it professional, be clear, no profanity, (even though you'd like to. I KNOW!) but firm. Make your views known in a professional manner.
Remember, we are all fighting for our forex lives. So write a letter, right now. Today!
It's not even so bad that we would have to go offshore to trade. I can live with that. But the bigger issue is the potential huge loss of jobs in the forex industry not to mention the potential of a great number of legitimate companies going under and perhaps a greater number of start-ups being locked out of the forex forever. This is serious sh**! Much worse than the crap the NFA threw at us. Right now every single letter is important. Yours could be the one that tips the balance in our favour.
All the best guys. Maximum pips for everyone!
Armin R.
Hi everyone!
Hope you are all keeping well and made it through the new year all more or less on one piece.
Sorry I haven't been around much lately. I've been soooo busy! Actually feel I'm getting close to the point where I can trade without a huge risk of losing my shirt completely. What an amazing journey this has been thus far.
There's not much more I can add to all the comments posted already.
I was apprised of the impending CFTC changes by my broker and fired off a letter tout suite. A very LONG but polite letter. Didn't mince words though.
Obviously I think more accountability by the brokers is a good thing, even though it will add to their paperwork load but will go a long way to making it much more difficult or nearly impossible for the scam artists to pose as a legitimate brokerage.
I'm very lucky that my broker just opened an office in the UK and if worse comes to worse I will transfer my live account to their UK office. I like my broker and want to stay with them.
I really don't know what the NFA and CFTC are playing at and I hesitate to use the words "criminal conspiracy" but it sure almost looks like it.
When the NFA brought in their totally retarded rules it made it that much more awkward for us to trade, but we adapted. I was just waiting for the other shoe to drop and it did, with a bang.
I think Gensler has some really good ideas regarding broker accountability but why in God's name would he bring in such a low leverage? Makes no sense and if it does go through it could presumably be viewed as a terrorist act because a lot of small brokerages will go belly up, maybe thousands or even tens of thousands of people will be put out of work. Certainly something America doesn't need, especially now. I hope they hang that little prick by his tiny little balls!!
The big boys might still be able to continue trading but they won't be happy about it because they're going to have to play by the same rules and that will make it much, much more expensive for them to trade forex. I don't think they'll put up with it for very long and will move to at least bring back reasonable leverage levels. Even if they go to 50:1 I can live with it.
As the CFTC chairman is appointed by the President, maybe we should petition Obama directly. He may not even know what that little weasel Gensler is up to. And if he does, then shame on him. He won't be re-elected.
The only strange anomaly that I've come across in this tragic comedy drama is that apparently America's creditors have put a lien on the US treasury to the tune of 47 TRILLION dollars!! No, I didn't misspell it. 47 trillion. I'm not sure how they would be connected but it could be a factor in this idiot drama playing out now. Someone much more conversant in macroeconomics and world politics might actually be able to figure it out much better than I.
Anyway, that's my little rant for tonight just to let you know that I've fired off my letter already and I hope it makes a difference. If you haven't already, fire off a letter to the CFTC ASAP and make sure, as pharaoh said at the beginning, keep it professional, be clear, no profanity, (even though you'd like to. I KNOW!) but firm. Make your views known in a professional manner.
Remember, we are all fighting for our forex lives. So write a letter, right now. Today!
It's not even so bad that we would have to go offshore to trade. I can live with that. But the bigger issue is the potential huge loss of jobs in the forex industry not to mention the potential of a great number of legitimate companies going under and perhaps a greater number of start-ups being locked out of the forex forever. This is serious sh**! Much worse than the crap the NFA threw at us. Right now every single letter is important. Yours could be the one that tips the balance in our favour.
All the best guys. Maximum pips for everyone!
Armin R.
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CFTC Rules are Draconian and carry too broad a brush
Great Work, Pharoh...the following proposal was sent to the recommended parties. I think this should address the real issues unless the choose to be open as to the motivation which might have other intentions.
Gentlemen:
The new proposed CFTC rules are very positive regarding the registration required of all participants dealing with the solicitation and handling of forex monies.
The proposal to reduce the trading ratios to 10:1 is Draconian and requires to much capital to be tied up for a business wishing to protect itself in the ever fluctuating currencies.
Additionally, the recent rules to reduce to reduce ratios to 100:1 was a good move and to 25:1 for certain very high risk currencies. This new move is intended to cut out the retail forex trading which makes no sense. The little retail guy has no ability to influence the giant forex market.
Indeed, the intent should be to limit those giant financial institutions and money speculators from playing havoc with currencies as did George Soros years ago. Why not just limit those with portfolios in excess of 500 or maybe as low as 100 contracts to a ratio of 25:1.
In any event, the issue at hand should remain the restriction of large financial institutions putting large sums at risk for their own account or that of a group of their clients.
In no respect whatsoever, will this strategy change the direction or impact upon the stock market as Elliott wave rules and the patterns are consistent over the past 300 years and the market is quite predictable. What it will change if the changes are as I propose, is that the big guys won't make a killing and pay out large bonuses and they won't make large losses and require bailouts or go bankrupt. At present for the banks its "heads they win, tails we lose". That should be your priority and not another measure to restrict the trading of individuals.
And, as you are no doubt aware, there will be many large firms that depend upon retail forex trading that will find alternative safe havens elsewhere in this virtual world.
Respectfully submitted
Great Work, Pharoh...the following proposal was sent to the recommended parties. I think this should address the real issues unless the choose to be open as to the motivation which might have other intentions.
Gentlemen:
The new proposed CFTC rules are very positive regarding the registration required of all participants dealing with the solicitation and handling of forex monies.
The proposal to reduce the trading ratios to 10:1 is Draconian and requires to much capital to be tied up for a business wishing to protect itself in the ever fluctuating currencies.
Additionally, the recent rules to reduce to reduce ratios to 100:1 was a good move and to 25:1 for certain very high risk currencies. This new move is intended to cut out the retail forex trading which makes no sense. The little retail guy has no ability to influence the giant forex market.
Indeed, the intent should be to limit those giant financial institutions and money speculators from playing havoc with currencies as did George Soros years ago. Why not just limit those with portfolios in excess of 500 or maybe as low as 100 contracts to a ratio of 25:1.
In any event, the issue at hand should remain the restriction of large financial institutions putting large sums at risk for their own account or that of a group of their clients.
In no respect whatsoever, will this strategy change the direction or impact upon the stock market as Elliott wave rules and the patterns are consistent over the past 300 years and the market is quite predictable. What it will change if the changes are as I propose, is that the big guys won't make a killing and pay out large bonuses and they won't make large losses and require bailouts or go bankrupt. At present for the banks its "heads they win, tails we lose". That should be your priority and not another measure to restrict the trading of individuals.
And, as you are no doubt aware, there will be many large firms that depend upon retail forex trading that will find alternative safe havens elsewhere in this virtual world.
Respectfully submitted
I hate to be the one to say it, but it's about time. Anything over 10:1 leverage is irresponsible and wreckless.
I've always supported the practitioner's guide for trading -- where professionals never trade with higher leverage than 10:1 -- and 10:1 is still high. I have always avoided brokers that do NOT offer flexible leverage. Brokers like MBTrading and Forex.com force you to use 100:1 because they want you to stop out earlier and lose more money and trade more and treat the FOREX market like your own little casino.
Thank you CFTC, for some sensible regulation in this wreckless market that destroys people's lives. You can not beat this market, and you should not be trading at more than 5:1 leverage -- and you should be using the market to hedge other investments rather than speculate carelessly in vain attempts to profit.
This is what the currency market is for!
I've always supported the practitioner's guide for trading -- where professionals never trade with higher leverage than 10:1 -- and 10:1 is still high. I have always avoided brokers that do NOT offer flexible leverage. Brokers like MBTrading and Forex.com force you to use 100:1 because they want you to stop out earlier and lose more money and trade more and treat the FOREX market like your own little casino.
Thank you CFTC, for some sensible regulation in this wreckless market that destroys people's lives. You can not beat this market, and you should not be trading at more than 5:1 leverage -- and you should be using the market to hedge other investments rather than speculate carelessly in vain attempts to profit.
This is what the currency market is for!
Music Man
If I can't win with 100:1 leverage, then how come I'm up 20% for the year to date?
This market does not destroy anything, but fools and their money are soon parted, Forex trading or not.
MM
--------------------------
Bull****. I dont buy Pharoah's argument that using less money and borrowing more is the same as using more money and borrowing less to trade THe mentality is different, 100:1 is insane, its too much.
CFTC should be applauded for this move.
We dont need any more amateurs anyway -- all they do is feed the market makers! Market makers profit all the time from the stupid trades of children.
If I can't win with 100:1 leverage, then how come I'm up 20% for the year to date?
This market does not destroy anything, but fools and their money are soon parted, Forex trading or not.
MM
--------------------------
Bull****. I dont buy Pharoah's argument that using less money and borrowing more is the same as using more money and borrowing less to trade THe mentality is different, 100:1 is insane, its too much.
CFTC should be applauded for this move.
We dont need any more amateurs anyway -- all they do is feed the market makers! Market makers profit all the time from the stupid trades of children.
10:1 leverage
Brilliant article, Pharoah. I can't improve on it.
I wrote in, concentrating on the 10:1 limit, but added one extra point.
The financially unwashed in Europe are trying to introduce the Tobin tax on all transactions. At its worst, that would operate at 1% on the nominal value of the contract. This is very popular with the French, as it would destroy London as a forex centre, and very popular with the current British government, which has done so much to destroy the country in the last few years, and is seeking to employ a scorched-earth policy for the new government in May.
Driving business from the US does not send it to a well-regulated area but to Asia - no doubt there are some wonderful, sound businesses there, but would you trust your money where you didn't even understand the legislation?
I put the above point rather more gently in my letter, but summarized it as a recipe for fraud.
Keep up the good work.
WellSaid
Brilliant article, Pharoah. I can't improve on it.
I wrote in, concentrating on the 10:1 limit, but added one extra point.
The financially unwashed in Europe are trying to introduce the Tobin tax on all transactions. At its worst, that would operate at 1% on the nominal value of the contract. This is very popular with the French, as it would destroy London as a forex centre, and very popular with the current British government, which has done so much to destroy the country in the last few years, and is seeking to employ a scorched-earth policy for the new government in May.
Driving business from the US does not send it to a well-regulated area but to Asia - no doubt there are some wonderful, sound businesses there, but would you trust your money where you didn't even understand the legislation?
I put the above point rather more gently in my letter, but summarized it as a recipe for fraud.
Keep up the good work.
WellSaid
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