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Leverage Question

Discussion in 'General Forex Talk' started by Agent86, Nov 19, 2012.

  1. Agent86

    Agent86 Sergeant

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    Hi

    A few years back I though the leverage rules were changed to 50:1 maximum last time I checked.

    When I google search for "highest forex leverage" I get all these sites offering high leverage up to 500:1

    Some of those brokers are reviewed on the FPA brokers review

    I'm confused about this topic.
    Can someone please tell me if there are options for higher then 50:1 leverage or not ?
     
  2. Pharaoh

    Pharaoh Colonel

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    Hey 86, where have you been? I thought Chaos had finally caught up with you.

    The NFA restricted leverage to 50:1. Brokers outside the USA have to deal with their local regulators (if any). Some offer 1000:1 and more.

    If you spot a broker offering high leverage and claiming to be NFA regulated, report that one immediately.
     
  3. Agent86

    Agent86 Sergeant

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    lol, nope no chaos here

    Trading has been good but, I have another business too so I had to develop a different strategy that would allow me to trade during certain times

    Also been learning EA coding to develop my own experts so that I can trade without being directly in front of the computer contstantly.

    Anyhow, thanks I was just wondering cause i see companies like zulu trade ads on FPA and a whole bunch of others.

    I see what your saying, so theoretically I could signup with a company in another country and get like 100:1 or something ? But they might not be NFA regulated ?

    Is NFA world wide regs or just US ?

    I think I get what your saying but want to be sure before I even consider anything like this. I really would prefer 100:1 or maybe even 200:1 for my strategy which is not much in pips per month but it's very accurate and has 0 weekly drawdowns.
    I can get about 75 to 120 pips every month which is not a lot but it's slow and consistant.

    With 50:1 it's not a great return, so thats why I'm looking around for something different to try

    Thanks for the reply
     
    #3 Agent86, Nov 20, 2012
    Last edited: Nov 20, 2012
  4. Pharaoh

    Pharaoh Colonel

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    The NFA pretty much is USA brokers only, and they've limited them all to 50:1. The CFTC blocked access for USA traders to many offshore brokers. Still, there are some overseas brokers that still do accept US clients.
     
  5. Agent86

    Agent86 Sergeant

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    Thats sort of what I remember too, but it's been a while since I considered this topic

    So I guess the question is:
    Is it legal for US trader to get an offshore account with one who offers higher leverage ?

    I see some who declare that they are regulated by things other then NFA and CFTC:

    Such as:
    http://www.cashbackforex.com/ or something

    I'm looking for options if possible and legal to do so

    If anyone knows of anything please post
    Thanks
     
    #5 Agent86, Nov 21, 2012
    Last edited: Nov 21, 2012
  6. Pharaoh

    Pharaoh Colonel

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    As I understand it, it looks like the brokers are the ones facing legal repercussions from the CFTC, not the traders. If so, the worst case for you is that the broker may be ordered to stop providing service to you and to send your money back.

    One possible legal entanglement. Look up FBAR reports. That's a form you have to file if the total in all overseas banking accounts you have signature authority over goes above $10,000 at any point during the year. Penalties for non-compliance are painful. What I don't know is whether offshore brokerage accounts are technically included or not.
     
  7. Agent86

    Agent86 Sergeant

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    I guess I'll have to read a lot of stuff about this

    I read something on the web about the CFTC rules that a company could accept US residents if they were a bank engaged in forex but I don't know the details
    And one other thing I read was something about some level of something they call blah blah participation or something. I don't recall the term but it was used on the net that qualified certain US residents if they were a blah blah participant but I don't know what that means.

    Looks like this is getting complicated
    I did find a couple companies that take US I think Dukascopy is one of them and I guess I'll have to read a lot of stuff about this

    I read something on the net about the CFTC rules not excluding US residents if they were a bank engaged in forex but I don't know the details
    And one other thing I read was something about some level of something they call blah blah participation or something. I don't recall the term but it was used on the net that qualified certain US residents if they were a blah blah participant but I don't know what that means.

    Looks like this is getting complicated
    I did find a couple companies that take US I think Dukascopy is one of them
    FXVV | Forex, Online Trading, ECN/STP, Online Broker,FXVV is another

    But I also read something on the web that CFTC prohibits us residents from offshore forex but I don't know that thats enforceable or not, or if thats actually true.
    However, I don't want to get into any trouble but I don't mind excersising what is legal but perhaps not what is normal.

    I'll keep looking thanks
     
  8. pipdreaming

    pipdreaming Private, 1st Class

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    It depends where the broker is registered. I believe the regulations for American brokers are now more strict than ever (50 to 100 max leverage). Thats why many european brokers dont accept anymore american citizens.
     
  9. Pharaoh

    Pharaoh Colonel

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    Many offshore brokers stopped accepting US citizens and residents because the CFTC was suing them.

    I'd be happy if the CFTC took action against offshore brokers that rip off Americans, but feel it's VERY wrong to try to keep us from having choices about where to open accounts. I need to remember to write a "thanks for reducing my rights further" note to any congress members from my state who voted for Dodd-Frank.
     
  10. navyseal

    navyseal Private

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    I remembered some brokers offer 1:2000 leverage so it means with 100 USD you can trade value equal 200k$.

    But the more you can trade, the more money you can lose so please take carefully when trade with high leverage. 1:100,200 is the best for new traders :)
     

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