Francesc Riverola,
Hi everyone
Here you have attached the statement released ty Forex Dealers Coalition (FXDC) against the CFTC proposal that went public yesterday.
GFT, Oanda, IBFX, Gain Capital, FXCM, FX Solutions, FXDD, PFG Best and CMS Forex consider that if the proposal passes:
- 90% of the account will go offshore, mostly to the United Kingdom
- Thousands of high educated jobs will be lost
- An industry worth over $1 billion gone, loosing millions in taxable revenue.
- The proposal does not fix fraud, the subject the rule tries to adjust. Battle against unlicensed FDMs and IBs fix the fraud, not 10 to 1 leverage.
- 100 to 1 leverage is very popular. Traders simply will not accept 10 to 1 leverage.
- Unregulated dealers from around the world will also benefit.
Conclusion: Thousands of jobs lost when unemployment is at 10%, consumers more vulnerable to fraud, and the United States tosses away one of the most promising export industries.
Does this make any sense to you?
View full statement here:
Forex Dealers Coalition Against CFTC Proposal To Limit Leverage 10 to 1
Francesc
Communism has arrived in the U.S
another evil looming
I fully agree with CFTC, with so much leverage the only people who make money are the market makers, because most of the traders learn (through websites and dealers) an approach to forex as gambling business which is not! to much expectation is created by sites like this where money isntold to be an easy thing to earn!!!!!!!!!!!!!!!!!! welcome to the new rules!!!!! I am sorry for you that dealers and brokers will have less money to make adverting!!!!!!
Great points, Francesc! We saw the CFTC proposal yesterday and feel that retail FX traders in the U.S. should take a stand on this issue.
We have a special guest from the industry joining our All Things Forex broadcast on Monday, Jan. 18, who will explain in detail the proposed cap on leverage and other new regulations by CFTC.
Americans are proud to have created post-idustrial capitalism when China dresses and feeds its citizens. It’s what they call a service-oriented economy. Looks like they view service as fast food joints jobs only. It’s a degradation of the nation. Good for Europe, though.
I have been trading currencies for 5 years. A lot of lessons have been learned, some of them painful, and all of them the hard way. I am committed to spot currency trading for my livelihood now, but before I could begin doing so, I had to discover a trading style that I am comfortable with, confidence that my style is sound and that my emotions are controlled, and that my accounts are adequately capitalized.
When the new NFA rule was imposed, I knew it would impact my trading, but I tried to work within its confines–previously I had been operating with 200:1. During December, I continued to make money, but my confidence had been shaken. At the end of December, I doubled my account values to reestablish “Margin Level” to what it had been previously.
I believe the cftc wants to lower leverage, but I believe they have introduced 10:1 as an absurdity so that traders might be tolerant of 25:1 or at the least 50:1. Even at 50:1, I will have to double my accounts again. I will not do that, and I do not want to be in the position of having all my eggs in one basket. Nor do I want to sell the house in order to have enough liquid capital to trade spot currencies.
Since there are alternatives elsewhere, I will move my accounts if leverage is lowered any further.
I cannot understand why someone, anyone, would consider himself to be better suited than I am at making decisions regarding leverage in my trading accounts–it is my livelihood. And there is absolutely no government employee who can do so better than I can. Regulation is simply not there when you need it the most.
The idea that the government can take money from me in the form of taxes to pay its employees to provide me with protection is truly absurd. Sounds like “The Godfather”.
I suggest people forward the FXDC letter to as many politicians as possible.
10:1 is not going to work since the percentage of gyration in Forex is smaller than that of the Stock market. Gains or loss in the trading will be so small that there will be no point of trading Forex in the US. Instead, more likely accounts will be moved outside the US.
10:1 leverage? it’s a robbery!!
i’m a semi pro trader…
i dont have US broker account..(especially after NFA no hedging rule)
now,CFTF came up with 10:1 idea…really? i would surely say this is the silliest business idea for 2010
someone is trying to kill the business
…they want more portion of the cake,simple as that!
These wackos MUST be stopped!! Why would ANY Broker want to be associated with the NFA?? First NO Hedging, forcing all the brokers that wanted to keep any customers to create smoke and mirror back office solutions…now this….??!! The NFA is bankrupting all their member brokers… WHAT A TERRIBLE JOKE!!
If the dealers make money , that´s great , that´s the american way . What I like about USA is the REGULATIONS AGAINST FRAUDULENT PRACTICES , not against the possibility of make money . If I am an adult and do know the rules and decide to risk my money in a fool manner , well , bad for me . If I decide to eat bad food , well , bad for me .
What a joke.
First the NFA OCO regulation (really?!?!?), and now this…
Where do they find these people? Have they ever placed a single forex trade in their lives? Totally clueless…
Goodbye New York, Hello London.
With the obvious recklessness displayed by the NFA with their interference in trading strategy, (FIFO, hedging), I already moved all my accounts out of the country. When they displayed their willingness to actually interfere in trading strategy itself, instead of just guaranteeing bankroll, I was done.
This is a ploy to negotiate the actual limit down to 50:1 or similar. It’s like they’re attempting to destroy the very industry they’re regulating. All it’s really doing is driving money offshore.
I wonder if there isn’t some bribery being done here, ie: that someone influential with the SEC or the NYSE itself hasn’t realized that volume is leaving those markets for forex, where you can actually trade without partial fills and slippage all over the place, and is trying to squash the transition of the individual traders.
Ok, according to the document, if you are opposed to this you have less than 60 days to make your objection heard by emailing the address: secretary@cftc.gov Include “Regulation of Retail Forex” in the subject line of the message.
I would imagine that the objections of the brokers themselves will be 1) expected, and therefore 2) largely ignored. What will catch some attention is a number of emails from individuals who are themselves victimized by this proposal.
A third point of view.
Deep philosophical question: Are people stupid?, Deep philosophical answer: “Do not, they are Strategic” …
Based on this premise, almost absolute truth, let’s consider what the United States of America Government Control Organization, and they only, have decided to propose and carry out.
All senior executives that work in those agencies are indeed not incompetents, so would be naive to think that they don’t know what they are doing, or that they have no idea that with these measures, the economic activity that concerns us will not be anymore as attractive as it is now in the United States.
Immediately comes to the fore a question, Why they will want to “kill” this activity in the U.S.?, And the answer seems obvious, SHARING THE CAKE.
For quite some time we have seen an unsustainably strong euro and a dollar hopelessly weak, this brings some obvious problems and advantages to the owners of these currencies.
The most obvious disadvantage is the continued rising prices of European products and the problem that this generates. The winner is the U.S. that somehow will improve its international competitiveness, and incidentally, they will give them a hand with the “crisis” issue.
Countries like Australia, New Zealand and Canada, are comfortably seated with the commodities prices that each one of those countries have.
Additional to this we should remember that Europe, before the Caribbean tax havens, has been a financial preferred destiny. That’s one of the factors that London, Switzerland and many other euro-countries and cities became financial hubs of Insurance, Banking and Trading worldwide.
So it seems has happened is that some fairly important people got together and decided that “driving” the market can not climb down the euro and rise up the Dollar, will be better to exchange a bit our business activities: I the United States of America will give you Europe, much of my financial business and you Europe, will let the dollar as it is, so I can sell more, thing that I really need now with a bit of rush.
It is also easy to think that it is no problem for important Brokers create subsidiaries in European countries and managed from there this lucrative business, referring to the retail trading, and have also, just in case, offices in the United States that handle large accounts only .
What do you think: It is or not a brilliant solution to keep the world spinning? of course it is not a conspiracy.
That’s a very unreasonable regulation. With leverage, the little guy has opportunity to earn a little extra change for his or her family in some cases. Why would the government be so intent on limiting that or eliminating it altogether.
Well, I gotta go. I need to research a legitimate offshore broker. It hurts me to say this because I bleed red, white and blue, but I will not do FOREX business here in the US.
100 to 1 leverage is very popular among the traders… well we don’t care what the traders likes or not.
people like gino are the problem, not thinking before they open their mouths. This ruling will shatter dreams, and hurt the little guys out there who trying to make it one day
Call it gambling or whatever you want,but who are you to tell people where to spend their money?
When this becomes law they will come for you soon….
Probably it will be illegal to move your money outside of the US, or something similar, they will figure something…
gino & co. act like they were born as succesful traders right off the bet
pleease…
Why we do not see the things from the bright side. Market economy is where more people partcipate and then real market exists. If millions of people join the Forex due to the lower leverage then it will be more difficult for the ‘biggies’ to manipulate the market.
Simple. Morons are at work in NFA and CFTC. If 1:10 kicked in tonight at market open, every single one of us would get a margin call. Right? Of course. Is this what they want? I guess so. Everything they do is NOT done to protect retail customers but to drastically hinder their earnings and their overall participation. Just come right out and say it! Bunch of retards that they are! Yes, I too am moving to a UK firm. UK and FSA will now thank the abject retards at NFA and CFTC for increased business in UK. Nice job morons! You abject useless retards.
I suspect too that next move is to drastically hinder moving funds out of US to fund your UK accounts. Well, then simple. I will just simply move out of US altogether and renounce my US citizenship. F’ing sinple!
Next move? Making it illegal for UK firms to accept funds and account openings from US citizens. These retards are too full of themselves to see the errors of their retarded inbred ways, they will simply do more and more hindering crap to back up their initial retard positions. The smart thing for NFA and CFTC to do now is the say that they are morons and have made a big mistake and bring back hedging and institute 1:100 and 1:200 for permanent landmark of US forex trading. But I know they are retards; they’ll die before making such proclamations.
Uh, hello!!!??? 1:10 leverage will not get more people involved with forex. Are NFA shrills in here typing nonsense? I think so. And please… keep myths of forex and futures and stock trading out of here. Nobody can manipulate the market and 1:10 leverage will make it more difficult to manipulate a damn thing. Opposite is true… leverage option at the discretion of individual traders will bring in more forex participants. You cannot regulate risk and attempt to regulate fraud. If anti-fraud is their stance, then they should go after fraudulent forex dealers instead. Not force legitimate US forex firms to get ready to close shop in US.
Just emailed David Stawick (The Secretary) stating my objection to the regulation. I urge everyone reading this to be proactive and let their voice be heard.
Just send an email to secretary@cftc.gov and let your voice be heard. Enough of the government trying to protect individuals from themselves.
I personally transfered my capital to UK.. when the edging was prohibited in the us i think that the us is just going to lose a lot of money and i dont think it will be as atractive as it is now you will need alot of money to make a decent living , and people will lose anyways it will just be slower and less painfull but who ever gets into this bussiness to be rich from one day to another is just eatting Cra……………..
If this policy passed, it will be the same as happen in era of JFK. In era of JFK, JFK’s goverment PROHIBITED u.s. investors invest in overseas. This can happen again in Obama’goverment. very bad unemployment happen the same in both OBAMA’s and JFK’s.
to COMMENT 19
if decrease low leverage of FX, it will destroy almost all of retail clients. THEN it is SO EASILY TO MANIPULATE MARKETS BY INSTITUTIONAL investors.
Then your words ” Forex due to the lower leverage then it will be more difficult for the ‘biggies’ to manipulate the market.” are in wrong understanding.
This has nothing to do with the market shares so much as making us all depend more and more on government largess. As long as we have a Social Security number, we are debt slaves and have no rights. Once they kill this industry, we will have to, in their minds, come to them for handouts and that just gives them more power over us. Every country with a central bank and some sort of social security system will follow US lead, and finding forex brokers offshore will get harder and harder. Welcome to the new world.
It shocks me that no one has worked out that the US futures exchanges are behind this.
i think your gov want to say indirectly”usd is not to be speculate”,but it’s too harsh.if i have the political power i welcome US brokers to come to my country and setup their business here :).i really admire how us fx traders unite and disagree with this new non sense rules,kudos guys.
Exactly WHO in the CFTC is proposing this garbage?
Sec. Stawick should’t hide them -
Find out WHO THEY ARE, (let me guess… democrats…)
AND KICK THEM OUT OF OFFICE!
DAMN SOCIALISTS!
I’m not a US citizen and I’m looking the move of the CFTC… In 2009, they started the erase the forex business : FIFO rules, hedging rules, leverage for the no-major currencies. And now the 10:1 leverage effect for the major currencies. In fact, it’s seems to be a political strategy to hidden the huge damage done with the subprime: FOREX is the guilty. It’s a wrong way because almost of the forex broker are regulated. The collateral damage realized by the CTFC is to give the full hand for the banks into the US area regarding the others actors around this industry. I hope the US will stay a democraty but actually it’s seems to be not the way !
When the hedging was removed traders could still cope with it. Now Commandment 10:1 leverage, what a joke of the season.
Simply put- it can’t work!!!!
Francesc - I’m behind you at the forex community all the way!
Forex people you need to voice your opposition:
Write them a letter, and call them on the phone
Let’em know what you think!!!
http://www.cftc.gov/contactus/index.htm
http://www.sec.gov/contact/addresses.htm
“If you would like to voice your concern for or against the proposal you can submit your comment to the CFTC by sending an email to secretary@cftc.gov with “Regulation of Retail Forex” in the subject line. You must provide your address and contact information in the email in order for it to be considered by the CFTC. Also, you should be aware that the CFTC has the right to publish your comments, and will publish your email on a public page on their website. The deadline for comments is March 13, 2010.”
For too long, these unregulated forex dealers have been taking advantage of customers who do not understand leverage. Not even the most sophisticated hedge funds in the world use 100 to 1 leverage. Its unimaginable how CFTC has let this run for so long. Over 90% of retail traders fail and this is how the brokers make money off them. I FULLY SUPPORT THIS REGULATION!
Decreasing the leverage to 10:1 means i have to put more money in to play the size i want. This will lead to more fraud as more money is deposited into the account. Wonder if the president understood this. Maybe he is being brainwashed.
I believe the US regulation agencies are looking to cover their failures by picking on the wrong crowd to cover the guilt and feel like they accomplished something. They are clueless about the consequences it will bring to the US nation all that loss of tax revenue/job loss (when most needed). This act of theirs is similar to an un-competent employee who “shifts paper around” upon hearing someone coming to their desk to show they are working. CFTC/NFA/SEC all of your actions are reactions to cover thy failures. I I will definitely be moving my hard earned money to an offshore broker, taking the risk of being scammed thanks for NFA/CFTC, now carry on shifting paper around to show like you’ve done something productive.
To # 35- I’m guessing you blew a couple grand, don’t know much about trading and your pussy still hurts.
Yes, maybe 90% of retail traders lose….but its because they give up and don’t treat it like a business and properly educated themselves. Are you aware that 50% of start up businesses fail in the first year and 95% (that’s right 5% more than your trader quote)fail within five years. Trading gives the little guy the opportunity to fulfill his/her wildest dreams! Don’t kill it. Any successful trader would disagrees with this regulation. So I’m going to boil it down to this: Don’t point your finger at the brokers and 100:1 leverage because you got your ass kicked. Take responsibility for your actions man. Anyone who supports 10:1 makes me sick.
This regulation will hurt lower capital traders the most. That’s the poor people, dude. Once again gaping the rich and poor even greater. If you want to “protect people” well make a regulation that you need a license to trade like driving a car you understand the risks and go out driving. You could die on the freeway though!!! But don’t make it to where you can’t drive. Or to where only the rich can drive for that matter.
# 35 time for some soul searchin’/ look for why you really have the opinion you do. But you have to look past your sore pussy!
To # 19 If what you say where true. 10:1 stops the “biggies” from manipulating the market. Well, what about the countries that don’t follow this gay regulation. They will manipulate you even more bud. They will roll you in shit! Think of the power it gives other countries.
And if you are a trader……a real trader….not a looky loo. you want volatility and manipulation keeps it lucrative and interesting. A little manipulation keeps me on my toes.
I fully agree with this proposal /albeit I think that it should be implemented in combination with other measures/. The answer why is hidden in the arguments of the brokers:
1/ 90% will go offshore - not if common measures are undertaken there as well;
2/ thousands of high educated jobs lost - where does the money to pay them comes from? The small traders are constantly legally abused in the form of slippages, requotes, freezes, taxes and other forms of stealing purposefully included into the customer-client agreement;
3/ industry worth over a billion - here is the temptation the bankers cannot resist - here the CFTC should strike most;
4/ traders will simply not accept 10:1 - traders do not like the trading agreements as well but accept it, so hiding behind them is hilarious. Why don’t you first elaborate on that - CFTC should also review that in the light of theis system adjustments
Brokers and other related forex intermediaries should get used to the normal lower levels of profitability and adjust their daily operations likewise
Even if it were pure gambling, why isn’t Vegas illegal? Our money isn’t even insured in the brokerages, and now we’d be required to keep large amounts of it in these unsafe environments. Sounds like the big boys are trying to cut out you and me… And how is this going to help the economy if everyone puts their money in offshore accounts? I think we have the right to do whatever we want with our money, and there’s certainly enough warnings, if you lose all your money due to leverage you shouldn’t be a trader, but you would have known this already by your demo account right? Just another case of everyone else getting new rules slapped in their face since some people can’t govern themselves. It’s not freedom, it’s not fair. This country has more laws and regulations than any other on the planet, Benjamin Franklin is turning in his grave. I’m 34 years old and have owned 2 sucessful restaurant/bars, I can’t believe uncle sam is now telling me how I can/can’t spend my allowance…
Gabriel Sallard (mauibartender)
I also trade a micro account, and after several years, i am finally having consistent success. Before trading forex i was a stockbroker for 6 years and a stock trader for 10. A very similiar thing happened to that business as well. Stock trading went from fractions to decimals in order to make it fair for the individual investor. It wiped out the entire stockbroker industry(with some help from the internet), and it made it virtually impossible for traders to make money. All those brokers, traders, and support staff wiped away. It took about 3 years for the ehole business to fall apart. Probobly one of the reasons investment banks started dabbling in exotic investments
I have worked for a number of forex dealers. The issue here is not whether the dealer takes the other side of the trade or not, or whether we should appeal to traders. What some people have to understand is the actual volume retail traders represent in the market, and that volume is less than 2%. The NFA wants to limit speculative leverage to 10:1, why, I still do not understand. At the same time when the deposit ratio for banks is around 10%. Now lets compare, a bank that moves billions on a daily basis is required to hold only 10% of that money, and then the trader….who do you think will place a greater hurt on the market if they loose the money. I say impose a minimum of 20% reserve requirement for banks, and limit their leverage to 5:1.
Lets examine 2007 collapse, we had some banks operating at 20:1 and 30:1 and ofcourse Lehman with a whopping 42:1, loosing billions on their trades, most of these banks went past 10:1 maximum that they should have according to law…….has their leverage scheme been reduced? I don’t believe so.
Major corporations are leveraging themselves out on a daily basis……example GM (who are actually forced to take on additional leverage because of unions), but I digress. When a car is rattling you don’t replace the fuel (customers) you fix its internal parts.
When people loose their money due to improper trading practices guess what……they don’t trade anymore, when a bank over steps its maximum exposure….they just ask for more loans and bailouts. I am proud to live in this country for the opportunities it represents, but it seems they are being slowly transferred to the few.
All one has to do is LOOK at who operates the NFA…who is on the “board of directors” to see who ALL the NFA rules benefit. Google it! Bankers and “financial adviser” firms. It is not an elected nor appointed government agency. It is a self-operated, self-regulating organization. A Corporation.
If any individual trader thinks the Forex deck is stacked in their favor, reflect on how many times “stop hunts” by huge single trade spikes hit your Stop Loss! NO guy sitting at his home computer trading causes those! Account-killer, trade opposing spikes originate from multimillion/multibillion dollar single trades by the banks!
Trade conservatively. Trade for baby, just a few PIPs per trade done very frequently. Only trade low Spread Pairs. Do not give the banks their Spread cut on as many trades as possible. They do all add up! Fight back by snagging those many, many tiny trades and making your living at it. Then, no matter what leverage ends up being in the U.S., 100:1 or 1:1, you can still feed yourself via Forex.
Protesting and hammering the powers at be with e-mails, letters, calls and faxes MAY halt this control of our freedom to trade the money we earn, but, in case it does not, which is highly likely, PLAN for the worst. Just fund your account as much as possible in the meantime, with either cash reserves you have on hand now, or, let it build by not withdrawing funds for the next couple months.
Complaining won’t solve it, but, massive inundation of objection to the rule AND, as a backup, in case protest does nothing to stop it, prepare yourself for accepting and profiting from the 10:1. I have done both of these already.
Never surrender. Never quit! But most of all, never allow yourself to be controlled by anyone’s agenda.
Good Luck to us all!
Supporting the NFA is simply a BAD IDEA. I was an MQL developer, and in the 2 weeks before these new regulations were announced, my arsenal of EA’s earned a 90% profit. These new regulations came out and completely collapsed my continued ability to generate such profit. Yes, to a degree they did “hedge.” So when their ruling came out saying it’s “not possible” to make profit hedging, my jaw simply dropped. I knew right then they were LYING to the public, and I could see then and can still see now that these rulings were solely to further empower retail brokers to squeeze more money out of the losses of their traders. They’re not preventing fraud with these rulings, they’re EMPOWERING it.