Video Response: CFTC Proposed FOREX Leverage Change

[ezhilpa]

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[mahakuet]

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[flyingdutchmanhero]

glad i´m living and trading in germany ;P

[RandomShellAccount]

Here's a case in point.

I was going to use the LeverageFX software once I practiced more on trading. Wanted to give myself a few months before I jump in. By nature I'm conservative with money and only intended to minimize loss and play the market by the book.

BUT NOW, I find that leverage is only 50:1????

So I was thinking open my first account with $2,000. Nope, I would make PENNIES per pip with a conservative 2% investment on trades.

Guess this game is only for those with 20 GRAND now.

[ARTaken007]

Wayne, would you do a video response about recent changes 10/18/10 the CFTC has made to the retail FOREX industry.

[drfrankm]

Great commentary and I agree. This is what I have been telling people too. This is one of the reason when I started my forex brokerage firm that I opened it offshore.

[amillioncars]

Will the earthquake affect the nzd as of 9/4/2010

[gizmobozz]

Here in Japan some brokers offer a 50 to 1 for small accounts. I've seen brokers offering 1 dollar per pip mini accounts too. $stop loss is the secret to stay in the game $

[TheDystopiaInside]

I spent some time demo trading and studying forex back in late 2008 - mid-2009 but never got in with real money.

In the meantime I've found other sources of income, but I may get back into it. The way I see it, I want to know what's going to happen with this CFTC thing, and also the market seemed hard to trade/long-term range-bound following the initial rise in the USD in late 2008.

Anyway, I don't think they should impose this limit, it would hurt many who already know the risk involved.

[ILuvTrading]

Where is my video response? I left it twice this past week. Everybody- click on my user name and see my RESPONSE to the CFTC Ruling!!!

[fxbootcamp]

I don't know. We certainly didn't block it.

[ILuvTrading]

I just did the video response again. the message says it will be posted when the receiver approves this video response. Maybe its the youtube being buggy, not sure. Anyways- i have heard nothing but great things about fxbootcamp..cheers---Virgil

[adamandalyssa]

I have been a forex trader for over 4 years. I also sell on eBay. Quite frankly, I have lost more money from doing business on eBay than I have from trading in the Forex markets. Government needs to get out of our lives and quit trying to control everything we do! I absolutely will go over seas to do my trading if the CFTC succeeds in foisting this government control on us. I'm upset that I can't have 200:1 any more. 10:1 only will be outrageous in my book. Back off CFTC and leave us alone!

[qualm43]

The good news is: we can just wire our money to the UK and trade from those brokerages. Not even a problem at all. Nice job USA at taking even more money OUT of the US economy.

[edmondublianda]

I hope the CFTC can sympathize to all retail fx traders who make money at home or while travelling..it is a great life to be self employed and I believe it's good for the economy of US

[ILuvTrading]

Guys, under the proposal the CFTC states on page 11

"Under current practices, customer

positions are usually closed out once

the losses in an account exceed the

initial investment. However, if, for any

reason, the positions are not closed out

at a zero balance, the customer could be

liable for additional losses."

[xtgto]

Who made the CFTC above Congress, passing laws which restrict our liberties and right to the pursuit of happiness? It'd be nice to know who they are working for, because it is not for the traders. Their intention is clearly to limit our opportunities to make money.

[EwenMc]

I do NOT want this CFTC proposed change to limit leverage to 10:1. I believe that the NFA has done a credible job in protecting and educating the public to the risks while limiting the leverage to 100:1. "Mini" accounts of 10:1 are available to everyone now, anyway.

America has much to lose if the proposed changes become law. This will encourage Americans to go offshore where they may be less protected, thereby defeating the intent of the proposed changes. HANDS OFF !.

EwenMc. California.

[krewsey]

There are so many other areas that the Government could be looking at to protect the public. This is the last thing they should be trying to change. I haven't seen any stories on TV lately about FX traders sleeping in their cars in car parks because they lost all their money. I have seen stories about people in the real estate market having to do so though as a result of their properties not being worth anything anymore .. and there are so many other examples .. Enron .. etc.  Why choose this

[freeflyva]

This isn't about reducing leverage. It's about Obama and his crew getting retail traders out of the game. The same as DeFazio's proposal to put additional transaction fees on buying and selling; Unfortunately...these clowns don't understand..A) It's 2010 and you can easily trade foreign markets where you won't be penalized and B) The Symbiotic relationship between speculators...liquidity..and market action. They also fail to understand less people in the market means MORE easily manipulated.

[gbrooks799]

It's a JOKE! Another intrusion into our freedom as Americans...

[nooneyet]

The only effect achieved by such a change will be less tax money for the U.S. and less money within the american economy. Traders can always trade offshore and let foreign companies earn commission/spread revenues. (*Or in the case of the more common scenario, of a trader losing his money at a market-maker's place, it's not just commission/spread) - so keeping traders, both profitable ones and less responsible ones, at well-regulated, American-tax-money-paying companies, is good for America.

[Traviaso]

I vehemently oppose this crap... Isnt this supposed to be America "the land of the free" where is our freedom to choose here??? what are they thinking? oh wait, they arent. Big suprise : \

[haritashi]

I talked to someone from the UK and asked if they thought the government there would ever jack with their trading in the UK and they said no way because they love their trading there and trading is huge in the UK, so if they block us from having offshore accounts I will try to move to a more free country.

[haritashi]

That's a great point if they really want to protect the trader then protect our funds at the brokers etc and get harsh on stop hunting etc, but they really don't want to protect the individual - they want to kill forex so people will put their money back into futures and the stock market. You want real risk? Just go put your money in the stock market and see how you feel when you wake up the next day and that company's stock is zero because it went under.

[DojiSan]

plus stock brokers don't protect you from a margin call. they will let it keep going down into negative!! then they call you saying you owe them money...in forex you are protected against negative drawdown.

[proglet1]

Agree, I'm against the change myself, even though I have already moved my accounts to the UK due the new leverage regulations implemented in the US in Nov. 2009. So, even though I will not be affected by it, this new proposal will only drive more financial activity to foreign competitors, forcing the brokerage houses in the US to reduce operations or shut down here in the US.

[haritashi]

I've heard you might not be as safe as you think as there is talk that they may try to block US citizens from having offshore accounts, so this will affect every trader in the US.

[pipnainteasy]

CFTC and NFA need to allow U.S. residents to trade CFDs and Spread bet. They want to control us and are afraid that they will not be able to collect their precious tax dollars. How does the CFTC and NFA really protect us anyhow??? My money is not protected at a Forex broker. IF they want to impose harsh regulation like the equities markets then we should have our money protected like in the equities markets.

[haritashi]

If a trader is too dumb to know how to control risk thru stops and lot size, then any crazy rule that the CFTC passes isn't really going to help them in the long run anyway. CFTC - it's not fair to punish people who know how to trade just to try to help idiots that are going to lose no matter what you do anyway. LET THE PEOPLE HAVE THE FREEDOM TO TRADE!!!!!!!!

[haritashi]

... You control risk thru your lot size and stops - that's it, but most people don't understand that. I've only met 1 person that actually understood leverage and that was Rob Booker. Also what most people don't understand is that the lower the leverage, the higher the chance of getting margined out unless you want to work hard and stay up late to just make 5 cents per trade, so the lower the leverage the more risk you actually have per trade.

[haritashi]

The funny thing is most people don't even know how leverage works. Higher leverage has nothing to do with risk. If you've blown your account it's because you're an idiot and you don't know how to trade, so don't lamely blame it on leverage.(con't)

[haritashi]

It's too bad that our senators and congressmen/women don't give a rats youknowwhat about the people otherwise we could get help from them. They are only interested in what affects their re-elections - and a big part of that is campaign money, and guess where that comes from - the likes of people from Wallstreet and the CFTC(Crazy Freakin Tardo Chimps), so guess who they're going listen to - not us!!!

[JerryLeeC1]

Ctd.

You can regulate trading, but you have no Constitutional authority suddenly to make it too expensive for most American now engaged in it.

The skills we have acquired with much learning, practice, and risk would suddenly become effectively worthless.

If so, I will file suit against you under my 7th Amendment Right.

[JerryLeeC1]

If you raised the horse racing minimum bet from $2 to $20, you would make it truly the Sport of Kings. Most tracks would shut down due to lost attendance and wagering. No more Seabiscuits to inspire the down and out of the present depression.

Lotteries became legal because of the blue collar vote. If you raised the ticket price ten-fold during the Obama administration, a lot of Democrat office holders would be fired by their core constituency.

[haritashi]

The CFTC(Crazy Freakin Tardo Chimps) would be up in arms if congress came in and severly restricted futures trading! It would be funny if they got a taste of their own medicine. If the shoe was on the other foot THEY certainly wouldn't like it.

[forextrader43]

Behind you all the way Wayne!

100:1 Leverage should not be a problem at all.

The CFTC might want to design an educational test that anyone (in the USA) should be advised to take explaining what leverage is as well as other risks that are involved with trading in general.

Thanks for your time and energy !!

[haritashi]

I've already written the CFTC(Crazy Freakin Tardo Chimps) 2 emails and have sent a snail mail. I've also written our 2 Senators and our Congress rep here.

[PortfolioManager1987]

I am a retail forex trader from and living in Australia. I believe CMS FX (major New York FX broker) has followed CFTC/NFA guidelines and reduced their offered leverage from 400:1 to 100:1, and even though I opened an account with them recently -- I have decided not to send my initial funds and I have also decided not to trade with CMS FX but rather look offshore to FX Pro, for example (European, 500:1).

This industry ought to be left alone. I strongly agree with this video. God help us.

[haritashi]

Automated that's a great point!!!!

[haritashi]

I feel exactly the same way!!!!

[haritashi]

The CFTC(Crazy Freakin Tardo Chimps) might even try to block us from getting offshore accounts so then we would have to move out of the country. Friggin' jerks.

[jeffreyshumaker]

Politicians trying to blame people actually making money, because they are incapable of doing their job properly. Hello UK

[haritashi]

Traders will also start losing more now because there will be a greater chance of getting margined out on each trade with only 10:1. The CFTC is only out to protect their own interests which is futures traders etc.

[ForexHead]

You are absolutely correct. I do not understand the motivation of the CFTC. It cannot really be to "protect" the retail trader, because limiting leverage will not do that. It will, as you suggest, drive the retail trader offshore or out of Forex trading. What is the REAL motivation of the CFTC? Whom are they really trying to protect? Certainly not the "average" American retail Forex trader.

[haritashi]

I've already emailed and mailed the CFTC and I will also write my state's senators and reps - maybe it will help.

[fxbootcamp]

This is true. In the United States, the CFTC has already impossed a leverage limit of 100 to 1 on all major pairs and 25 to 1 on all other exotic pairs.

[arjun12345a]

CFTC is governed by Idiots and dumb fools. We all traders use forex for living. I think they are not happy with this

[arjun12345a]

I did a superb job in the past by choosing brokers from UK. I am proud of myself. Plus, i will make sure now never to deal with any firm in America, because policies of American administration cannot be trusted

[arjun12345a]

We will leave Forex forever if they brought it down to 10. At the same time I will take it as personal responsibility to discourage every other person to enter forex market. Take it as a waring. Dont even dare to bring the leverage down

[haritashi]

Another problem is getting an overseas account might not help because I've heard they might block US residents from being able to get an overseas account and not let them keep their existing overseas account. Then the only way we could trade is to just leave the country, which I might do anyway since we seem to be losing our freedom here day by day anyway.

[arjun12345a]

haritashi-If wotever you are saying is right, then it will be better to leave united states

[FastPips]

I feel they are trying to "scare" us with this shocking recommendation, but will "settle" with 50 or 100:1 in the end as a "solution". This will still hurt those who use 200 or 400:1. That's why I never got registered with the US and only trade overseas. Nice video.

[Camilo2002xxx]

Very well said Wayne. This stupid measure will only promote US based traders to open accounts based somewhere else.

[gkaya]

Wayne,

While I agree with what you have said, one more thing could be added which is CFTC's decision may intend helping others, it also removes responsibility of OTC traders a lot. It sounds like its a reaction based decision instead of a a "sound" decision. Glad to be Canadian in this case.

[haritashi]

I've sent and email and a letter to the CFTC voicing my opinion about this and protesting this oppression. I don't know if we can really stop it though. They are highly motivated to get rid of forex to help their buddies with interests in futures so then they want people putting their money into futures and not forex. Wish there was a separate entity that only regulated forex so that it would be in that agencies interest to keep forex healthy - but that will never happed so we are hosed.

[sniperforextrader]

echshmidt said -"essentially destroying the retail market in the us"...I resume all those rules to that phrase...they are destroying the retail market and with it the dreams of many of us.

[haritashi]

You want risk? Try putting your money in the stock market - why don't they shut that down? What happened to this country? Every day we lose a little more freedom. Even communist countries let their people trade. This is insane. The founding fathers would be appalled at the loss of freedom this country has experienced in the past 10 years. LET THE PEOPLE TRADE!

[echschmidt]

wayne

great points

well presented

somehow the powers at be think that they are protecting forex traders by essentially destroying the retail market in the us

again thanks

[knoxxa]

Thank u

[jwfundsd]

Thank you Wayne for posting this video. I agree with you and already sent an e-mail complaining about this.

[Mattwomack]

JM 4X Thanks Wayne, I agree, does this get passed by Congress/ Are we still a Democracy?

[denniscye]

Bye bye US brokers

[jlshotpost]

Perhaps the CTFC and the NFA should place more emphasis on clamping down on the rogue brokers and scams that are literally sucking this industry dry before they pass judgement on the rest of the trading industry who generally take a responsible approach to trading with leveraged accounts and who use and follow the conservative methodology actively promoted by companies such as FX Bootcamp.

[jlshotpost]

Two excellent points well made Wayne both if which I agree with. This is a very short term view by the CTFC and the NFA should do all they can to apose this decision as not only would it harm the retail trading community but the otherwise fragile US economy also.

[nirgle]

If these proposed changes are designed to decrease risk for the average retail forex trader, consider that in order to continue to make the same amount of money using 10:1 instead of 100:1, they will be required to have 10 times the amount of margin with their broker at any given time.

That would increase the risk of our money disappearing literally overnight in the event the company disappears, rather than disappearing slowly over time like it happens to 95% of us now.

[z978ady]

Dukas in Switzerland and Alpari in UK?

[SpacenJasset]

10:1 Leverage seems rather severe I hope the CTFC dont do this. I cant really see what material advantage there could be by a move. Along with the NFA changes it all seems to be quite a disaster. Lucily, I live in the UK and can utilise 500:1 leverage. That's irrelevant though, as my trading is always risk managed to between 1-3% and so I don't have to consider margin requirements. But 10:1 means you have to risk less per trade, even if you are more experienced.

[mutronium]

i agree... this law if passed will only make american traders less safe by driving them to juridictions that don't have cftc protection and it will destroy the retail forex market in the u.s.

[lilmurfer]

thanks

[steven2hearts]

Couldn't agree with you more! I moved my account off shore when they made the hedging restrictions. This new proposed rule will only hurt brokers and jobs here in the USA. They just don't get it - the government is not supposed to be our nanny. They'd better learn this lesson soon or 2010 will be a bloodbath for the dems. Get out of our lives and let the individule decide what risk they are willing to take or not. Pure and simple, it's none of the governments business!

[bluestar007]

It's not about them not understanding this, it's that it's very profitable for them to do that, since growing their bureaucracy grows the pockets of the select people who are in those roles. You are naive if you think the government will simply "understand" that they should not be interfering too much with people's affairs. It's all about the people - if the individuals, collectively, allow them to do that, they will take as much as they can.

[HeliFreak42]

I will absolutely move my money offshore if this passes.

The government has to stop these stupid and intrusive policies. I have the freedom to spend my money how I see fit.

[dtraindoes]

Did you write a letter to your Congressman?

[MsDawdawdaw]

10:1 leverage is enough!

[Scarlett1214]

NFA/CFTC is NOT interested in protecting the retail trader Not only are they going to push this down our throats but as of April 1 they are going to bully the offshore brokers to hand over the names of US traders just as they did in Switzerland last year They will harrass the offshore brokers to the point that brokers will close the accounts of US traders putting us virtually under house arrest

Read the account of FXCM and why they closed all of the accounts of traders in BC, Canada

[rodelcarpi]

Thanks Wayne i hope they consider your opinion and forget about that.

[kendallco]

Yes Wayne... I agree with you on this one.

Fortunately my forex broker has an office in London and it is very simple to transfer my account..

To bad CFTC is not more responsive to constructive criticism from their paying customers!

[domg1955]

I'm going to transfer my account to the UK. The last change on margin req now 10-1? Let me lose MY $ my way. Thanks Wayne

[Dresden718]

Thank you for making this video. Keep up the good work. I love the work you and FXBootcamp do.

[Crantube44]

Very good video, this leverage adjustment is totally overboard and will actually drive tons of money away from the US. Don't like 100-1? Ok move it to 50-1 then. Anything beyond 50-1 will cause a mass exodus of US forex traders to foreign brokers for certain where novice traders will end up quite often with shady brokers to begin with. Dumb Dumb Dumb idea this is, it's so overboard it's comical.

[kirilpc]

tnx :) Im from Bulgaria and I trade with leverage 1:500

[fxbootcamp]

I recommend that you lower your leverage... just not to 10-to-1. But that is just my humble opinion. May the pips be with you. - Wayne McDonell

[Puma2113]

Cheers Wayne for sharing your voice. We agree with you 100%

[cliffvitale]

Thanks for speaking for us .