There is an obvious typo here, "The fact is 100 to leverage is very popular with the retail forex trading public." But due to the initial point, "And the first place theyâll go is to the United Kingdom where customers can trade with leverage as high as 200 to 1". Shouldn't it read like so, "The fact is 100 to 1 leverage is very unpopular with the retail forex trading public. They simply will not accept 10 to 1 leverage." ? Regardless, whether 100:1 is popular or unpopular, I agree it's valid to say, "They simply will not accept 10 to 1 leverage."
Heavy hitter time. I disagree with anybody who wants to place limits on the leverage I use - so no, I do not support the change. If you are in this business, then you had better know something about how to maneuver around in this business, or you should NOT be trading this business - it is just that simple. Making a consistent profit in the Currency Markets is doable on a long-term (career) basis, but ONLY if one spends the requisite time, energy and effort necessary to learn the ropes. Thus, all the whining and moaning that goes on about this market being more risky than others, is primarily the tag-line of those having lost their money BECAUSE they did not spend the time necessary to get up to speed on how things work here. This is a fast and dynamic market that at time, can move with light speed. You need to know when to be in the market and when to be out. You need to learn how to use a multiple position, multiple level trade strategy that enables you to mitigate risk at all times. But, most importantly, don't come into this business with real capital unless or until you learn about the natural tendency of the data that makes up the currency pair or spot you trade. You need to be intimately familiar with its natural tendencies and routine behaviors, so that you can use that information to develop trade techniques, methods, strategies and mechanical systems that enable you to profit, routinely, consistently and in any market condition regardless of volatility levels - or, in spite of them. Once you have accomplished that task, which takes YEARS, then you are ready to expect consistency in your trading of the Currency Markets. At that point, leverage truly becomes a friend, as you can use more of it, to produce geometric growth of capital - non linear growth. And, that is what will separate you from the rest of the crowd. So, messing around with my leverage is not going to make me a happy camper, because I've paid my dues and I know how to handle large leverage. I can work with 50:1, but I prefer 200:1, though 100:1 will do just fine. Dropping me down to 10:1 is asking for my very negative response in return. 10:1 is a joke, especially at the notional value level I trade with. Leverage is what makes this business worthwhile. Remove it, and I'll hold my nose as I had back over into Equity Options, growing nowhere near Geometric. I like Geometric growth. I've become accustomed to Geometric growth. Don't mess with my ability to grow my capital, Geometrically. People should just pay their dues by learning this business (that means the data that makes up your pair or spot) and the issue of leverage won't be the focus of bureaucrats and legislators, clueless about what trading means or how trading is done. This is just like the TSA getting involved in "security" of my private Jet. I don't need TSA's nose on-board my aircraft. I know how to secure my airplane, thank you very much and I do not have a death wish - so, I will not be flying with people out to kill themselves or anyone else. Just because I fly an aircraft that checks in over 12,500lbs MTOW, does not mean that I'm anymore a risk for "terrorism" than any large heavy commercial airliner. Bureaucrats, need to get a clue and stop trying to inhibit the freedoms of Americans. I'm sick and tired of the same old story - no matter the Industry. Regulate industry based on common sense protocols that are for the good of the people at large, but don't create mess where there is none, just so you can sit back and say you tried to do "something." Gain an understanding of the Industry that you are responsible for regulating BEFORE making rules that burn everybody. Heavy hitter done. Soapbox packed up.
I do hear what you are saying here, Pippi, but citing "consumer protection" as valid causality (if that is what you were doing), I think is the wrong answer. Consumer protection comes when spending the years necessary to get up to speed on how this business can be used as a tool to drive in consistent revenues, not something that can be merely handed down by bureaucrats having no clue about what are business is all about. At 10:1, if I am an unskilled trader, I still lose my capital. Whether I lose it 90 times slower, is a question that does have merit, no doubt. But, the point here, is that the causality for my losses is not the leverage I selected, but the fact that I lacked the skills necessary to know what I was doing in the first place. That's my beef with gray suit wearing pen jockeys that have never built a trading system nor ever taken the years necessary to study the market data as I have, yet feign to sit on their rear-ends and dictate to us what level of profitability and/or loss is acceptable to THEM. No, no, no, no, no, no! Let us not fall silently into the night. Let us not fade into the darkness of despair. Let us not allow our knees to be weakened by the pencil pushing rule makers having not one single clue about what we do for a living. Let us stand across the mountain tops. Let us reach out across the rivers, valleys and oceans. Let us cover the earth with ONE resounding voice: Not my leverage, not NOW and NOT EVER! Amen.
You shouldn't be allowed to trade with money you don't have. Simple as that. (I remember you idiots whining about homeowners buying homes they couldn't afford! Same thing).
Well, I smell bureaucratic stuff here, too. But, I could frankly care less about being put on exchange - in fact, I think doing so, would clean out most (not all) of the fake, phony, unethical, scamming intermediaries such as FXCM and that would only be a good thing - thought I think FXCM would be one of the last to fall. So, bring on the newly designed, fully Electronic Forex Exchange! I kinda like the way that sounds, to be honest with you. Just listen to it: The new EFE! Has a nice ring to it. But, even on the new "EFE" DON'T mess with my ability to grow Geometrically. That's the primary point. Mandating (and this is not what the CFTC is saying) guaranteed Counter-Party existence, is not my problem. Fooling around with the rate at which I have become accustomed to growing my capital, is my problem. Let us shout with one voice: It's the LEVERAGE stupid! If it was the Economy Stupid for Bill Clinton, then it shall be the Leverage Stupid for us. Not today, not tomorrow and not ever. I'm not going down without a fight. 10:1? Somebody hand me an interest earning checking account, cause it won't be much better!!! So, put me on the exchange - just don't mess with me Lever! :O
It's not about your losses, you moron. It's about you influencing the market with money you don't have. You shouldn't be allowed to do that. You shouldn't be allowed to push millions or hundreds of millions of dollars you DON'T HAVE. This is the root of all problems (commodities, currencies, everything) and needs to be taken away, and quick.
Oh, really? Did you pay cash for the house you live in? Did you pay cash for the car you drive? Most people use leverage or money they don't have to live their entire lives, for goodness sakes! What about that MasterCard you own - did you pay your minimum payment, or something slightly above that? Or, what about that Chevron Gas card you keep throwing on the cashiers table because you don't want to walk around with Fort Knox in your wallet to pay for the ridiculous gas prices now in major effect? We use leverage all the time. It is one of the major ways we grow our economy. Our current economic 'crisis' is not a problem of over-leveraged funds. It is a direct causality or poorly structured investments that were based on ridiculous expectations for underlying default risk - leverage compounded the problem, yes, AFTER the fact, but it was not the causality of the problem. Your Visa's rate is going through the roof right now. So, who is standing there telling credit card companies to stop driving up their leverage on us? This whole thing is backwards. When do We The People get to call the shots for once! Did GM die because it was over-leveraged? GM failed because it forgot what its mission on earth was all about - making cars that appeal to the largest segment of its most vital market. That has nothing to do with leverage, but when GM started to collapse (along with the rest of our economy) those things that were leveraged imploded like a house of cards. It is sort of like the orbiting electron about the nucleus of an atom. Take away the electron or disturb its orbit about the nucleus and the atom starts to decay - we call that going radio active. Remove the nucleus altogether (imagine if you could) and the "atom" stops being an "atom." Try to measure the orbiting electrons for their relative position about the nucleus more than once and you find out that you can never tell whether or not the electron took a particular path to get from point 'a' to point 'b' as you observe it on the perimeter of the nucleus. The electrons orbiting the nucleus of the atom, not the nucleus itself, is what gives the atom is atomic structure, virtually unbreakable without nuclear fusion or fission taking place. Leverage is similar in that it can (if properly understood and used) provide a platform (structure) for growth and expansion of capital, which means that economies of scale are better supported and better facilitated. Look, I don't have space here to get into a global economic forum discussion on the subject of leverage, but suffice it to say that most bureaucrats are clueless when it comes to regulating this kind of thing and most of their thought patters will be based more on politics than on mathematical protocol or what we as traders deem, common sense.
Moron? Money you don't have? Influencing the markets - LOL! All of these comments prove that you are ill equipped to handle a discussion on this level, so let me keep matters on a level that you can understand. First, I have three degrees including one advanced degree, so moron would not be the first descriptor I would give myself. Second, if the problem is not about "my losses" but about the losses of others, what's the point of making the comment? Third, what on earth do you think the Currency Markets are composed of anyway? Do you contemplate a market where people with Trillions of dollars sitting around inside a piggy bank called the FOREX? Do you comprehend the scale that is $3 Trillion per day? Are you aware of what moves currencies primarily to begin with? Money you don't have? Do you think before you type? Do you realize just how many times throughout the course of your regular work week, where you are doing exactly this? Can you then multiple yourself times the Millions of other Americans doing the exact same thing on the exact same 24hr clock? Then scale that number to the Billions doing the same world wide? Do you have the slightest clue about what you speak? Do Commercial Banks, Model Funds, Mega Financial Institution or even Central Banks have the ability to "manipulate" the currency markets indefinitely or even long-term with their buying and selling? The only way for a Central Bank to "manipulate" the currency market, is to "manipulate" its interest rates. And, when it does "manipulate" its interest rate, guess what, who follows that rate move - that's right, the guys controlling both Lots and Yards that don't have the money to do it. I think your basic problem here is that you have taken a myopic view of how the market works. These same institutions don't have all the money either as individual institutions because if any one of them were the singular holder of all currency in the world, there would be no currency "market" at all. Hello? A market, by its very definition implies BOTH a buyer AND a seller of the (and here it is) THE EXACT SAME INSTRUMENT! And, that my dear, dear, friend is what prevents the problem that you are attempting to blame on the 'guy' pushing billions with money he does not have. Think about it - think about it long and hard. If there were just one singular individual out there pushing around Carl Sagan Billions, the currency markets with "money he did not have," THEN that might be a problem. But, the fact of that matter is that there are MANY 'guys' pushing Carl Sagan Billions around and that singular fact is what you did not calculate in your rush to prove someone to be a 'moron'. Or, why not just go ahead and admit it: you want a cashless society. Look, I've got no problem with that. If that's what you want, fine - let's do it, but you DO realize what that means don't you. The entire nature of our world changes, including the lifestyle that you enjoy right now good or meager. What propels innovation and why is innovation so critical to any economy locally and the global economy on the whole? One word my friend: Leverage and I'm not even talking about financial leverage at this point, I'm talking about the kind of leverage that causes one to believe in a brighter tomorrow. What motives someone to get up in the morning, fight commute traffic, sit next to people on the subway system who think they are a 'moron' and then go to work every day for a someone they think is a 'moron'? One word: Leverage. You need not only a bigger grasp of the world you live in, but the right framework in which to deposit your comments.
People who are insisting that the 6E has low leverage and is not a suitable replacement are missing the point. The FX industry has no clout. The futures industry has a lot of clout. The moment leverage is reduced traders will have two options: trade with an overseas company or trade the equivalent futures contract. The FCMs will jump all over the potential customers and many of them will try trading the 6E which will dramatically increase the liquidity of it and other currency futures. This whole issue is an attempt by the Futures industry to take over the profits FX has developed over the last several years and increase the liquidity of the equivalent futures contracts.