My point is, if you want to regulate a market so that it's being tradable as a market and not a casino, 7:1 should be more than ample.... because serious people don't treat it as a casino and they very very rarely use more than that.
...but as d08 correctly pointed out there are unfortunately not a whole lot of serious/smart people around...
It's not so simple. I trade multiple uncorrelated instruments, while no single trade has 7:1 leverage, combined I definitely could use more. Of course forex newbies with their $500 would simply leverage do the maximum or should I rather say "bet the farm" on every trade.
Yes, but it all comes down to the re-partition of the margin. If you have 100m$ of cash and a 500m$ worth of FX position, with 500m$ worth of Crude Oil futures, you should still be good because 500m$ of CL is regulated and is worth 4,000$ per lot or 4m$ for 50k contracts. Most institutionals wouldn't be impacted by this anyway because they can get leverage through their prime broker and have VaR limitations rather than "dollar leverage" limitations.
Better to impose min account size for retail fx. Much like the pattern day trader 25K min account. Its a nanny state rule but protects small accounts from lining the pockets of the bucket shop owners.
Isn't it ironic how we need to time and again protect most people from themselves. And most often it ends in a hypocritical and cynical discussion because the state permits alcohol consumption and smoking and legalized gambling, all pursuits that wash ample tax dollars into government coffers while other vices and pursuits are strictly illegal. It will always result in a dishonest settlement of sorts. Lottery is legal but lawmakers have an issue with little John blowing his 500 dollar account. I don't think any limitation on the demand side makes sense. Regulations should always target the supply side and weed out black sheep.
The U.S. govt has made it pretty hard for a U.S. resident to trade any binary provider other than the regulated Nadex and Cantor exchanges, so it's definitely doable. Between blocking your methods of funding your account and scaring the semi-legit guys straight it's nearly impossible to fund and trade an offshore binary account now if you're a U.S. resident. At this point if you are able to fund an offshore account it's almost a sure sign that they're a scam.
http://www.timesofisrael.com/the-wolves-of-tel-aviv-israels-vast-amoral-binary-options-scam-exposed/ An industry turning over hundreds of millions of dollars, employing thousands of people, is cynically cheating naive would-be investors worldwide via a range of corrupt practices. It is doing terrible harm to its victims, and it risks doing the same to Israel’s reputation
I don't trade forex, But when I started out first trading equities I was relatively small ($9K acct) and essentially "bet the farm" on each trade. I was up 25% at my peak, before losing 40% of my account -- from there I stopped trading and did some serious reflecting/studying for a really long time. ...you, or other people, may think i'm seriously Foolish or crazy ....but I still kind of 'bet the farm' on each options trade. -- But I'm much more knowledgeable and structured and wiser this time. My personal trading style is more of big money/returns, rather than modest investment returns, or capital preservation.