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Comment for Proposed Rule 75 FR 3281

  • From: Nicholas Saulsberry

    Comment No: 11
    Date: 1/14/2010

    Comment Text:

    Nicholas Saulsberry
    Thursday, January 14, 2010 12:11 PM
    Regulation of Retail Forex
    Patrick Henry one said, "Liberty or give me death!" before being lead off the gallows. Literally, I find myself in the
    same situation with the new regulation proposal of 10:1 leverage on the retail forex. Why are laws made but to
    protect the liberties and privileges of the American people. I do not see how this law protects the free markets of
    capitalism or the priveleges of the american people rather it circumscribes and is rules for the sake of rules and once
    again stepping on the "little man."
    I wish to convery to you that such proposal would:
    1. Without warrant strip the investor of the freedom to make his own financial decision
    and basically put
    the government in the role of a mother telling the "investor baby" what he can and cannot do. This labors under the
    delusion that "average Joe" does not know what to do with his money so the government must tell him.
    Steps on the little guy.
    A 25k retail forex account would be needed to start trading. I am actually fortunate to
    thave that income. Most average Joes do not have that much disposable income to trade. Which leads to the sad
    statement they hear all of their lives. "In order to make money, you have to have alot of money." This would limit
    the trading of forex to only the wealthy an attack on class.
    The investor would stand to lose more under this new regulation.
    Since the investor would be opening a
    much larger account than say a $1,000 or $500 account. The investor would stand to lose more, essentially at least
    20 to 25k.
    If the investor is going to lose his money, he will lose money wheter he has $1,000 or
    $20,000 this is simply augmenting the amount of unneccessary risk in his forex account.I
    have an
    acquaintance who unfortunately trades in the stock market and he requires that inane amount of capital to have his
    trading account, so he took out a second mortgage on his house to get the stock trading account. Which of these is
    more detrimental to the economy I ask you? The man who took out a second mortgage on his house and lost 20k or
    the man who lost $700 and learned forex wasnt the market for him.
    4. Makes U.S.
    forex brokers
    ,o,-competitive-Forex traders will simply open up accounts overseas where larger
    leveraging is allowed. I wouldn't be surprised if only a handful of retail forex accounts remained in the states with
    an inane 10:1 leverage. Why put such a large amount of your capital in a trading account at once when it is an
    uneccessary in another country.
    Takes the American dream out of America-
    Mine is a true rags to riches story. My mother passed away
    while I was attending college. So while I was going to school pursuing an architectural enineering major I was
    having to take care of my two sisters and get an extra job waiting tables to make ends meet. I took a stock options
    course to learn how to trade for extra income, but realized the incredible high capital startup requirements. And
    thats when I ran into forex. The whole summer I went to barnes and noble took my notebook and read Technical
    Analysyes of the financial markets by murphy, forex made easy, Profiting with forex, etc, I opened a demo account,
    paper traded for a few months, opened up my first account with $500. Its been 4 years and through careful study
    I've made a little over $200k in extra income to help care for my sisters and pay for my degree. I, a
    waiter, was
    able to take advantage of the markets and use fundamental and technical analyses to generate extra
    income for my family. Thats the American dream that Anybody can make it here.
    6. Why is there no cap to leverage on banks in this market and just the retail investor-If
    its education that
    you are worried about, I for one have definitely put in the time and study to be able to use proper risk management
    to not lose my whole account or overleverage myself. I would be much more open to a
    mandatory money
    management course
    or forex education course your broker had to provide you sponsored by the cftc at a
    reasonable cost of course so as to not stamp out average Joe reaching the American dream. Not to exceed $500 for
    the course.
    7. Spits in the face of freedom and says your too stupid to know what to do with your money.