Comment Text:
i0-001
COMMENT
CL-01434
From:
Sent:
To:
Subject:
Joshua Glazebrook
Thursday, January 21, 2010 12:52 AM
secretary
Re: Regulation of Retail Forex
I forgot to mention the bit added in red.
RIN3038-AC61
To VVho It May Concern,
Information has been going around that the CFTC are going to introduce a leverage limitation
of "10:1", on every currency pair including the most highly traded pair like the EURUSD,
USDJPY, GBPUSD, AUDUSD, USDCHF, USDCAD, EURJPY or GBPJPY.
To put it bluntly the people who proposed this idea within the CFTC are flipping nuts. All you
are going to do is close down legitimate USA based forex businesses and limit the abilitieis of
both trader and retail forex broker alike. I believe an internal investigation to see whether any
CFTC proposer of this 10:1 leverage limitation has any vested interest in off shore forex broker
businesses, because it is obvious to me that these are the people who stand to benefit by such
an excessive, extreme ruling.
If you want to stop illegitimate forex dealers from doing illegitimate stuff, have a tick analysis
rule to prevent fake slippage / gappage in the bid / ask quotes. Or you could have no requote
rule allowed in the retail forex market as they are not trading in the complete market but a sand
box market where slippage/gappage is a made up scenario.
Maybe if your aiming to protect the new trader, the new trader must take a test that
demonstrates that they understand the effects of leverage. Don't screw up an entire industry
because there are a few stupid people that don't understand the risk they are entering into.
There are many brokers around the world now offering more than 100:1 and traders will very
quickly pull all there money out of the USA brokers and migrate to international brokers if a
10:1 leverage limitation or even a 50:1 leverage limitation is introduced.
As a customer of a retail market broker I enjoy high leverage (200:1 (as I have now moved to
Australian brokers and was with a USA broker (IBFX) due to the last lot of stupid laws that
were introduced)), as I have a high tolerance to risk and understand the negatives. However,
the high leverage and the significant trends found in the forex market makes it possible for
every person to make a living out of trading and not just the big financial institutions.
A 10:1 leverage limitation on major pairs or even the larger crosses, is just plain stupid. A 50:1
leverage limitation isn't good enough for most traders.
Major USD pairs in my opinion include EURUSD, USDJPY, GBPUSD, AUDUSD, USDCHF
and USDCAD.
Significant crosses include: EURJPY, GBPJPY, AUDJPY, CHFJPY, EURGBP, EURCHF,
GBPCHF, EURAUD and GBPAUD.i0-001
COMMENT
CL-01434
Yours sincerely
Joshua Glazebrook
See what's on at the movies in your area.
Find out now.
