Comment Text:
i0-001
COMMENT
CL-01500
From:
Sent:
To:
Subject:
Manfred
Thursday, January 21, 2010 2:43 AM
secretary
Regulation of Retail Forex ¯ R1N 3038-AC61
Dear Secretary Stawick,
I wish to record my strong objection to the proposed CFTC regulation RIN
3038-AC61 to limit retail Forex leverage to 10:1.
I firmly believe that the 100:1 leverage available at present, which as
you know has already been substantially reduced recently is the minimum
that makes retail forex trading feasible in the USA.
Since I am not a US citizen I am somewhat indifferent to whether the
CTFC choose to kill the US retail forex broker industry with such
legislation since I will simply move all my US held trading accounts
elsewhere and shake my head at the stupidity of government intervention
in private enterprise.
However, I do like the internet infrastructure available in the USA and
the performance of the trading systems I am obtaining so do not desire
to be inconvenienced/forced into making the change by foolhardy
regulations. As it is already I will not be opening up any further US
accounts due to the continuously moving regulatory goalposts.
I mean if the ambit is to reduce retail traders from blowing out their
accounts - well this is likely to accelerate the process since retail
traders will now be even more likely with their smaller accounts then
having more of their capital tied up in margin and with an adverse
market move having insufficient margin remaining hence resulting in a
margin call much sooner (probably 10x sooner!) than would have been the
case when trading at 100:1.
Ignorant retail forex traders will find ways of losing all their capital
with or without the CTF C's assistance!
Reduced margin fixes nothing. Educating traders about position sizing
does. Rather enforce 0.01 lot increment sizes so that small traders can
position size appropriately.
Regards
Manfred Paeper
