Comment Text:
i0-001
COMMENT
CL-01853
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Sent:
To:
Subject:
jj [email protected] on behalf of
John Jagerson
Thursday, January 21, 2010 1:39 PM
secretary
Regulation of Retail Forex
In general I feel that more maturity in the forex industry is needed but we don't feel that the new
leverage ratios are likely to do anything more than drive accounts to overseas dealers.
A traders can lose everything with 10:1 leverage almost as efficiently as 100:1 leverage. If the CFTC is
serious about trying to help traders survive and thrive in the forex the real missing component is
information and transparency.
Traders would act more rationally if forex dealers were required to disclose at least three things about
their account holders on average.
1. What is the average account balance, account lifespan and leverage being utilized.
2. What is the correlation between the use of high leverage and large losses
3. What is the correlation between trading frequency and large account losses
Anyone with any long term experience in this industry knows the answer to these questions - including
the dealers. But what retail traders get instead is overgeneralized "education," hype and disclaimers too
obtuse to convey anything practical.
Baby-sitting traders with account constraints like this will merely drive them into the arms of less
reputable, pandering and potentially insolvent foreign dealers. Real information, transparency and
education are the only ways to change behaviors and help traders do better. This proposed rule change
does none of those things.
John Jagerson
Learning Markets, LLC
