Comment Text:
i0-001
COMMENT
CL-03030
From:
Sent:
To:
Subject:
ODS-Michael
Friday, January 22, 2010 9:24 PM
secretary
Regulation of Retail Forex
To whom it may concern:
I am writing to you in opposition to the i0:i leverage proposed restriction. My guess is that a relative few retail
Forex traders have caused this proposal to come to the forefront of the CFTC. As with most government
intervention for the minority, the unintended collateral damage for the responsible, educated majority is far
worse the perceived benefits
This
10:1
leverage will have negative impact to the majority of successful traders that are actually making money
in the Retail Forex Market. I say the majority because it would not be a thriving vehicle for trading if the
majority of traders were losing money. I can envision at least 2 negative unintended consequences:
More money would be at risk for all those successful traders that are using their current leverage
appropriately.
This will prohibit many (like me) from ever realizing my dream of being independent of economic
downturns and being subject to an employer. I spent several months paper trading before I started to
trade. This involved me making a lot of mistakes (i.e., resetting my paper trading account) along the
way but has proved to be most beneficial after I went live with real money.
Instead we need to be proactive vs. reactive. Enforce education and certification for retail traders. As I
indicated, I paper traded for several months before I had any sort of confidence I could trade using "real"
dollars. This education could include some of the following:
¯
Required courseware that certifies a budding retail trader understands the risks of trading Forex using
existing leverage levels
¯
Videos show both the "upside" of a good responsible trading and the "downside" of ignorant
uneducated trading.
¯
Require Paper Trading results for a I. If a retail trader requires a reset of their account, they must start
over. The retail trader must exhibit they can make a certain percentage (e.g., 5%-10% - better than they
can do in the bank) on their account before they are certified to trade live.
would suggest 2 types of paper trading accounts: pre-certification and certification
¯ Apre-certification
account would be free and could be reset as often as desired
¯ A certification
account would require a fee (say $50-$100 or some percentage of the
starting capital) for the initial "funding" and any resets that follow during the
certification period. This would force the budding retail trader to take the paper trading
seriously.
All of the above puts the responsibility back on the retail trader and allows other successful traders to continue
being successful. If after going through the above steps and the retail trader still fails then they probably were
not following what the exhibited during their education and certification process.
A collateral benefit could be a spawned educational industry for educating (not selling) Forex trading as a viablei0-001
COMMENT
CL-03030
method of generating additional income and tax revenue for government.
If you restrict the leverage you have to potential of adding to the current unemployment rolls for those that will
no longer be able trade using 10:1 leverage.
Thanks,
MichaelCatmull
