Comment Text:
i0-001
COMMENT
CL-03162
From:
Sent:
To:
Subject:
David Baker
Saturday, January 23, 2010 7:57 AM
secretary < secreta ry@ C FTC. g ov >
Regulation of Retail Forex
Ref: RIN 3038-AC61
Dear Sir,
I Have just read a disturbing article on a popular Forex website (Forex Peace Army) which outlines the US
government's plans to tighten up controls and safeguards for the financial service industry. Whilst I support and
endorse fully any planned legislation that would help to protect the public from fraud and any criminal activity
designed to relieve them of their hard earned money, I am greatly concerned by the section of the draft that
proposes to protect the public from themselves.
By imposing a maximum 10:1 leverage capability in the Forex market the US government would be severely
limiting the potential for the small trader to compete in the foreign currency markets. I know that most private
individuals who trade currency instruments do not prosper particularly and that some do and will lose substantial
amounts of money, but it is their choice to do so. Nobody who starts trading Forex should be in any doubt as to
the high risks of this activity. Every document one reads regarding Forex trading clearly states the risk and the
high probability of substantial losses, and so it should. This is an example of good and effective government
legislation. If people choose to ignore these countless warnings that is up to them.
Speaking globally, Forex is the fastest expanding sector for private investment. This is because of the high
degree of leverage that the small investor can wield in this market, take that away and many risk takers will move
back to the casinos where the odds are weighted much less in their favor. But more importantly for the United
States, many people will simply close their US brokerage accounts and try and open them overseas. This would
lead to many American brokerages having to close and lay off staff, and would also mean that millions of dollars
will exit the US banking system and head abroad.
I have been trading Forex for about two years now. I am not particularly successful at it, but one day I may be and
I would seriously resent any government body denying me the right to perfect my trading skills. High leverage is
an intrinsic part of currency trading on the foreign exchanges. Yes it's risky, but like life it is a series of calculated
risks without which there really would be little point. By all means seek to protect me and others from exploitation,
but do not seek to protect me from life!
Yours Sincerely
David Baker (Forex Trader)
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