Comment Text:
i0-001
COMMENT
CL-03572
From:
Sent:
To:
Subject:
wj [email protected], com
Sunday, January 24, 2010 5:10 PM
secretary
Public Comment Form
Below is the result of your feedback form. It was submitted by
([email protected]) on Sunday, January 24, 2010 at 17:10:27
commenter_subject: Regulation of Retail Forex - RIN 3038-AC61
commenter_frdate: January 20, 2010
commenter_frpage: Page 3283
commenter_comments: I am writing to you with great concern regarding
the proposed regulations contained in the Food,
Conservation, and Energy Act of 2008
(RIN3038-AC61), also known as the "Farm Bill". The
portion of the bill limiting foreign exchange
trading leverage to 10:1 will decimate the industry
in this country and effectively put legitimate
traders like myself out of business completely.
I applaud the efforts of the CFTC and have welcomed
recent changes in regulations intended to increase
protections for inexperienced traders and naA ve
investors. The new anti-fraud measures, concern
for customer complaints, and the effort to reduce
predatory practices are all laudable. But this new
concern with leverage in foreign exchange accounts
is not only counter productive, it will make it
impossible for retail traders to do business.
The nature of foreign exchange makes it quite
different than trading the securities markets. I
have been involved with both for many years.
Leverage of at least 100:1 is a necessity for any
retail trader to realize a sufficient profit to
trade the market at all. And contrary to what one
might think, the limit on leverage below these
levels will actually put more traders into risk.
Prudent trading requires that an account not be
overtraded and that transaction sizes not exceed
one or two percent of account net balance. At 10:1
leverage, this prudent sizing of trades would be
virtually impossible for most traders, forcing themi0-001
COMMENT
CL-03572
to risk dangerously high portions of their funds.
Without going into the subtleties of trading here,
the proposed leverage limits ~vill cause many
traders to incur margin calls leading to failed
trades that would othe~vise be successful. And the
less experienced traders, the ones this new
proposal is intended to protect, will be forced
into trading positions that would heretofore have
been considered irresponsible, leading to quick
losses and empty accounts.
I urge you strongly to reconsider this new
regulation carefully before taking further action.
Thank you.
commenter name: Wallace H. Jenkins
commenter firm: Rivendell FX
commenter withhold address on: ON
commenter addressl: 40 East End Ave. #2H
commenter_city: New York
commenter state: NY
commenter zip: 10028
commenter fax: 212-879-8984
commenter~ohone: 212-879-8984
