Comment Text:
i0-001
COMMENT
CL-03617
From:
Sent:
To:
Subject:
Eric Frey
Sunday, January 24, 2010 8:16 PM
secretary
Regulation of Retail Forex
RIN3038-AC61
I would like to formally object to your CFTC's over regulation of the Forex market.
In particular the latest hairbrained idea of limiting leverage to 10:1
You aren't helping traders and making trading less risky by limiting their leverage. If the complete
morons who thought this up ever traded ANY instrument a day in their lives they would know that
leverage isn't dangerous, over use of it by un educated traders is.
Less leverage will force less educated, less experienced traders who want to trade to open their first
accounts with much larger amounts of capitol. Anyone whos been studying trading for any more than
ten minutes knows that most traders lose their first accounts, because they don't have the skill. Even if
they go on to be successful, they lose their first accounts.
I am a relatiavely successfull forex trader. I've been doing it for 3 years, and I started with a micro
account of a few hundred just to try it out live. I blew up my first three accounts, but they were small
amounts and I knew this was likely with my inexperience with live trading. Well, three years later and I
am consistent and could easily live off of what I make. My point?
This would not be possible with 10:1 leverage. It would force a lot of new traders to start with large
sums of money, which statistically, they will lose no matter the leverage ratio. These traders will likely
be losing large savings, life savings and never coming back to trading, because they have no more
money to trade. All because of your idiotic rules that are supposed to protect them. When if you just
leave it alone, they would lose substantially less.
Also, consider this: I and propably just about every other successful forex trader, that isn't a
millionaire, is going to take their bussiness overseas. I will not look for other U.S. markets to trade,
even if they have more leverage. Why? Because you morons will come along and regulate that market
as soon as I've learned to trade it.
So, not only will cause new traders to lose substantially larger amounts of money, you'll also cause
American traders take their business overseas, which WILL hugely impact the U.S. economy and many
forex related businesses in the U.S. will simply fold.
P.S. IMO you have absolutely no business regulating ANY market. Quite frankly I think the NFAjust
has an interest into forcing people out of forex in the hopes they will trade futures instead. (since for
some reason they allow them larger leverage) If this is the case you should be disbanded and probably
iailed. Don't be surprised if people show up to your offices wanting to show you just how they feel
about a government agency taking away their livelyhood.
P.P.S. Who regulates you? What are the requirments to be the cftc? Have any of your policy makers
even actually ever traded for a living?
