Comment Text:
i0-001
COMMENT
CL-05523
From:
Sent:
To:
Subject:
[email protected]
Monday, February 22, 2010 8:12 PM
secretary
Regulation of Retail Forex
Dear CFTC,
I am writing to you regarding the "17 CFR Parts 1, 3, 4, et al.
Regulation of Off-Exchange Retail Foreign
Exchange Transactions and Intermediaries; Proposed
Rule."My understanding of the reasons given by the
CFTC for this proposed rule is to protect the retail forex investor. I am a retail forex investor, and I can tell you that
this rule does not protect the retail forex investor, but instead does harm in limiting the options available to the
retail investor. The only way to protect oneself when investing in the forex market is to use proper risk management
and position sizing. If a retail investor is not implementing risk management or position size management, they will
likely blow up their account, regardless of whether there is a limit on leverage of 100:1 or 10:1 or even 1:1. It is
not leverage that gets retail forex investors in trouble, it is improper risk management. If the government wants to
offer protection to the retail investor, it should encourage education. Education is the only really effective way to
teach retail investors how to trade properly and with proper risk control.
Additionally, it makes no sense at all for the CFTC to propose leverage restrictions that are much more restrictive
than the futures market makes available. Retail investors could also invest in currency futures contracts where
leverage allowed is much higher than the 10:1 being proposed for forex. These two markets are equally as risky, so
if you do make a proposal, it should be to harmonize the leverage offered to retail investors in the futures market
and the foreign exchange spot market.
As a retail forex investor, I stronqly disaqree with the proposed rule. Please do not reduce the amount
of leverage the re.qulated forex brokerage firms can offer to retail investors.
Or, at the very least, align the
leverage allowance with that which is currently allowed in the currency futures market.
Thank you.
Sincerely,
Steven Mathison
Steve Mathison
1900 Harpers Way
Torrance, CA 90501
PH: 310-781-5825
