Comment Text:
i0-001
COMMENT
CL-06270
From:
Sent:
To:
Subject:
Ray Myers
Friday, March 5, 2010 3:49 PM
secretary
'Regulation of Retail Forex'
Mr. David Stawick,
I would like to offer my opposition to the changing of leverage for retail Forex traders from 100:1 to
10:1 per RIN 3038-AC61.
Such a restriction would make it impossible for me to trade because the margin requirement would
exceed my current financial ability. I have studied for over 2-years the trading of forex and have
managed to maintain my account without losing everything during the learning curve. I am just now
realizing some success and all the effort would be for naught if the leverage is changed.
Losses from trading do not come from excess leverage but from improper risk control. I have
experimented with several different forex trading platforms, and everyone has made available expert
advise for novice traders. The one most common lesson is managing risk by not committing more than
2% to 3% of an account on any one transaction. Using those parameters it would make no difference
what the leverage is, your account would be safe from a catastrophic mistake. By changing the leverage
you would actually force some traders into funding an account in an amount greater than they would be
able to afford losing. By having higher leverage I am actually able to trade a meaningful amount on any
one transaction without ever risking any more than whats in the trading account.
Forex leverage for small retail traders is not the same as the leverage being used by the big market
traders. In the case of Goldman Sachs for instance, they have all the resources of the bank plus the
resources of the U.S. taxpayer at risk on every trade if they don't manage the risk. A retail forex trader
never has more than the amount in the trading account at risk because the vendor automatically closes
all open trades if the account goes below the leverage amount. Granted there can be a rare case that the
price gaps past a stop, but even in those cases the vendor closes the account immediately.
I can see no benefit from changing the leverage, but it would certainly restrict access to Forex to many
people during a time in our country that opportunities are few and far between. Please leave the leverage
at 100:1 or greater.
Thank you;
Ray Myers
