Comment Text:
i0-001
COMMENT
CL-01171
From:
Sent:
To:
Su bject:
Eduardo M Morales
Wednesday, January 20, 2010 9:25 PM
secretary
Regulation of Retail Forex
Hello my Name is Eduardo M. Morales from Puerto Rico, Iam Forex Retailer Operator and Iam starting to
management some accounts.
I am agree to regulate retail forex because it add Credibility and profesibal to the market.
I am agree to the all new proposal except one.
I Strongly disagree to reduce leverage to
10:1.
I understand that you want to reduce the risk exposure
of the Investors, but actually this proposal do not reduce risk- exposure.
Here are my reasons:
1)
You are increasing the risk of the some clients -
Because with this leverage
(10: 1)
the client need
a
risk- Capital of $20,000 to have a standar account. When now they only need a
Risk-Capital of $2,000.
In
order to participate in Forex, the clients have to risk more money,
increasing the risk-exposure about
10
times,
may be more.
2)
You are taking out a lot of Clients (including me and my clients) -
There are a lot of people that can
afford to lose $2,000 - $5,000,
but not $20,000 or more.
This people may be dont have $20,000 in a
account. This people understand the risk of forex and they can afford to lose $2,000.
Note:
Personally I dont have $20,000, but I
have $2,000.
Right now I operate forex and I am making some
Money, but if you reduce the leverage I can not trade any more. I can not afford to lose more than $2,000.
3)
Remember,
the risk expose really only depends of the trade size and the pips I am agree to lose in a
trade, not the leverage. The leverage only determinate The minimun need to open a position and have
account. Not The risk- exposure. Righ now I can open a position of i Lot ($1 per pip) with $160.00, if I lose
300 pips, I lose $300.00 and my position was opened with $160.00. All good Practice of Money Manager,
determinate the risk-expose, and only risk not more than 8% in any given moment of the account, tipically
2% - 3% of the account.
If I have an account of $2,000 and I use a risk of 2%, I am risk only $40.00 per trade. This is fair with me,
my client and other people. May be you can propose a guiance of Good Practice of Money Maneger, rather
than reduce the leverage.
4) The last, If you reduce the leverage, a lot of People, me and my Clients have to move the accounts to
another country. Because with this Leverage, We can not trade. If We want to participate in forex, We have to
move to another country where We can use the leverage a we need, to operate forex with the risk capital we
have.
This is Eduardo Morales, thank for Reading
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