Comment Text:
i0-001
COIMMENT
CL-04664
From:
Sent:
To:
Subject:
Stephen Jenkins
Sunday, January 31, 2010 1:57 PM
secretary < secretary@ C FTC. g ov >
Regulation of Retail Forex
Don't be confused by the rhetoric here. This is a nonsensical idea and does absolutely nothing to
reduce the risk to any investor. As has been noted many times previously, one can just as easily
wager the entire account balance at 10:1 as at 100:1.
This proposal actually reinforces the urge to place larger size trades simply to make the trade
worthwhile. By the time you cover the spread and then account for swap rates, is there a
reasonable expectation of return left? I believe many traders will think not.
Do the math. If you are trading with a 3% total account risk at 100% margin, you will now have to
risk 30% of your account to make an equal trade. How in any way possible does that help an
individual trader?
Remember, MARGIN DOES NOT EQUAL RISK. The size of your trade and the size of your stop is
what determines your risk.
In the end, this is a stupid idea with no basis in reality for the desired outcome. It is another
example of supposed regulations to help the small investor that instead does him great harm. Just
as when they raised the margin requirements a few years back for equity trades, it simply forced a
lot of investors out of the market. I believe that is exactly what big government and big banks
want. They want us to to send our money to them to manage at exorbitant rates and fees because
obviously we are all too stupid to make decisions for ourselves. And when they lose it all we again
have bail them out with our tax dollars.
How about for once, government keeps its dirty nose out of our business and lets the free markets
be free.
Steve
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