Comment Text:
i0-001
COMMENT
CL-04918
From:
Sent:
To:
Subject:
Marc Fisher
Thursday, February 4, 2010 3:13 AM
secretary
Regulation of Retail Forex
RIN 3038-AC61
Hello,
I've learned of this survey from Gain Capital website. I'd like to
express my opinion on the matter of regulatory cap on forex leverage as
a professional trader of futures and for the past 8 years forex
instruments.
The first regulation, which limited the leverage to 100:1 made no sense
in my opinion, because it is mathematically provable that 100:1 leverage
cannot be profitable and the trader using it will lose money in the long
term. Leverage has become a marketing tool for forex brokers the appeal
to customers with limited capital and sometimes intelligence.
That said, I understand the idea of regulating the leverage to "protect"
the consumers, however I've always opposed the elimination of choice
regulations because personal taste should never be questioned if wrong
choice means only harm to yourself. The problem is that the uneducated
majority is being exploited by the brokers, however I believe the
leverage is just a grease for the money making machine and simply
accelerates things up - in other words the people who need to be
protected by these regulations will lose money anyway, it will just take
a little longer. If this seems like an overstatement, try searching
"forex leverage" on google....the first result is sufficient to educate
anyone with reasonable intelligence on the matter and protect him/her
from being cough by the leverage lure.
The above is my opinion and I'm sure it won't prevent you from imposing
the regulation anyway, so back to the matter. I'm personally using 1:10
to 1:20 leverage in my everyday trading and I'm making money
consistently. Anything beyond that decreases the chance of survival
without sufficient capital to resolve potential account wipe-outs. I'm
sure all reasonable investors won't care if you cap the leverage to 1:20.
1 : 10 limit would force some, including me, to move their investment
accounts abroad and continue trading with their favorite leverage. In
todays interconnected world and unprecedented competition, moving to
other country takes about 15 mins of time.
The bottom line is, regulation which limits personal choice is always
evil, if it happens to disturb the group that it's not supposed to
regulate, they will find a way around it... always...no exceptions.
I wish you luck with your work,
Regards,
Marc Fisher
