Comment Text:
i0-001
COMMENT
CL-05356
From:
Sent:
To:
Subject:
[email protected]
Saturday, February 13, 2010 12:22 PM
secretary
Public Comment Form
Below is the result of your feedback form. It was submitted by
([email protected]) on Saturday, February 13, 2010 at 12:22:07
commenter_subject: 75 FR 3281 Forex Leverage
commenter frpage: 75 FR 3281
commenter comments:
To whom it may concern:
I []m writing to express great concern about the
proposal seeking to limit leverage in retail forex
accounts to 10:1. As a professional forex trader
with a proven track record of successful trading
through retail brokers, the imposition of this
limitation in leverage would seriously damage my
ability to trade successfully. During my typical
trading activities, the leverage occasionally
exceeds 10:1 for periods of time while still
remaining well within what I have determined by my
own experience and judgment to be acceptable
limits. I am aware of how the foreign exchange
market works and am accountable for my own trading.
I do not need a regulation placed upon me that is
arbitrary and has sought no coordination with my
trading method. (Leaving the margin at
100:1
effectively stays out of the way.) To impose a 10:1
limit on leverage is the equivalent of some random
person coming in, entirely uninformed about the
market and my method of engaging it, and meddling
with stop losses on individual trades. Such
intervention is not only unwelcome, it can impose
significant losses on me because it seriously
disturbs the balance of my trading. If I want to
risk more than 10:1 leverage, that should be my
prerogative.
Reducing the leverage to 10:1 accomplishes nothing.
It won [] t prevent novice traders from losing
money; in fact, it will increase the odds of taking
losses of some kind because the lower leverage
increases the likelihood of a margin call. Even ifi0-001
COMMENT
CL-05356
the losses are not catastrophic, they in effect
paralyze the trader [] s ability to trade
effectively. That may prompt some novices to put in
more money and thereby lose more ~vhen, once again,
what would now be the more frequent margin call
asserts itself. This takes nearly all the
flexibility out of retail trading by imposing the
equivalent of an artificial and random stop loss.
In other words, it is unprecedented and dangerous
interference with my trading.
In short, reducing the leverage to 10:1 hinders my
ability to function as a trader. Moreover, the time
and experience I [] ve devoted to developing my
trading method may be rendered a vain effort as a
result. And I imagine as well that such a
limitation in leverage will hamper the freedom of
all traders to develop a trading method based on
their own experience.
Rather than reducing leverage, perhaps the CFTC
could publish guidelines for new retail traders to
help provide realistic perspective to help them
limit risk and maximize their trading efforts. It
could become a trusted source of information, set
apart from the noise of broker competition,
explaining the relevant attributes of the forex
market, market volatility, how leverage functions,
and how to apply risk management.
Thank you for your attention.
Nate
commenter name: Nate
commenter withhold address on: ON
commenter_city: Vista
commenter state: Ca
commenter zip: 92084
commenter~ohone: 310-709-3260
