Comment Text:
i0-001
COMMENT
CL-05482
From:
Sent:
To:
Subject:
ODS-Michael < michael@odservices, biz>
Sunday, February 21, 2010 3:17 AM
secretary
Regulation of Retail Forex (Federal Register Release: 75 FR 3281)
To whom it may concern:
I am writing to you in opposition to the 10:1 leverage proposed restriction. My guess is that a relative few retail Forex traders
have caused this proposal to come to the forefront of the CFTC. As with most government intervention for the minority, the
unintended collateral damage for the responsible, educated majority is far worse the perceived benefits
This 10:1 leverage will have negative impact to the majority of successful traders that are actually making money in the Retail
Forex Market. I say the majority because it would not be a thriving vehicle for trading if the majority of traders were losing
money. I can envision at least 2 negative unintended consequences:
More money would be at risk for all those successful traders that are using their current leverage appropriately.
This will prohibit many (like me) from ever realizing my dream of being independent of economic downturns and
being subject to an employer. I spent several months paper trading before I started to trade. This involved me
making a lot of mistakes (i.e., resetting my paper trading account) along the way but has proved to be most beneficial
after I went live with real money.
Instead we need to be proactive vs. reactive. Enforce education and certification for retail traders. As I indicated, I paper
traded for several months before I had any sort of confidence I could trade using "real" dollars. This education could include
some of the following:
Required courseware that certifies a budding retail trader understands the risks of trading Forex using existing
leverage levels
Videos show both the "upside" of a good responsible trading and the
"downside"
of ignorant uneducated trading.
Require Paper Trading results for a 1. If a retail trader requires a reset of their account, they must start over. The
retail trader must exhibit they can make a certain percentage (e.g., 5%-10% - better than they can do in the bank) on
their account before they are certified to trade live.
suggest 2 types of paper trading accounts: pre-certification and certification
-certi~icotion
account would be free and could be reset as often as desired
account would require a fee (say $50-$100 or some percentage of the starting capital) for
the initial "funding" and any resets that follow during the certification period. This would force the
budding retail trader to take the paper trading seriously.
All of the above puts the responsibility back on the retail trader and allows other successful traders to continue being
successful. If after going through the above steps and the retail trader still fails then they probably were not following what
the exhibited during their education and certification process.
A collateral benefit could be a spawned educational industry for educating (not selling) Forex trading as a viable method of
generating additional income and tax revenue for government.
If you restrict the leverage you have to potential of adding to the current unemployment rolls for those that will no longer be
able trade using 10:1 leverage.
Thanks,
Michael Catmulli0-001
COMMENT
CL-05482
