Comment Text:
i0-001
COMMENT
CL-00932
From:
Sent:
To:
Subject:
Joshua Glazebrook
Wednesday, January 20, 2010 8:28 AM
secretary
Regulation of Retail Forex
RIN3038-AC61
To Who It May Concern,
Information has been going around that the CFTC are going to introduce a leverage limitation of
"10:1", on every currency pair including the most highly traded pair like the EURUSD,
USDJPY, GBPUSD, AUDUSD, USDCHF, USDCAD, EURJPY or GBPJPY.
To put it bluntly the people who proposed this idea within the CFTC are flipping nuts. All you are
going to do is close down legitimate USA based forex businesses and limit the abilitieis of both trader
and retail forex broker alike. I believe an internal investigation to see whether any CFTC proposer of
this 10:1 leverage limitation has any vested interest in off shore forex broker businesses, because it is
obvious to me that these are the people who stand to benefit by such an excessive, extreme ruling.
If you want to stop illegitimate forex dealers from doing illegitimate stuff, have a tick analysis rule to
prevent fake slippage / gappage in the bid / ask quotes. Or you could have no requote rule allowed in
the retail forex market as they are not trading in the complete market but a sand box market where
slippage/gappage is a made up scenario.
Maybe if your aiming to protect the new trader, the new trader must take a test that demonstrates that
they understand the effects of leverage. Don't screw up an entire industry because there are a few
stupid people that don't understand the risk they are entering into.
There are many brokers around the world now offering more than 100:1 and traders will very quickly
pull all there money out of the USA brokers and migrate to international brokers if a 10:1 leverage
limitation or even a 50:1 leverage limitation is introduced.
As a customer of a retail market broker I enjoy high leverage (200:1), as I have a high tolerance to
risk and understand the negatives. However, the high leverage and the significant trends found in the
forex market makes it possible for every person to make a living out of trading and not just the big
financial institutions.
A 10:1 leverage limitation on major pairs or even the larger crosses, is just plain stupid. A 50:1
leverage limitation isn't good enough for most traders.
Major USD pairs in my opinion include EURUSD, USDJPY, GBPUSD, AUDUSD, USDCHF
and USDCAD.
Significant crosses include: EURJPY, GBPJPY, AUDJPY, CHFJPY, EURGBP, EURCHF, GBPCHF,
EURAUD and GBPAUD.
Yours sincerely
Joshua Glazebrook
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