Read the whole notice here: p117743.pdf

Anyone have any thoughts on this?

Also, feel free to email them what you think...

pubcom@finra.org

the only way i is helpfull is to maybe prevent larger institutions, but they are limited anyways as no one has the capital to cover such a massive trade, in reality this only harms the smaller trader

edit: i wrote them an email explaining basic moneymanagement:

My personal opinion as a trader is your concept of protecting the investor is flawed.
in order to maintain a position of $1million you need a minimum account balance of $10,000. however this does not guarantee your trade, if your trade goes against you by 1 penny you are in effect over leverage and as a result you are margin called.
in order to maintain proper money management http://www.babypips.com/school/money_management.html as many experienced traders will tell you is to risk no more than 1-5% of your margin. an example of this is if you want to trade 1 standard lot of 1 million dollars your 1% of said million multiplied by the pip value you are willing to risk, lets use the following:
1 standard lot
200 pip stop loss
400 pip gain(sufficient gain above the loss to improve risk to reward)
with a standard lot the total loss is $2000 as price per pip = $10
in order to maintain margin and proper Money management the account balance must be greater than $200,000

by limiting the leveraged available to 1.5:1 you are in effect limiting the growth factor of the retail trader. if you want to protect us traders work with other government agencies to centralize Forex, this would greatly reduce the ability of dealer type brokers from initiating tactics like stop hunts, price freezing and other malicious acts. and above all encourage new traders to realize the risks involved.


Sincerely,

Dracozny
Co-Administrator
http://www.Ircforex.com
A free non-profit chat group for traders

pubcom@finra.org

Here's the comments that I sent FINRA and copied to my congressman:

Dear Marcia E. Asquith,

In all actuality, the consumer does not need to be protected from the leverage but rather from the dealer who exploits the consumer by offering accounts with relatively high minimum trade sizes. The following is a live chat conversation I had with a CMS Forex sales specialist:

Please wait for a site operator to respond.
You are now chatting with 'Alton'
Alton: Hello. Can you please tell me your name and how I can assist you today?
you: hi, my name is Jack. do you offer $200 starting accounts with 400:1 leverage and a 10k minimum trade size?
Alton: Yes, we do - that would be a mini account.
you: so with your lowest spread of 3 pips, if i wanted to risk 2% of my account on 1 trade i would be stopped out after 1 pip?
Alton: Yes, that is correct.
you: hmm.. that seems difficult to be able to profit from.. what would recommend as acceptable risk?
Alton: I cannot make any suggestions as to trading. We are regulated by the NFA.
you: ah, but the NFA allows you to offer high leverage on undercapitalised accounts which deplete faster with a 10k minimum trade size...

edit: * Long pause while Alton figures out what to say.. *

Alton: Yes. The minimum is 200 USD. With that you may trade mini-lots.
you: ok, thanks.. that's all i needed to know to make my recommendations...
Alton: Thank you for contacting CMS. We hope that you have a great day.

I would instead draw your attention to the business model of Oanda and other market makers which allow fractional lot sizes down to even .0001 of a standard lot size as a solution to consumer protection. The risk is not so much in the instrument of leverage but rather in the limits being placed upon the use of it. The retail forex industry reduces a market entry barrier by providing traders the advantage of low minimum account starting balances. To eliminate the ability to leverage those funds would not protect these consumers but instead prevent them from realizing appreciable returns for their efforts.

Well.. I wasn't too impressed with the response I got back from my congressman...

atleast you got a responce, my congresman is the one who started this rediculous venture

and now after all this time i get a responce....????

Thank you for contacting me to share your views about the Let Wall Street Pay for Wall Street's Bailout Act of 2009 (H.R. 1068) which is currently pending in the United States House of Representatives. I appreciate knowing your views on this matter.

In the Senate, this legislation would fall under the jurisdiction of the Senate Committee on Banking, Housing, and Urban Affairs, on which I serve. Please be assured that I will be following the progress of this bill, and will keep your views in mind if this or related legislation comes before this committee for consideration.

If you would like to know more about my work in the Senate, please go to my website, http://merkley.senate.gov/, to sign up for my e-newsletter updates or to email me directly.

Again, thank you for contacting me. Please stay in touch.


All my best, Jeff Merkley
United States Senate

somehow i think he has my emails confused

Interbank FX

to me




Dear Valued Customer,

In compliance with the upcoming NFA regulations, we will no longer be offering accounts with more than 100:1 leverage. We are also required to alter the leverage levels on our existing accounts. We want our customers to be aware of these new requirements to determine in advance how this may affect their trading plans and decisions.

We are writing you because this affects your live account with Interbank FX.

As of market open on November 29, 2009, all currency pairs will have a maximum leverage of 100:1, with the exception of the USD/SGD and the USD/ZAR which will have a maximum leverage of 25:1.

Please be aware that this change will impact your margin requirement for any open or future positions. For example, if you’re trading in a mini contract worth $10,000 at 100:1, you will need to post a $100 margin to open that mini lot trade. For a nano lot, which is 0.01 of a mini contract, you will be required to post $1.

The margin call and stop levels on your 100:1 account will be: Margin Call - 65%, Stop Out - 50%. As a contrast, if your account was 400:1 your levels would have been: Margin Call - 125%, Stop Out - 100%. Or Margin Call - 100% and Stop Out - 50% for a 200:1 account. We also want you to understand how leverage can work both for and against you.

Please consider your account balance and how the new margin requirements will affect you. If you need to deposit funds, simply click on the link below and remember, we now offer no fee credit card deposits.