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27Oct

New rules make us happy

Old Posts

CFTC (Commodity Futures Trading Commission) announced final version of off-board currency transaction regulation rules. New rules were called Dodd-Frank Wall Street Reform and Consumer Protection Act and take effect on the 15th November 2010. Now maximum leverage for the main pairs is 50:1, and for exotic (for ex. EUR/USD) – 20:1. Pay attention to the below lists:

Main pairs: GBP/USD, EUR/USD, USD/JPY, USD/CHF, USD/CAD, AUD/USD, EUR/GBP EUR/AUD, EUR/JPY, GBP/JPY, EUR/CHF, CHF/JPY, GBP/CHF, EUR/CAD, AUD/CAD, AU/DJPY, NZD/USD, AUD/NZD, CAD/JPY, XAU/USD, XAG/USD.

Also, according to new rules all American brokers will become NFA regulated and US residents will be forced to use US broker only. There is a reasonable question “What for?” As it was told smaller leverage would lead to safety trading and non-experienced traders would lose less. It aims at minimizing losses and, as the result, the Forex field becomes more attractive So, CFTC cares about us, wants us to get more money, doesn’t it? Let us look at the rules from another point of view. With new leverage you need more money to start trading, more money – more problems. Not all Americans could afford Forex trading before. But with new rules even less people would be able to start trading as now it requires more money. I think it is coming back “old times” when only “Big Bosses” could make a bargain on the market by operating a large sum of money.

But it is not the end. There is another fly in the ointment. If all American brokers become NFA regulated US residents can forget about EAs as most of them use scalping and hedging. NFA doesn’t allow these activities at all. Now everyone will be forced to sit at the PC staring at a monitor with a hope to get some dollars. But before you need to go through Forex school. Also you may try half-automated systems which give you a signal to buy or to sell. As we can see the rules limited US residents and now to become a trader you need to waste a lot of time studying the subject and a lot of money as such education won’t be free of charge.

2 comments |

Comments so far.

  1. Posted by robert kolter on Wednesday 27th October

    what u.s. broker would you recommend/.

  2. Posted by admin on Saturday 25th December

    I do not recommend US brokers at all. Leverage of 1:50 is too low for robots!

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