funny, that reminds me of the time someone called me a smart @ss I said it’s better than being a dumb @ss
ROFL
Yes, no and maybe - on leverage. If you’re looking to make a quick buck and have no idea on what Fx is about, the answer is a resounding “no”. If you have some exposure to Fx and willing to learn more, then maybe. If you know all there is to know about Fx, the answer is yes…
lmao … gotta remember that one.
What leverage means is that the higher leverage you have, the less you have to put up in so called margin.
In other words, the more leverage you have the better, provided you understand it’s function.
The fact that most traders misuse their leverage by opening positions much bigger than their account can handle, get themselves a margin call because of their own actions, is the reason behind why many will say that leverage is not a good thing. Of course it isn’t if you don’t understand how to use it. Just because your car has a top speed of 200mph doesn’t mean it’s a good idea to drive that fast… exactly the same with leverage.
I’ve ‘Liked’ your post because actually that’s my point (explained in a far more eloquent way as always).
There are idiots that WILL drive around at 200mph given any chance they have. Then there are those that ‘now and then’ will do it ‘for fun’. I fit into that category. I used to have a Chrysler 300C electronically limited to 250km/h. Did I drive around at that speed. No. Did I ‘just for fun’ now and then ‘go for it’??? Yes. On any one of those occasions I could very well have ‘come a cropper’. And then there are people that even although their car IS capable of high speed will NEVER ‘give it a bash’ (those are your ‘top 5%’).
Good analogy.
Regards,
Dale.
If you think about it, does anyone really believe that most people really sign up to a broker and properly learn how to do technical analysis? Most people don’t have the patience or mathematical understanding, or they just go for fundamentals because its seen to be easier by newbies i guess. All the people who treat FX as gambling… do you think they sign up to a broker and say to themselves “time to spend months learning Technical analysis”?? I don’t think so… So the stats are meaningless if you are infact taking time to learn how to analyse the charts.
That will straight away put you i don’t know… in the top 20%
Then from that point onwards you need the edge to make profits. Forget about the 80-95% losers. They should learn how to trade instead of just thinking “the Euro mus be weak, I will SELLLL NOWWW”
Really, dont be suprised. Dont think that 95% have tried with as much effort as us and just failed. Sure some who really try will fail but the stats are misleading.
Only the other day my colleague told me he done FX once. No demo. He bought the Eurowith £10,000 worth of his money…
This was just before the recession because he was “told by someone” it was a good time to buy. Yes he didn’t see what was coming and he lost £6,000. I didn’t even tell him about FX charts he has no idea. No idea of a SL which could have saved him alot of money…
That is just one person to make up the 95% losers. I’m not bothered by that stat. Neither should you if your doing what your supposed to!
This is the exact same principle as the leverage discusion. I could use a moto.
“manage your money, learn Forex before doing forex”
Hello.
Now THERE’S some good points made. Anybody that has even an ounce of respect left for me may now lose it but I never thought about it that way. You’re quite right: how many of the 95% (or whatever the correct figure is) have ACTUALLY taken the time and gone to the trouble to learn an ‘put in the hours’??? Common sense. I just need to ‘read it on paper’!!! LOL!!!
This thread has gone in an unexpected direction. I guess one could say that discipline (and time and effort) is what is to be ‘worried about’ and not leverage. That being said: I’m still of the opinion that too much leverage is offered ‘across the board’. In other words: whether you’ve opened a trading platform ONCE and opened an account or you’re a proficient trader you are able to trade with the same leverage hence my belief that the US Regulations are not a bad thing but I can see how that would upset a proficient trader. The irony of course is that a proficient trader wouldn’t be over leveraging themselves and would be managing risk adequately. Then again 50:1 leverage on FOREX is still nothing to be ‘sniffed at’. The vast majority of FOREX traders that fall into the ‘lazy’ or ‘quick and easy money’ category (those noted above) can still ‘hang’ themselves with 50:1 leverage. It’ll just take a bit longer is all.
Hmmnnn… At this time I have to say that I’m confused by my own argument on the subject.
Sorry.
Regards,
Dale.
While your confusing yourself, I will edit my last post and fix all the poor grammar 
I didn’t wanna say it.
More leverage the better - dunno why you would want less.
just to point out that I know someone that lost not few hundreds but few thousands (his life savings) and almost committed suicide… so forex can be as addicting and dangerous as smoking or even more…
Yeah, that’s why everybody says to never trade with money that one needs, be it for daily life or be it savings … only money that can be lost without hurting badly should be used, especially in the beginning.
Amen to that. As far as leverage goes 50:1 here is the USA is plenty. I hope they dont drop it to 10:1 max here is I have herd talks of. BUt it is to weed out the idiots like that. But cutting there leverage they are forced to buck up and pay for there trades upfront. Most will no longer be able to afford to get in the market and will instead find an investment better suited for them. However the smarter forex trade realizes 2% risk on my account is 2% risk on my account reguardless if it is1:1 or 1,000,000:1. The only time leverage will effect a 2% risk trader is scaling in to trades. Lower leverage means higher margin requirements. This will effect me a great deal as I scale in all the time (if I can). But 50:1 is a great number in my book. 100:1 might be nice but I dont have that option lol.
I like the car analogy. I had a TransAm and could it go 200 mph ? sure ! but I didn’t drive it that fast everyday. Although one last blast the day I traded it in… from the etrance of interstate highway on-ramp to the time I was actually on the highway was already up to 90mph
while I like the idea of having lot’s of leverage I have never used more than 10:1 and there have been times when I use no leverage 1:1 and still grow the account at an acceptable rate. You don’t have to go fast to get where you’re going, you just have to get there.
I think most of us have it all wrong when we talk about who the CFTC & NFA are attempting to protect and why.
Is it about some newbie blowing a few thousand over trading on leverage? Or are the regulators trying to protect the solvency and stability of the financial institutions and brokers that act as counterparty to leveraged trading.
The concepts and reasons behind the new trading regulations are to prevent the collapse of the
financial system not some newbie FX trader going bust.
In the fall of 2008 we learned a hard lesson on the danger of being either trader or counterparty of highly leveraged gambles. There is a winner and a loser. Even the “great” Goldman Sachs got a bit wobbly for a while.
When the commodity exchange increased the margins on silver last spring it wasn’t because they were worried about the traders going bust, it was done to protect the exchange’s counterparty exposure.
Think about it, do the regulators really give a rat’s a** about you and me…
…or waking to find they’re facing the meltdown of a few major FX brokers because 5% of the customers were on the right side of a very good day at 200:1. LOL!
That’s a good point d-pip ! That’s probably the reason for the leverage restrictions. But now I’m wondering why the new rules against hedging and the new fifo rules? Both of those annoy the heck out of me.
Neither nor.
CFTC, like every bureaucracy, is mainly concerned with its own importance; the remainder of the time/effort is spent scheming to enlarge their influence.
Brokers, no matter whether they are MMs or ECNs, pass on their customers’ positions to the markets as soon as possible.
Positions that cannot be passed on are hedged.
So no broker who isn’t a total moron (and they most assuredly are not dumb) will ever be in danger of going bust due to his customers’ leveraged positions.
O.
Morbid as this may be: on at least one occasion I know EXACTLY how that ‘someone’ felt. I wasn’t going to point it out when I saw Oliver1968’s post because, well, it’s embarrassing, and even though my life is an ‘open book’ to everyone here: that’s not something that you really discuss with the world now is it. In both cases (that ‘someone’ and mine): I’m pleased it was ‘almost’. But that’s why these pathetic disclaimers and all these broker ‘tricks’ and ‘enticements’ and ‘promises of riches’ etc. annoy me as much as they do (and believe me that is an understatement). Nobody can know what it is like to go from having everything in life that you want (well: reasonably speaking) to having nothing until you’ve been there. If you’ve never had things like fancy cars, a beautiful home with no mortgage, a family, expensive clothes, being able to go on holiday when you felt like it, eat out at restaurants as the norm, the list goes on, then losing all of that (and more) really isn’t ‘life changing’. But go from that to having to rent your own home from somebody who literally ‘stole’ it on an auction because they got it so cheap, no car, owing clients money, the list goes on too, then that’s a different story altogether and saying that ‘sh*t happens’ and ‘you should have known better’ doesn’t quite ‘do it’ for a person. This business CAN break you. For a long time I was ‘alive’. I wasn’t ‘living’ I was simply ‘alive’. There’s a big difference. I don’t (and never will) see the point of just being ‘alive’. And believe me: anybody that says the suicide is ‘the easy way out’ I will vehemently challenge. What’s more: my ‘spectacular wipe out’ put one of my clients in ‘almost’ the same position. Nobody can know what THAT is like to live with until you’ve been there either. Only two things kept me going: my dogs and my belief that if others on Wall Street were making money (and BIG money) then why couldn’t I. That’s it. Nothing else. How did I get into that situation??? No risk or money management, over trading simply because I could because of ‘ultra leverage’, and the belief that I knew better than all of the older members of these forums and was able to ‘stomach’ risk more than they were.
So there you have it. Maybe I should be ‘charged’ with writing the ‘disclaimers’. The above is W-A-Y different from one-liners like ‘do not trade with money that you cannot afford to lose’ or ‘trading is risky and not for everyone’. You get the picture.
Anyway: now that I’ve brightened up everybody’s day and moving on …
Regards,
Dale.
Edit:
And by the way Oliver1968: don’t you go feeling bad about your post either. First: you had no way of knowing my situation. Second: you’re right of course. But people don’t think that way. Nobody goes into ANY business believing that they’re going to lose money (not unless they truly ARE morons)!!! LOL!!! You and me: ‘buddies forever’ and no problem.
I never thought about it that way to be honest. See my above post and you’ll see where I was (am) coming from. You’re right of course.
Regards,
Dale.
Ouch, that must have sucked bad. 
Going from 100 to 10 is obviously way worse than always having been at 10 and never having tasted the ‘sweet 100’.
The bad news is: you’ve had some (partially self-inflicted) bad luck.
The good news is: you haven’t allowed it to conquer you; judging from your style of speech (and the 12 LOL!!!'s per post), you’re fighting back, and doing so with a grin on your face. Usually, people who are grinning while in a fight are the ones still standing, once the fight is over. And you’re 46, not 64 … so you have ample time to get back to where you were before.
And I’ll be glad to accept your invitation of sending your plane to pick me up for for a nice week on the boat, in 10 years or so.
Whatever happens, I think everybody who has read your post will admire you for your openness and honesty.
Not an easy thing, admitting to having been fukked over badly … takes a man, to do it.
(Before any lady member of this forum takes issue with that statement: I mean a ‘man’ as opposed to a ‘wimp’, not as opposed to a ‘woman’.)
Dale, buddy, you’ll get back where you belong … and I’m sure you’ll make one hell of an MD for Delta SA.
Cheers,
O.