IBFX NFA rules new implemented ..Leverage FIXED

i heard iBFX is gonna implement fixed leverage for non major pairs… 1:25 and major pairs 1:100 …

this is a gonna stop alot of small time traders…
i was just gonna open an account with ibfx…now im going to think about UK’s broker.

what is your advice/take?

I just was in live chat with a customer support rep. They say they havn’t heard about anything like this from the NFA.

Where did you get your information? Do you have a link or something.

I heard it from a friend whos trading live.

i made a google search aswell.

check out these threads.

All USA FX dealers may not be able to support MT4 - Forex Factory
Does Anyone hear about new proposals from NFA??? - Forex Factory

so as you can see they are indeed going to remove hedging, implementing FIFO and also fixed leveraged. 1:25 on major pair and 1:100 non major pair.

I think it’s great!!

If you’re trading with a reasonable MM plan 1:25 leverage is more than you need anyway. At 2% risk per trade my used leverage comes out to be around 1:10 leverage.

It would stop the brokers from tricking new traders into losing their money with the 1:400 leverage they are offering now. :slight_smile:


how would it stop broker from tricking traders into losing its money with reduce leveraged?

doesnt make sense.

1:25 leverage is instant kill especially for high pips traders.

1;100 is still tradable but 1:25? no way
anyways ill be going with a UK broker -_-

How is 1:25 an instant kill? Your leverage shouldn’t have anything to do with the success rate of your trades?? :confused:

leverage doesnt have to do with your success rate if U have ENOUGH capital to hold your trades.

think about small traders buddy.

and yes leverage have to do with my success rate because of my small capital
less leverage means i get margin call easier. and cannot hold my losses more.

but i GET what you mean. anyway it does affect alot of people. 1 :25 is just too much. i can understand about 1:100.

afterall people could trade other futures/stock other than forex if they had the capital to do so.

most people start out with forex because of little or no capital.

btw can i know what u mean that brokers can trick traders?

Ok, I see what you mean. In my opinion you’re risking too much of your account per trade, and that’s the reason you have to worry about margin calls. It really has nothing to do with account size.

I started my first forex account with $50, and I always had way more than enough capital to hold my trades because I always risked less than 5% per trade.

When I say that brokers are tricking traders I mean that you can’t trade with the 1:400 leverage they are offering and survive in the long-term. But the brokers make new traders believe they can and they end up blowing their account when they hit a losing streak.

hey Phil, I’m still new so help me understand something about leverage.
I too like the idea of high leverage. Like you said about yourself, I will probably start with 50 or 100, because if I loose that much, it won’t hurt, no big deal.
but with high leverage, I can have a bigger lot size, (i will only use .01 micro anyway) but with the high leverage, I could trade a bigger lot size and have a higher per pip value with a small account size right? with smaller leverage then that means I would have a higher margin requrement and be more likely to get a margin call right? or am I wrong about that?

the way I see it, the amount of leverage doesnt affect your per pip value. if you trade a micro lot .01 then its 10 cents a pip, or a mini is $1 a pip. but what the leverage does is affect how much margin you need to trade a particular lot size right? so the higer the leverage the smaller your margin requrement and less likely you are to get a margin call?

I need to go back to babypis school and read that part again, maybe I’m not understanding it !

whe you say the higher the leveradge- bare in mind you daont have to use it all- if you personally use more leverage there is a increased chance of a margin call.

most broker will start closing your trade at when the total balance falls to 20 % left in your account so if you have �100 in your account regardless of leverage they will close you out when you have �20 left in your account and thats what you will end up with

if you are betting 10 p per pip there is a far less chance of you losing that much than if you was betting �1.00 per pip

you are correct when you say the higher the leveragde the small your intital deposit requirments

over all the LESS leveradge you use the better because the more you use the chances of losing also increase aswell

if you think about it if you had �100 deposit

and you was betting 10p per pip that would allow you 800 pips before getting stoped out

if you bet �1 per pip on a �100 deposit you only have 80 pips aginst you before you get wiped out

hope that helps

Go read this thread…


It’s a conversation between ThePhoenix and myself that we had about a year ago when he was still learning all about margin and leverage.

Start reading around post 11 and read the whole conversation. It will explain why you shouldn’t even be concerned with margin or leverage if you have a money management plan. :slight_smile:

Thanks Phil, I read that thread and if I understood it all correctly then it’s basically what I was already thinking. Seems like something very simple is getting overly complicated.

Really the only thing that leverage has an effect on is your margin requirement right?

if I trade one microlot $1,000 and…

If the leverage is 100:1 then my margin requirement would be $10
if the leverages is 10:1 then my margin requirement is $100.
If leverage is 1:1 then my margin requirement is $1,000

So the only concern I have about leverage is funding my account with enough money to cover the margin requirement and then some, for the size lot that I want to trade. Other than that, it really doesn’t matter what the leverage is.

I keep reading that high leverage is bad and low leverage is good, but the truth is, it really doesn’t matter. as long as your lot size is right for the number of pips you risk on any given trade, so that you only risk a reasonable amount of your capital.
And as long as you have a big enough account to cover the margin requirement.

Will US-based brokers will be able to offer higher leverage to non-US nationals? Or will this limitation - as well as the remaining changes - apply across the board to all US brokers and their customers, regardless of where the latter might be located?

You got it! Everything you said is 100% correct.

If my leverage magically changed to 1:1000000 it wouldn’t matter, because I’d still be trading the same lot size.

High leverage is only dangerous if you use it to trade lot sizes that are [I]way [/I]too big for your account. :slight_smile:

And the opposite is also true. Really low leverage is only a problem if you’re trading too many lots for your account size.

The limitation would apply across the board. Same principle as with hedging and FIFO, doesn’t matter where you are located, all traders through that broker have to abide by the same rules.

To add to the discussion, here is the proposed ammendment from the NFA website that I found with a quick a google search. It was submitted for review and approval in February: http://www.nfa.futures.org/news/PDF/CFTC/FRSec12_intNotc021909.pdf

Page 5 has interesting information: “The amendments leave the minimum security deposit amount at 1% and 4% and [B]eliminate the exemption[/B]. Under the amendments, no FDM would be allowed to offer more than 100:1 leverage on the major currencies or more than 25:1 leverage on other currencies.”

I have deleted my previous post, in light of the fact that your information seems to be more accurate than the information I was given by the Staff Auditor in the NFA Compliance Department.

I have sent the link you provided to that Auditor, and asked for further clarification of this issue.

Thanks for your input.


I figured the ridiculous leverage era would eventually end. I don’t think it should keep anyone out of the market though. You could easily set up a $100-200 account with 100:1 and trade microlots and be peachy all the way to the bank.

No worries, I should have put the link in earlier. I find it strange the NFA didn’t mention the proposed ammendment from February, though I haven’t heard of any status update about the proposal. Maybe they have forgotten about it :smiley:

Even if the leverage is decreased to 100:1 max, that would still leave traders with a lot of leverage.


Hi, Jason

I wrote back to John Matteson, Staff Auditor at the National Futures Assoc. Compliance Dept., regarding the link you provided.
Here is the reply I received today:

Hi Clint,

I apologize for not being able to find that letter for you. As for the proposed amendment, you are correct that NFA is requesting that Forex leverage be capped off at 100:1, due to the reasons discussed in the letter. However, the amendment is only a proposal by NFA, and the final decision is in the hands of CFTC.



That email was a reply to my request for more information, as follows:

From: Clint_______________________
Sent: Tuesday, June 30, 2009 7:58 PM
To: John Matteson
Subject: Re: Response to NFA Question

Hi, John

Thanks for your prompt reply to my inquiry.

After receiving your email, an associate of mine directed me to this link: http://www.nfa.futures.org/news/PDF/CFTC/FRSec12_intNotc021909.pdf
which seems to confirm what I was hearing, namely that NFA is, in fact, proposing a change to the maximum leverage which can be offered by forex brokers (FDM’s).

I trade spot currencies through Forex Capital Markets LLC (FXCM), in an account having 200:1 leverage. If the proposed rule changes outlined in the link above are approved, as I read the text, FXCM (and all other brokers who presently offer leverage greater than 100:1) will be required to reduce the leverage offered to no more than 100:1.

Am I interpreting this proposed change correctly?

Your reply will be appreciated.

Best regards,


Jason, thanks again for bringing that February 2009 document to the Forum.