Thanks clint, i shall proceed and if it does go to 10:1 i will probably look somewhere else. Oanda seem to be good to deal with, hopefully no problems paying out ect.
I will go put the avatar back up! 
Cheers!
My advice would be to look no further than FX OPEN. It ticks all the boxes.
MT4, ECN, good leverage, fast execution, great customer service.
Pretty simple eh.
if this does happen, it will be a big mistake.
There are many brokers outside regulation of CFTC. Even if you have doubts about offshore brokers you always can trade with FSA regulated broker.
So, there is no problemā¦
I guess Iām the first one to spot it, so Iāll post.
The CFTC announced yesterday that it will not, in fact, be cutting the leverage limit to 10:1. It will cap it at 50:1 for the major currencies (2% margin requirement).
From the Dow Jones story:
[I] WASHINGTON (Dow Jones)āFederal futures regulators finalized new rules for the retail foreign exchange market late Monday, but they backed away from their original proposal to place strict limits on the amount of borrowed funds retail foreign exchange investors can use.
The rules, posted after business hours on the Commodity Futures Trading Commissionās website, create a new regulatory regime for firms that deal in retail foreign exchange products by requiring them to register with regulators and abide by minimum net capital standards.
The original proposal had called for capping leverage at a strict 10-to-1 ratio, instead of the existing 100-to-1 for major currencies. That portion of the proposal drew a record number of comments as dealers, investors, and lawmakers all raised opposition amid fears it could kill the industry in the U.S.
As such, the CFTC said late Monday it had scrapped that part of the plan. Instead, the agency said it will allow the National Futures Association to impose its own leverage rules as long as they require investors to place a minimum security deposit of 2% on trades involving major currencies and 5% on the notional value of the trade for all other currencies. The National Futures Association is the self-regulatory organization for the industry. The CFTC said it will review the leverage requirements periodically to ensure they donāt need to be adjusted.[/I]
Here is some more analysis of the rule change:
CFTC finalizes forex rules: leverage reduced to 1:50 | Forex Magnates
Since 50:1 will be in effect, I have some questions on how this affects margin calls. According to the BabyPips school,
āAs soon as your Equity equals or falls below your Used Margin, you will receive a margin call.
( Equity =< Used Margin ) = MARGIN CALL, go back to demo tradingā
So, if you have to put in more money to make the same trade, your margin is higher, meaning that you would be at risk of a margin call sooner. Is that correct? Of course, the rule is - put in protective stops and donāt get a margin call. Still, Iām wondering if Iām understanding it right. Thanks!
Not really, it means you must put more money into the escrow to open a trade. Example: under the 100:1 you only have to deposit $1000 for $100,000 currency $10/pip. If it moved against you 100 pips you are margin called. now you will have to place $2000 into escrow to trade $100,000 at $10/pip. So the currency can now move against you 200 pips before you face margin call.
No.
Your margin call point is based on your account balance and the permissble leverage. If you have $10,000 in your account and put on a position which requires $1000 in margin then you can lose $9000 before the margin call. If the margin requirement is $2000, then you can lose $8000 before the margin call. The higher the margin requirement the lower the loss you can take before getting called.
Thanks for both answers. Rhodytrader, that clarifies it for me and confirms what I was thinking.
thanks for the postā¦
Can someone help me understand what this max leverage of 1:50 means to my calc lots according to my mm?
Normally when trading at 1:100, my acc is 1000, risk per trade is 3% and SL is 30, according to my mm I play 1 standard lot.
So if now the max leverage is 1:50, to get the same result all I need to do is double my lots from 1 standard to 2 standard lots?
Seriously new at this 
You need to be more specific in your terminology. What do you mean by āmy acc is 1000ā?
Are you saying that your account balance is 1000? (1000 what? dollars? euro?)
If youāre trading standard lots in a $1000 account with 30-pip stop losses, you have WAY more than 3% risk on each trade.
30 pips at $10 per pip is $300 risk per standard lot. Thatās [B]30%[/B] of a $1,000 account.
This is completely wrong.
My suggestion to you at this point is to stop what youāre doing, and begin a serious study of the Babypips School.
Pay special attention to the lessons on leverage and margin.
If that doesnāt clear things up for you, then come back with your specific questions.
Iām so glad I have an account with GoMarkets in Australia. 20:1 on āall other currenciesā thanks anyway.
A short document was released by the CFTC Office of Public Affairs on August 30, 2010, referencing the [B]Proposed Rule[/B] (for the regulation of retail forex) issued in January of this year, and describing three changes to that Proposed Rule which are now incorporated into the [B]Final Rule[/B].
This document, titled [B]āFinal Rule Regarding Retail Foreign Exchange Transactionsā[/B], outlines:
[ul]
[li]the legislation giving the CFTC authority to regulate retail forex
[/li]
[li]the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as they pertain to retail forex
[/li]
[li]the Proposed Rule governing retail forex originally issued by the CFTC in January 2010, and
[/li]
[li]the three changes (to the Proposed Rule) incorporated into the Final Rule
[/li][/ul]
Regarding the three changes made to the Rule as proposed in January, most individual traders will be concerned only with the one dealing with margin (leverage).
Basically, the Final Rule regarding margin provides that:
[ul]
[li]for āmajorā currency pairs, the minimum margin required will be 2% of the notional value of each trade (this corresponds to maximum allowable leverage of 50:1 for āmajor pairsā)
[/li]
[li]for āminorā currency pairs, the minimum margin required will be 5% of the notional value of each trade (this corresponds to maximum allowable leverage of 20:1 for āminor pairsā)
[/li]
[li]the definition of āmajor pairā and āminor pairā is left up to the National Futures Association (NFA), and can be changed by them at any time
[/li][/ul]
The other two changes made to the Proposed Rule (issued in January) deal with introducing brokers (IBās), and a clarification of one of the disclosure requirements for FCMās and RFEDās.
Presumably, when these changes have been written into the previous (proposed) version of the Rules, then the thing will be published in the Federal Register in its final form.
For now, anyone who wants to read the CFTC Rules in their entirety will have to read the Proposed Rule published in January, plus the changes issued on August 30.
Hereās a link to the Proposed Rule, as published in the Federal Register in January ā
Hereās a link to the CFTCās August 30 document āFinal Rule Regarding Retail Foreign Exchange Transactionsā ā
These two documents, taken together, constitute the new Rules regulating retail forex in the United States. These Rules are not subject to another round of public comment. These Rules will become law in the U.S. on October 18, 2010.
Hello!
Why is so much desinfo about trading?
Big money.
Banks get about 50% in profit on trading (use your money).
Do they want shear pice of that?
Why they let scams deal as market brokers?
Clear answers
Clint - Thanks for postingā¦
One other interesting tidbit I pulled out of the announcementā¦
āThe final rules retain the requirement for RFEDs and FCMs that engage in retail forex transactions to disclose on a
quarterly basis the percentage of non-discretionary accounts that realized a profit and to keep and make available
records of that calculation. The final rule, however, clarifies that a retail forex account will be considered either āprofitableā
or ānot profitable,ā with ānot profitableā including accounts that break-even. Further, only non-discretionary accounts that
are not proprietary are to be considered. Finally, the recordkeeping requirement is prospective and will not require
reconstruction of transactions pre-dating the effectiveness of the final rules except insofar as necessary to comply with the
requirement that disclosure documents include a statement of profitable and not-profitable accounts for the preceding four
quarters.ā
As far as I know, the prevailing assumption is that most retail forex traders lose money. However, most of what Iāve read on this has been primarily anecdotal. I for one will be very interested in seeing two things come out of thisā¦
- Looking at the actual data in the aggregate and being able to verify if the percentage of losing traders (accounts) is truly in the 85-95% range across the board as has been reported.
- Understanding if there is any significant differences between brokers as far more or less losing accounts.
On that second point, once the data is public I expect a very rigorous debate to emerge in the forex community as to why those differences exist (assuming that the data does in fact show large deltas). For exampleā¦.does better software UIs, and cleaner charts lead to more profit? Do more bells and whistles on indicators factor in? How much do spreads really come into play? Etc etcā¦.Should be some great debatesā¦.I canāt wait to see the numbersā¦ā¦
How about not US Brokers?
One of my friends decided to clarify the matter with the new CFTC regulations and sent them a couple of questions. Below are his questions and the CFTC answers to them. I think you will find this info very informative.
Dear Mr. XXXXXXX,
Your email has been forwarded to me for response. In answer to your first question, in the year 2000, Congress amended Section 2Ā©(2)(B) of the Commodity Exchange Act (7 USC 2Ā©(2)(B)), setting out who is allowed to serve as a counterparty to a retail off-exchange forex transaction; these are often referred to as the āenumeratedā or āeligibleā counterparties. Among the eligible counterparties were affiliates of CFTC-registered FCMs and financial institutions (which includes foreign banks). It was through these two categories that off-shore entities were allowed to serve as counterparties.
However, two things have changed. First, in 2008, the Congress passed the Farm Bill, which directed the CFTC to register counterparties as either FCMs or Retail Foreign Exchange Dealers (RFEDs). The recently published final rules, which take effect on October 18, 2010, reflect this statutory mandate, so [B]as of October 18th, foreign affiliates of US FCMs will no longer be able to offer to serve as counterparties to US retail customers unless they become registered with the CFTC as FCMs or RFEDs[/B].
Second, although foreign banks are currently able to offer to serve as counterparties, the recently pass Wall Street Reform and Consumer Protection Act has once more amended Section 2Ā©(2)(B) eliminating the provision permitting foreign banks to serve as counterparties. This change will be effective in July of 2011.
I realize this is a long answer, but the upshot is, if your āforeign brokerā is an unregistered affiliate of an FCM, as of October 18th, it will either have to be registered as an RFED or FCM, or transfer accounts to someone who is. If your āforeign brokerā was a foreign bank, it can continue to serve as a forex counterparty to US retail customers until July of next year. [B]Security deposit/leverage rules will apply to all registered entities doing business with US retail customers[/B].
I hope this proves helpful.
Sincerely,
William Penner
Deputy Director, Compliance and Registration
Division of Clearing and Intermediary Oversight
Commodity Futures Trading Commission
(202) 418-5407
From: questions
Sent: Tuesday, September 07, 2010 4:36 PM
To: DCIO Internet
Subject: FW: Questions on the new Forex regulationsFrom: XXXXX XXXXXXX [mailto:[email protected]]
Sent: Monday, September 06, 2010 12:13 PM
To: questions
Subject: Questions on the new Forex regulationsHello,
I have several questions pertaining to the most recent Forex regulations implemented by the CFTC which become effective on October 18, 2010. In particular, I would like to know the following:
Will foreign-based Forex brokerages be allowed under the US law to continue servicing US customers after October 18, 2010? If so, for how long?
Will the new leverage requirements apply to those Forex brokers servicing US customers after the aforementioned date?
I look forward to your prompt response.
Thank you in advance.
Kind regards,
XXXXX XXXXXXX
My friend also spoke with a representative of IBFX Australia. Below is a transcript of their conversation containing some valuable info in it:
Client Services 50: This is Brandon how may I Help you?
Customer: Hi, Brandon. I got a question to you: will IBFX Australia continue servicing US customers after October 18, 2010 in light of the latest CFTC regulations?
Client Services 50: No we will not be having US clients doing business in Australia
Client Services 50: Due to the regulations in question
Customer: so all IBFX customers from the US will have to stick to the 1:50 leverage accounts, correct?
Client Services 50: That is my understanding of this, yes
Customer: Thank you for your assistance, Brandon. I really appreciate it.
Client Services 50: I wish I did have better news for you
Customer: Do you think IBFX will be able to do anything about it?
Client Services 50: I doubt it Jake, honestly we tried but we are obligated to follow these rules to the letter
Customer: what about servicing foreign companies owned by US residents? For example, if I set up a company in Canada and apply for a trading account with IBFX Australia on its name, will you open it?
Client Services 50: That is a great question
Customer: if you are not sure, just forward it to your legal department for a comment. I would appreciate their response at my email <[email protected]>
Client Services 50: I actually have the rules here they are just hard to find
Client Services 50: To my knowledge there is only way very specific way to do that
Customer: what is it?
Client Services 50: That is what i am trying to find as quick as I can
Client Services 50: The rules have changed about 4 times in a week
Customer: Did the CFTC release four official follow-ups to their initial statement?
Customer: I have no problem hanging on, take your time
Client Services 50: 8. An entity that is formed in a country other than the USA with directors/owners/authorized persons who are residents of the USA - Yes
Customer: great. makes me wonder what the purpose of these new regulations then is. pretty much any American can easily set up and maintain a company in Canada or elsewhere as long as he/she pays their taxes.
Client Services 50: Agreed
Customer: Would you mind if I share these news with my fellow traders? That is the path they might choose to follow.
Client Services 50: Yes you can, I dont see why not
Customer: Thank you for all your help. Have a nice day!
Client Services 50: Youāre welcome. If you have any questions or concerns feel free to contact us anytime. We are here for you 24 hours a day, Sunday afternoon through Friday afternoon.