There is more proposed regulation heading for the forex markets. The CTFC is proposing to limit all forex leverage to 10:1.
I think some regulation is a good thing. It will cut down on forex scams and poor broker practices. I would absolutely agree to getting rid of 400:1 leverage and 200:1 leverage etc. However, I think once again, this is going to prove to be too much meddling.
While it’s true that there are beginners that make the jump and go crazy with leverage, it’s a bit of a personal lesson in finance. Forex trading is just like anything else, it pays to study it, and practice it, before actually trading live. It requires the same kind of dedication as taking on a new job.
Part of the reason that I am a forex trader is because of how open the regulation structure is. I like that I can use leverage if I choose to, and if I don’t want to, I can trade more conservatively. These new regulations will impose a much tighter limit on my choices and yours.
The CTFC is seeking your comments for the next 60 days. If you have a comment, let your voice be heard.