Alpari (US) Supports FOREX Dealers Coalition in Opposition to Proposed CFTC Leverage Rule
Alpari (US) Supports FOREX Dealers Coalition in Opposition to Proposed CFTC Leverage Rule
New York, NY (Vocus) February 11, 2010
Alpari (US), LLC, a regulated Foreign Exchange company and global provider of online Forex trading, has announced public support of the Foreign Exchange Dealers Coalition (FXDC), an alliance of US foreign exchange market dealers formed to collectively challenge the CFTC proposed rule requiring Forex dealers to collect a 10% deposit on all foreign exchange transactions.
The FXDC was formed to pool industry resources and advocate in favor of fair regulation and market oversight without limiting freedom of choice, innovation or job creation in the forex market. The coalition is supported by many prominent US forex dealers, including GFT Forex, Oanda, IBFX, Gain Capital, FXCM, FX Solutions, FXDD, PFG Best, CMS Forex and Alpari (US).
Under the CFTC proposal, significant amendments have been proposed to the leverage permitted on certain accounts. If passed, the proposed rule would disproportionately effect on average retail investors. Currently, the CFTC enforces a 100:1 leverage (1% margin requirement) to open and maintain a position on a forex transaction. With the proposed 10:1 leverage (10% margin requirement), retail traders would have to invest significantly more to place the trades of the same size, ultimately resulting in decreased return or loss on invested margins. The risk-reward ratio that is so appealing to the retail investor today would no longer be available.
Olga Rybalkina, CEO of Alpari (US), LLC, commented, “Alpari (US) has always been a strong supporter of the fair business practices and investor protections offered through industry regulations, but we do not support this CFTC proposal. We believe it discourages new investors from learning how to trade forex and developing their trading skills. Alpari places a strong emphasis on educating retail traders so they can make informed decisions. We believe this new regulation will effectively close the door on the retail traders in the forex market and, once again, make FX trading only accessible to financial institutions.”
For more information about Alpari (US), please visit http://www.alpari-us.com.
For more information about the FXDC, please visit http://www.fxdc.org.
About Alpari (US)
Alpari (US), LLC is one of a group of Alpari companies with operations in New York, London, Shanghai, Dubai, Mumbai, Moscow and Kiev. Launched in Russia in 1998, where Alpari is now one of the current market leaders, the companies collectively have a presence in 6 countries with approximately 130,000 Live Accounts and monthly Forex trading volumes in excess of $ 100 billion*. The group of Alpari companies experienced an impressive growth in Live Accounts during 2008.
Alpari (US) was established in 2006. The company is based on Wall Street, in the financial district of New York City, where it is registered by the Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM) and is a member of the National Futures Association (NFA), Member ID: 0379679. With the growing success of its Forex business, Alpari (US) has now expanded its product base to offer U.S. exchange-traded futures and options to domestic and international investors, speculators, and institutions.
Please note that trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. For more information about the Forex industry and the regulatory protections offered to those who trade within it, please visit the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) websites at http://www.cftc.gov and http://www.nfa.futures.org.
*September 2009 data
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Categories: Forex Options Tags: Alpari, CFTC, Coalition, Dealers, forex, leverage, Opposition, Proposed, Rule, supports
Is this these new forex rule legal?
Question by Undergrad: Is this these new forex rule legal?
The NFA is supposedly going to force traders manage their positions using FIFO. FIFO (First In First Out), however, is an inventory method used to assess the cost of bulk inventory, and forex positions are not bulk inventory. Each position is individually tracked. Therefore, there is no question about the cost of a trader’s positions. There is no question in my mind that if this is in fact being forced upon traders, that it is being done so not in the name of transparency, but to incapacitate responsible trading methods that utilize time frame considerations and position cost averaging.
I’ve also heard that hedging is getting eliminated. The whole reason why so many investors went bankrupt over the past 18 months is that they were not hedged when they should have been.
Does anyone know who pushed for these changes? Can anyone tell me why I should rethink my opinion of why anyone would want these rules in place? Can anyone give a me a starting point for the legal reasoning behind any of this?
Best answer:
Answer by Buy the Numbers
I don’t trade FOREX, so I’ll treat this as a general securities question.
FIFO has a major effect on taxes, since it determines the holding period. For example:
Buy qty 100 XXX on 3/4/2007
Buy qty 100 XXX on 3/4/2008
Sell qty 100 XXX on 9/4/2008
Sell qty 100 XXX on 3/5/2009
By FIFO, this is two long term trades (18 + 12 months), but by LIFO, this is one short term trade (6 months) and one long term (24 months). I think FIFO makes more sense. Besides taxes, I’m unaware of other affects (perhaps you could give an example).
In terms of “no hedging,” this sounds like yet another one of the ideas to enrich banks/brokers (Goldman Sachs, etc.) at the expense of investors. I also think this will blow up in their face, just like temporarily removing shorts did (the only ones allowed to short were brokers, which they did with glee and then sold expensive put options to investors).
Give your answer to this question below!
New Forex Trading Rule by NFA About Hedging Positions Will Change the Trading Game
New Forex Trading Rule by NFA About Hedging Positions Will Change the Trading Game
New York, NY (PRWEB) April 30, 2009
The forex market is booming with addition of new players every minute because of the high and lucrative potential of making money. Such fast growth poses its own challenges, but at the same time also present with the opportunity to redefine the industry by writing new rules or guidelines.
One such rule that NFA came up with recently is regarding Anti-Hedging. This rule is coming into effect starting 15 may 2009. As per this new law, the trader community cannot create hedged trades.
Rahul Gupta, owner of Forex Profit Farm says, “Currently a forex trader can have two opposite directional trades open at the same time on a single currency pair. So say if you are trading EUR/USD currency pair, you can have short as well as a long trade opened at the same time, which is what is called hedging. The traders do that mostly to judge the direction of the market. Though a hedged open long and short trade on a single currency pair will offset the gain of one position against the other, but when the direction of market trend becomes clear, traders close the losing trade and keep the winning one going. It is a cruel way to trade, but it is very common.”
With that now going to be not possible come May 15, 2009, all traders who use such forex trading practices, will now have to come up with different trading strategies. This is a clear concrete step by NFA to make the forex industry more mature and keep the exponential growth under check.
But Rahul says “Traders who are using best forex trading system don’t have to worry about anything at all. A good trading strategy is independent of such techniques and always remain non-effected from changing rules of similar nature. Traders who use sound trading principles, won’t feel the effect of this new rule at all.”
This is very true because National Future Association (NFA) has passed this new rule to make the unfair practices offered by some of the traders as ineffective, but at the same time preserve the interest of the experienced traders who trade forex for a living.
Like any new rule which is introduced by a governing body, this one also has its share of traders opposing it, but most of the experienced traders see it as a positive step towards regulating the forex trading industry. In such time, a sound trading strategy is all that a trader needs to keep making money by selling one currency against other.
About Forex Profit Farm:
Forex Profit farm is one of the Best forex system available which can help traders achieve the financial independence they always wanted. The system not only comes with an accurate trading strategy with clearly defined instructions on when to enter and when to close the trade, but it also covers the important aspect of trade management that will help traders to make maximum profit from their trades. Covered in multiple manuals and videos, Forex Profit Farm is a must-have system for anyone looking to make money by trading forex.
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Forex Trading – Double Your Profit Potential With This Simple Rule!
If you are not making as much money as you would like from your forex trading or want to get a great tip before you start, learn this simple rule and make it part of your forex trading strategy for bigger profits…
The rule is the 80 / 20 rule and it applies in many areas of life and that includes forex trading. This simple rule states that 80% of your income comes from 20% of your efforts.
Its used in business for example, where 20 % of clients very often give 80% of the income – so how does it apply to forex trading?
Simple – cut your trading frequency to high odds trades only!
Many traders take to many trading signals – but there is no correlation between how much you trade and your profits. Your judged on the accuracy of your trading signal and that’s it.
The fact is the big forex trends and high odds trades don’t come around that often.
For example, I know traders who trade less than 12 times a year yet make over 100% annualized gains.
These guys are not looking for 20 0r 30 pips there after 1,000s.
FACT
The big profits come from the big trends, that last weeks, months or years and if you want to make money, focus on these not the low odds trades.
If you consider how many people day trade and try forex scalping you will understand what I mean.
These are lots of low odds trades and day traders and scalpers lose. They try hard and lose, sad but true.
On the other hand the patient trader who hits high odds trades spends less time on his or her trading – but makes a lot of money.
Never confuse how frequently you trade with how much profit you will make.
Take high odds trades only, show patient and you will have higher profits, with less stress and spend less time on your trading.
Long term trend following is the way to make money don’t trade often but aim to make a lot when you do, understand this and you can enjoy currency trading success.
Forex Trading Software – First Rule You Need To Know Before You Start
So, now you are a forex currency trader. But how can you avoid the risk of losing money if you are a newbie? I think many newbie traders would like to have an experienced successful adviser, who could help both newbie or experienced trader, someone who could teach them how to trade without losing money.
Before you start or continue trading, you need to know the main rule of successful forex traders: you should use your own forex trading system. You can ask: why is this system so important? It is very simple. If you don’t have your own successful trading system you may lose your money after only 1 or 2 weeks. It’s very difficult to be a successful trader without using a tried and tested system. For many people trading is a gamble. They try to start trading as soon as possible and make money too quickly. This usually leads to losing on the first trade. Many successful traders have their own strategies that have proven their effectiveness.
But the problem is – it can take many years before you you’ll find this strategy, and also it will take some time to test how well it works. Yes this is true – some traders develop their strategies over 2 or more years! Here’s a simple test for you – Check your trading results for the last 3 Months. – Do you have your own rules? Do you make profits consistently? Is your capital growing every week / month? – If all answers are “yes” – you have already your own forex trading strategy. But if any questions were answered “no” – Stop your trading immediately! You’re losing your funds and you need to make some changes.
The easy way to change your losses to profits – Get an already working trading strategy from traders who are already making money! These successful traders have incorporated their trading strategies into a piece of forex trading software that helps traders make their decisions immediately. You need to be using software that gives you exact buy/sell signals.
This forex trading software will alert you about the best opportunities at the right moments – Because the program calculates many forex indicators and follows all trading rules automatically. So there isn’t the “human-error” factor. Ask yourself – do you say sometimes “It was a bad day today…” I’ll tell you why this is bad day for you. Because you think this is a bad day… and you made mistakes in your trading and lost money today. This software doesn’t know about “bad” days. It just follows the trading rules without emotion to make profits for you.
Every successfully trader uses a few strategies to increase their profits, and minimize losses. The simpler a strategy is, the better it is. I started to use an already proven and working forex trading system after an experienced professional trader gave this advice to me. And this helped me a lot. I think for many new traders or people who have some problems with it right now “I mean losses” this will be a good opportunity to turn your losses into profits.
Citigroup May Move Prop Traders to Hedge Funds for Volcker Rule
Citigroup May Move Prop Traders to Hedge Funds for Volcker Rule
Citigroup Inc. may move a team of proprietary traders into its hedge-fund unit, one of at least three alternatives the U.S. bank is studying to comply with the Dodd-Frank Act, people briefed on the matter said.
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