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  • #4,081
  • Jan 27, 2015 6:16am Jan 27, 2015 6:16am
Protection of capital, exposure to risk is all part of business, which I am running here, a business. You're going to tell me, 98% of the brokers in the world were able to handle this, but the biggest and the best couldn't. As for traders with FXCM, who can't/ won't trade with them because THEIR BROKER DIDN'T KNOW HOW TO MANAGE RISK, you chose the wrong broker. You should have left, if not after the first fine, than maybe the second, third, fourth or fifth. My whole point here is the over regulation of the NFA. Brokers who didn't get hurt reduced leverage in CHF pairs four months ago, and most now have it back to normal. The NFA, on the other hand, because they are clueless, want to reduce leverage now, after the fact. Clearly, given the fact that 98% of brokers handled this, most of which offer much higher leverage than NFA allows, LEVERAGE IS NOT THE ISSUE.
  • #4,082
  • Jan 27, 2015 6:27am Jan 27, 2015 6:27am
Quoting Profit Daily
Protection of capital, exposure to risk is all part of business, which I am running here, a business. You're going to tell me, 98% of the brokers in the world were able to handle this, but the biggest and the best couldn't. As for traders with FXCM, who can't/ won't trade with them because THEIR BROKER DIDN'T KNOW HOW TO MANAGE RISK, you chose the wrong broker. You should have left, if not after the first fine, than maybe the second, third, fourth or fifth. My whole point here is the over regulation of the NFA. Brokers who didn't get hurt reduced...

You can keep repeating the idea that leverage was not what caused the brokers to go broke all you like, but it doesn't change the fact that it was indeed the issue.

It's not hard to see why the biggest brokers had a higher probability of being overrun 2 weeks ago, since the probability is a function of how many clients they have.

It's laughable that you say that protection of capital and risk management is all part of business(the lesson every broker has probably learnt from this incident), and still continue to condemn the brokers that actually take risk management seriously. The fact that other brokers are still allowing insane spreads does not mean it is a good thing. They simply deem the risk of failure acceptable and continue to do it to draw in clients like you. In a way, their parasitic nature is aligned closely to yours.

Do not confuse luck for success. Capital at hand to deal with these crisis(that aren't even their fault - negative balances are client's responsibility) obviously does not scale with number of clients even though risk of this type of event does. Smaller brokerages can weather this storm just fine because their client base is small and they have the resources to absorb these relatively small losses.

The NFA rules are not set in place because the NFA have nothing else better to do than to see US brokers become less competitive. They are in place because they have identified that traders such as yourself are a danger to everyone else. In a way, it's obvious that you would be complaining I guess. No more free lunches for you, at the expense of everyone else.
  • #4,083
  • Jan 27, 2015 6:35am Jan 27, 2015 6:35am
Can't take credit for this one, but great post

The NFA has decided that I cant deposit from a credit card. They have decided how much risk I can tolerate by limiting leverage. They have essentially told me I cant think for myself.YET! there is a local casino in my city run by an Indian tribe that had a net profit of 350 million dollars last year. The government is fine with that and that is a bigger loss by John Q public then FXCM had. Were is the regulation on that?. Before you say its a different industry and that it is a game of chance the odds are increased so they are tilted to the house so you lose. In trading regardless of what you think every trade is a 50/50 prop. The odds are the same for everyone and if you are good at what you do you can increase slightly your chances. Try going to Vegas and counting cards to increase your odds and see what happens Yet casino patrons can still use a credit card and the Casino decides the limit I can leverage vs the odds. The NFA is not a private entity like a Casino so again what right do they have to tell me how I want to gamble. When was the last time you saw a news story about a forex trader embezzling to cover their trading losses. Conversely there are stories everyday about people embezzling to cover gambling losses.
  • #4,084
  • Jan 27, 2015 6:37am Jan 27, 2015 6:37am
Gambling at casinos is basically 1:1 leverage, so I'm not sure what you're trying to say.

If anything, this weakens your case.
  • #4,085
  • Jan 27, 2015 6:45am Jan 27, 2015 6:45am
Quoting deathbait
Gambling at casinos is basically 1:1 leverage, so I'm not sure what you're trying to say. If anything, this weakens your case.
In it's simplest terms, what I am trying to say is why should I have to put up $20,000 to trade 1 lot USDCHF, when the rest of the free world only needs$200, I'll keep the extra $19,800 in MY BANK, not the brokers. Who is the NFA, to make this decision for me. This is suppose to be the biggest democracy on the planet, land of the free. Yet when I go to a FCA or ASIC regulated broker, it states we can not accept residents from The US, North Korea and Iraq. Nice group to be in.
  • #4,086
  • Jan 27, 2015 6:53am Jan 27, 2015 6:53am
Simplest terms?

Because the rest of the free world is not being regulated as heavily, and will eventually pay the price for it.

The NFA is not forcing you to keep 20k with your broker. It is forcing you to put up the capital needed to cover your losses in the case of something going wrong like last week.

If you think you only need $200 to cover a 50 pip sl, and the move slips and goes over 1000 pips, then you suddenly need 4000. If you had scaled in as you say you like to do, then you need to multiply that by the amount of lots you are holding. Suddenly that 20k is looking like a safe buffer.

It all comes back to the problem of negative balance. If you had $200, then the broker has to cover the extra $19800. Multiply that by the number of people trading like you, and the broker blows it's entire capital. When that happens, people who actually had 20k to cover their $200 stoploss trade would also lose their money. People who had money and not been part of this trade would also lose their money. All because of what you wanted. That's why the way you trade is parasitic. You are demanding your personal risk be shared with people who want no part in it.

You know as well as I do that the USA is excluded for a very different reason than the other two. Why bring up fallicious arguments if your own ones can hold water?
  • #4,087
  • Jan 27, 2015 7:04am Jan 27, 2015 7:04am
Quoting deathbait
Simplest terms? Because the rest of the free world is not being regulated as heavily, and will eventually pay the price for it. The NFA is not forcing you to keep 20k with your broker. It is forcing you to put up the capital needed to cover your losses in the case of something going wrong like last week. If you think you only need $200 to cover a 50 pip sl, and the move slips and goes over 1000 pips, then you suddenly need 4000. If you had scaled in as you say you like to do, then you need to multiply that by the amount of lots you are holding....

Now you're getting my point. That reason the US is included in that group is different- they do not want spot fx to exist in the US. As much as you consider me a parasite, 90% of traders agree with me. They are accomplishing their goal. I know two traders who have already left spot for futures. How many brokers left the US in the past few years, but still operate globally? THAT IS THE ONLY REASON THEY EXIST. TO ELIMINATE SPOT FX. So I should have to give up something which I support my family with that I have studied for years, become very good at because THEY DON'T WANT ME TO TRADE SPOT FX. Where is the free enterprise. Or maybe I can just live on 20% of the income because my trade sizes are reduced by tenfold.
  • #4,088
  • Jan 27, 2015 7:18am Jan 27, 2015 7:18am
The biggest point I think you're missing, since you have the luxury of not being in the US, is the NFA specifically prohibits segregated accounts for forex. On purpose, they don't want us to trade it. So now they want us to put up 25 x more margin than the rest of the world and it's not even protected.
  • #4,089
  • Jan 27, 2015 8:01am Jan 27, 2015 8:01am
Quoting Kanzler
{quote} And during rollover. The spread widening is why I left it was infuriating. Otherwise I agree they're a decent broker for the most part.
Yeah, but I guess that's how Oanda's business model works. IMO, that's one big disadvantage when compared to brokers who charge commissions instead of spread markup; I'll rather pay commissions if it gives better spread.
  • #4,090
  • Jan 27, 2015 8:08am Jan 27, 2015 8:08am
Quoting BigFisherman
{quote} Yeah, but I guess that's how Oanda's business model works. IMO, that's one big disadvantage when compared to brokers who charge commissions instead of spread markup; I'll rather pay commissions if it gives better spread.
Absolutely correct. Not to mention for the most part, when they collect commission, they are not interfering with your trades. Price spikes, freezing platforms, you know all the tricks the NFA regulated brokers get away with.
  • #4,091
  • Jan 27, 2015 8:47am Jan 27, 2015 8:47am
Quoting Profit Daily
{quote} Now you're getting my point. That reason the US is included in that group is different- they do not want spot fx to exist in the US. As much as you consider me a parasite, 90% of traders agree with me. They are accomplishing their goal. I know two traders who have already left spot for futures. How many brokers left the US in the past few years, but still operate globally? THAT IS THE ONLY REASON THEY EXIST. TO ELIMINATE SPOT FX. So I should have to give up something which I support my family with that I have studied for years, become very...

Of course most traders agree with you. They are cut from the same cloth, thinking they understand what they are trading when they really don't. Frankly, traders like you endanger my funds. Those rules are meant to protect sensible traders from reckless ones like you. They take away your power to shift personal risk from yourself and put everyone in danger. Obviously you're against that. But much like the mosquito complaining that the insect repellant is crimping it's style, it's a ridiculous complaint. You are basically just complaining that a loophole has been closed to you.

Let me assure you that you have not become very good at it. Your posts indicate to me that you actually have very little idea about the market that you profess to be an expert in. The NFA may actually be saving you from yourself.

I'm just going to repeat myself one more time. Forcing you to put up decent collateral before you start trading is bad for you because you are used to borrowing money with practically no collateral. It is good for sensible traders who are now shielded from your suicidal moves in the market; it makes it harder for your actions to affect their funds. Lowering insane amounts of leverage is a good thing that I hope all brokers would do. It's simply unfair that others have to suffer when your mistakes result in catastrophic failure. I don't want my broker to be held responsible for $19800 of your losses. I want you to be responsible when that happens. I don't think that's unfair.
  • #4,092
  • Jan 27, 2015 9:01am Jan 27, 2015 9:01am
Quoting deathbait
{quote} Of course most traders agree with you. They are cut from the same cloth, thinking they understand what they are trading when they really don't. Frankly, traders like you endanger my funds. Those rules are meant to protect sensible traders from reckless ones like you. They take away your power to shift personal risk from yourself and put everyone in danger. Obviously you're against that. But much like the mosquito complaining that the insect repellant is crimping it's style, it's a ridiculous complaint. You are basically just complaining...
Your basis is on what is 99.9% likely to be a one time event. Prior to that Thursday, when was that last time you heard of traders having negative balances? If I want to risk $200 on a trade, that's what my broker gets. I am not putting up $20,000 in margin in an unprotected, non-segregated account. Who in their right mind would think that is a good idea?
  • #4,093
  • Jan 27, 2015 9:38am Jan 27, 2015 9:38am
Quoting Profit Daily
{quote} Your basis is on what is 99.9% likely to be a one time event. Prior to that Thursday, when was that last time you heard of traders having negative balances? If I want to risk $200 on a trade, that's what my broker gets. I am not putting up $20,000 in margin in an unprotected, non-segregated account. Who in their right mind would think that is a good idea?
Now I know you don't know enough to talk about this. Negative balances can happen anytime. Last week was simply a perfect storm that brought down brokers and made the news.

The story is almost identical everytime it happens. People think that correlations are going to hold up forever, and bet heavily on high leverage. Said correlation breaks, and people lose their shirt. LTCM did the exact same thing and brought the global markets to it's knees. One time thing? Leman Brothers did the same to subprime mortages with similar results. 2015 was the year that forex investors did it to eurchf and brought down major brokers.

If you have never considered the possibility of a negative balance, or thought of what might cause it, you are not the expert you think you are. These black swan outliers happen more often than they should, and bring about the negative balance problem every single time.

The fact that we're in the heavily leveraged forex markets make it an even more regular occurance. You put your $200 in your account and hold the trade over the weekend. Boom, trade gaps 300 pips, and you're instantly in negative.
  • #4,094
  • Jan 27, 2015 10:03am Jan 27, 2015 10:03am
Quoting deathbait
{quote} Now I know you don't know enough to talk about this. Negative balances can happen anytime. Last week was simply a perfect storm that brought down brokers and made the news. The story is almost identical everytime it happens. People think that correlations are going to hold up forever, and bet heavily on high leverage. Said correlation breaks, and people lose their shirt. LTCM did the exact same thing and brought the global markets to it's knees. One time thing? Leman Brothers did the same to subprime mortages with similar results. 2015 was...
I've wasted enough time on this. You know, as well as I do, we are talking specifically about forex here. When was the last event which created negative balances? 99.9 % of the time the price is there for stops to be hit. Bringing up all the other examples is irrelevant. Once again, we are talking about 3 brokers who couldn't handle it, one of which is regulated by NFA, lowest leverage in the world. My trading style does not include holding positions over the weekend. I can use the leverage I do because I use very tight stops. Once again, I have less than 2% of my trading capital at risk on any trade, but as it moves in my favor, I add while moving stops along the way. This is the way you make money in this business. 5% per year doesn't do it for me, would be a complete waste of time and effort.
  • #4,095
  • Jan 27, 2015 10:12am Jan 27, 2015 10:12am
Quoting Jure86
Why on earth OANDA need this? As part of our "Know your customer" policy here at Oanda, we are required to have our clients most up to date employment information on file. Kindly provide your employers full name, current job title, annual income and net worth. Thank you in advance for your co-operation, I look forward to your reply.
Isn't it obvious ?
To be able to run after negative balances more easily next time.

First: Decide if it's worth it or not, then be able to directly ask for a court order to seize a part of the salary if the guy doesn't pay.
  • #4,096
  • Jan 27, 2015 10:13am Jan 27, 2015 10:13am
Quoting Profit Daily
{quote} I've wasted enough time on this. You know, as well as I do, we are talking specifically about forex here. When was the last event which created negative balances? 99.9 % of the time the price is there for stops to be hit. Bringing up all the other examples is irrelevant. Once again, we are talking about 3 brokers who couldn't handle it, one of which is regulated by NFA, lowest leverage in the world. My trading style does not include holding positions over the weekend. I can use the leverage I do because I use very tight stops. Once again,...
I've also exhausted my patience explaining as if to a child who refuses to acknowledge reality. Negative balances happen all the time. This was simply a major event that brought it to public scrutiny. It will happen again, and people like you who refuse to understand that stoplosses are not your maximum risk are going to be the ones who bring down the next unlucky brokers.

You are complaining because you don't want to acknowledge the fact that you are indeed the bad guy in this instance. It's people like you who caused the brokers to fail and people to get their funds frozen. Like I said, it's ridiculous that you are delusional enough to actually turn around and complain about it.
  • #4,097
  • Jan 27, 2015 10:23am Jan 27, 2015 10:23am
Quoting deathbait
{quote} I've also exhausted my patience explaining as if to a child who refuses to acknowledge reality. Negative balances happen all the time. This was simply a major event that brought it to public scrutiny. It will happen again, and people like you who refuse to understand that stoplosses are not your maximum risk are going to be the ones who bring down the next unlucky brokers. You are complaining because you don't want to acknowledge the fact that you are indeed the bad guy in this instance. It's people like you who caused the brokers to fail...
Funny thing is, my 4 brokers were fine. By the way, what type of leverage do you use? Based on your thoughts, I'd be better to go sit in my banks lobby all day and just trade there. Who needs a broker? Unless you have a 10,000,000 account, FOREX DOES NOT MOVE ENOUGH TO TRADE WITHOUT LEVERAGE.
  • #4,098
  • Jan 27, 2015 10:32am Jan 27, 2015 10:32am
Quoting deathbait
{quote} I've also exhausted my patience explaining as if to a child who refuses to acknowledge reality. Negative balances happen all the time. This was simply a major event that brought it to public scrutiny.
Never seen negative balances the last 10 years that i am trading and definitely not at Oanda.

What crappy broker are you with ?
  • #4,099
  • Jan 27, 2015 10:47am Jan 27, 2015 10:47am
Quoting barkie
{quote} Never seen negative balances the last 10 years that i am trading and definitely not at Oanda. What crappy broker are you with ?
On 15/01/2015 a lot of traders from Oanda, who was long on eur/chf or usd/chf close to negative balances.
  • #4,100
  • Jan 27, 2015 10:49am Jan 27, 2015 10:49am
deathbait.... I have to agree with every word you've written.
Where price is now, it has been before, and will be again.
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