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The End of Retail Forex Trading?

Posted on 21. Jan, 2010 by admin in Random Noise

I am sure you have read about this already. It seems like every forex trader out there is talking about it. The new CFCT proposal which was made public last Thursday, suggests some radical changes which, if approved, definitely will affect the retail forex industry. Basically there are three different suggestions, namely; registration requirements for all Futures Commodity Merchants, Retail Foreign Exchange Dealers, Introducing Brokers, Commodity Trading Advisors and Commodity Pool Operators. The second aspect is related to minimum capital requirements, where they propose that all Futures Commodity Merchants and Retail Foreign Exchange Dealers need to maintain a net capital of at least $20 million, plus 5% of any amount of retail customer liabilities that exceed $10 million. The last part is probably the most interesting, as they suggest stronger leverage restrictions for retail traders, which should be modified down to 10 to 1 in leverage. This basically implies that you would now need $1000 to trade one mini lot or $10,000 to trade one standard lot. If these regulations are approved, it will definitely affect both the retail traders as well as many of the new brokers out there. It will be interesting to see how things turn out. If you want to read more details about this, then take a look at this article, which is posted over at Forex Peace Army.

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Tags: forex broker, forex peace army, forex regulations, forex trading