It seems that Trump wants to dismantle these financial laws.Does that mean that US will no longer limit leverage to 1:50?
It seems that Trump wants to dismantle these financial laws.Does that mean that US will no longer limit leverage to 1:50?
1:50 It is already quite leverage.For anyone who is not a super disciplined professional, it is enough to ruin an account.What they should really eliminate is the rule of the first in, first out (FIFO
It is possible ... if you eliminate it without replacement, then.If only reforms it, maybe something changes, but not at all.All that regulation of leverage and Fifo is ridiculous because it treats traders as if they were simple consumers of financial products.But since retail trading lobby almost does not exist, politicians have no incentive to change it.
No, the 1:50 leverage limit and the Fifo rule will remain there because they were not part of the Dodd-Frank law.This was imposed because the futures industry demanded that the Forex retail market compete on equal terms.As the futures brokers could only offer 1:50, they pressed to impose the same rule in Forex.The CFTC/NFA sold it as a “consumer protection measure”, but in reality it was pure competition strategy.
Another round of millionaire salaries for investment banks when they are allowed to open their own prop shows again.And then, when everything explodes, the protests of "Occupy Wall Street" will come because the retailers were injured.
Citing: {quote} The Dodd-Frank law prevented US USA traders with foreign brokers.You are wrong.It is not illegal for an American trader to have an account with a foreign broker.
Dodd-Frank has 243 laws.If some eliminate, the system is not going to come down.But do not expect major changes for retail traders.
Dodd-Frank did not prohibit directly operating with foreign brokers, but it did make it almost impossible for them to accept American customers without registering before the CFTC or the NFA.Many brokers regulated in the United Kingdom or Australia simply preferred to avoid bureaucracy and blocked US customers so, in practice, US traders have fewer options and are obliged to use brokers with less regulation.
If Trump eliminates the Dodd-Frank law, we may see more brokers options for US traders but be careful, because that also means that more brokers will return without regulation looking for desperate customers.
If you can't make money with 1:50 leverage, the problem is not regulation, it's you.The leverage does not make a trader profitable, it only amplifies its errors or its successes.
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