Broker Forex Reduces Leverage Before French Elections

[anpkniocis]

My broker sent me an e-mail warning that my leverage will be reduced to 50:1 until the elections are over in France. Has anyone else had their leverage reduced?

[Jaiokeelge]

Yes. From Friday until Monday at 12 noon (2 hours after the opening of London)

[pepe58]

VantageFX increased the margin 5 times for pairs of GBP, EUR, JPY and indexes, all in the name of customer protection. Logically, they are signals from brokers market makers who claim to be ECN. But as long as they can pay customers, everything is fine.

[anpkniocis]

These could be signs that the brokers are ECN, they don't want to cover your losses if your account is negative as it happened to FXCM.

[genevois26]

Forum nonsense as always... Whether it's your ECN broker or not, it's always someone's counterpart, and you're theirs; the execution style doesn't change that. The broker protects himself and, consequently, protects other customers because you (as an average trader)

[ssg14]

Dukascopy, Switzerland: May 1, 2017 French election: extension of weekend margin On Sunday, May 7, the French return to the polls for the presidential runoff between Marine Le Pen and Emmanuel Macron. Due to the possible volatility that may cause the result, Dukascopy will extend the weekend margin policy a few hours within the session that begins on Sunday, May 7 at 21 GMT. There is no fixed time to restore normal policy; it will be made without additional announcement once the results are known and when the activity is normal again. In addition, we want to alert customers that large price caps could occur between the closing of Friday, May 5 at 21:00 GMT and the opening of Sunday, May 7. Maintaining positions during the weekend could lead to significant losses even with less leverage.

[anpkniocis]

I intend to close all my operations before Friday's closing.

[zumi22]

This only applies if you operate with leveraged margin. I don’t see why you should apply account settings to customers who don’t use leverage. If the broker is really STP, it doesn’t take additional risk. Even Pepperstone and Dukascopy confirmed that they wouldn’t increase my margin requirements when I talked to my account manager.

[pkni30]

I do not know how to quote double in the same answer, so refer to my previous comment.

[Miluglwz93]

If you don't operate with margin, a margin increase doesn't affect you... it's not space science.

[belencilaaa15]

There is a difference between leverage change and margin change. Even with 1:1 margin applies. I think there is misunderstanding: the margin I speak is call. For example, with 100k balance at 1:1 the maximum open lot is 1; the margin is 10,000 ($100,000/$10)

[Ajoyceboxxa]

My advice is to cover your account or close all positions until all this happens.

[migwsl225]

My leverage is 50:1 all year round. How about that? Risk is what gives value to an investment.

[anpkniocis]

That's why I went offshore.

[ellmenas]

Don't be fooled: no broker cuts leverage for your sake, they just take care of their own skin.

[piki.vamgas]

Right, but as traders we must understand that if the broker breaks down, we all lose out.

[anpkniocis]

Do you think this will only happen in the French elections or is it the new standard from now on?

[Solegag1997]

Every time there is a big political or economic event, wait for restrictions. It’s normal post-SNB.

[oxmlins89]

Remember how the collapse of the Swiss franc left brokers and traders on the street. They learned the lesson.

[Luuu]

A reduced leverage is better than a margin call that leaves you in red numbers.

[anpkniocis]

I agree, but at the same time I hate that the broker decides for me. Shouldn't my choice be the level of risk?

[Pkslagisimo]

Sure, but when you operate on money that's not yours (margin)

[oxmzo]

He thinks it's like a seat belt: it can be uncomfortable, but it saves you in a crash.

[amlipiesco]

Does anyone know about brokers who don't reduce leverage in these events?

[oxmlapemea21]

The darkest offshore don't do it... but you won't be able to sleep quietly thinking if tomorrow still exists.

[umlou]

I'd rather sleep well than risk my money with reputable brokers just to keep 500:1.

[anpkniocis]

So, any of you plan to leave open positions during the election?

[Kalmikki]

No way, I'm out all Friday, I'm not playing roulette with weekend caps.

[Lxeox1978]

It depends on the pair. Some minor crosses will not move so much, but with EUR, I do not approach.

[meginoec]

The last time I stayed in elections I woke up with -60% on my account. Never again.

[anpkniocis]

That sounds scary, what pair was it?

[Palmimolamo]

EURJPY. A 200-pipe jump in seconds, no stops to save me. It was an expensive lesson.

[ne0nel]

I see the choices as an opportunity if you know what you're doing.

[xavolla]

Or bring ruin, if your plan fails, the market is relentless with the trusted.

[anpkniocis]

Does anyone here have a plan to operate the opening of Sunday after the election?

[Mclaus]

Yeah, but only with small lots, I'm looking for the initial reaction, I'm going in and out fast.

[Lmujizx10]

I'd rather wait a couple of hours for the dust to settle down and the spread to return to normal.

[xailem87]

Operating the opening after big events is like surfing a tsunami. Fun, but deadly.

[Ofigesen]

The key is risk management: if you decide to enter, assume that you can lose everything in one movement.

[anpkniocis]

Do you think it's worth risking for a 100-pipe movement when the spread can be 20?

[Maaaxima]

Good observation. Many focus only on the gain potential, forgetting how expensive it is to get in and out at times like this.

[MOMSANCAM]

Do not underestimate the slide. In extreme volatility, your order can run far away from your desired price.

[juanslanleyg]

That's what happened to me with Brexit. I wanted to shut down at -30 pips and finished at -150.

[anpkniocis]

Wow, I'm getting more and more convinced to close everything by Friday.

[ghual]

Do it, a peaceful weekend is worth more than an attempt at profit that can ruin you.

[ilayn4o96]

If you decide to stay inside, don't use a high leverage.

[FmesixxaFeliz]

Or just take the risk, but don't complain if you lose. It's part of the game.

[bullemfly9]

The market is a severe teacher: it teaches fast and charges expensive for every mistake.

[anpkniocis]

Thank you all, I appreciate every advice. This thread helped me see things clearer.

[juuan]

This should be a forum: share real experiences for everyone to learn. Successes to everyone this weekend!