50:1 forex leverage – will it affect your trading?

Hello everyone,

It is not news anymore that the US Commodity Futures Trading Commission released its final foreign exchange market rule regarding the limit on leverage for firms dealing in retail forex. A few months ago when the upcoming decision was announced, I expressed my opinion that the 10:1 proposal was quite “shocking” and it will most likely result in a 25:1 to 50:1 limit which will sound more reasonable and everyone will be “happy”. Fortunately (for fellow traders preferring higher leverage), I was right —  the final decision, which goes into effect on October 18, is to cap leverage at 50:1 on major pairs and 20:1 on exotics, not 10:1.

How is it going to affect your trading?

Personally I am not affected. I trade with 10:1 leverage (maximum) so I wouldn’t have been affected by the 10:1 decision either. But my opinion is that “excessive” regulation of Forex industry should be focused towards real problems, such as scams, spammers and all kind of “holy grail” products which are easily and undesirably found around every corner.

Please share your thoughts

Related links:

• CFTC proposal limiting U.S. retail FX leverage to 10:1 – innerfx
• CFTC Releases Final Rules Regarding Retail Forex Transactions – cftc.gov
• US Trader Can Open Forex Trading Accounts Overseas…. But, For How Long? - Francesc’s Weblog (FXStreet’s CEO)
• Retail Forex Industry Calm Reaction To CFTC Leverage 50:1 Decision. FXCM Statement - Francesc’s Weblog (FXStreet’s CEO)
• 50:1 leverage lives! – FT Alphaville
• Thoughts on 50:1 Leverage – Forex Factory
• CFTC issues final forex exchange market rule – Elite Trader
• Forex Leverage Limit 50:1 – Will US Traders Run Away? – Forex Crunch
• CFTC Settles On 50-1 Leverage For Retail FX – Futures Mag

Have a great evening!

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Post tags: forex regulations