Forex margin being lowered

Billy Thunder · Sep 29, 2009

Quote from rsikit:

Actually agreed! Anyways still plenty of margin to work with, we shall see how it plays out and see if they cater to it by having people go to the foreign accounts if they want more then 100-1 or not

Trading EUR/USD CME futures, with an exchange rate of 1.4615 and intraday margins of $500 allows for 365-1 leverage.

ddaytrader · Sep 29, 2009

As far as % of available margin used, I would doubt that I often exceed 50:1, and 10-20:1 is more common. However, there have been times where a strong runaway move has gotten going and I've used every ounce of that 400:1 to pyramid for a quick day trade.

rsikit · Sep 29, 2009

Same here I use GFT which offers the 400-1 rarely do I use it , usually if i am in a position to avg down or up I use it, but it generally loses so it could be a good thing to tighten up the margin

cstfx · Sep 29, 2009

Quote from Billy Thunder:

Trading EUR/USD CME futures, with an exchange rate of 1.4615 and intraday margins of $500 allows for 365-1 leverage.

Agree, but only if you are a day trader or scalper on the major pairs; this route is a better arrangement if you are going to pull off 10-20 contracts at a time. (which is still plenty for most). If holding overnight, spot is better. Just depends on yourt trading style. I have been trying this for daytrading the pairs of late and so far have been getting comparable fills vs spot.

Wallace · Sep 30, 2009

Canadian fx brokers new min trading margin starts at 3% for eurusd
UK at present is still 400:1: http://www.100forexbrokers.com/high-leverage-brokers

AKUMATOTENSHI · Sep 30, 2009

Quote from rsikit:

Actually agreed! Anyways still plenty of margin to work with, we shall see how it plays out and see if they cater to it by having people go to the foreign accounts if they want more then 100-1 or not

Thanks for the heads up. I have been focusing on PMG's lately and not watching the FX market closely right now. BTW I sent my account to land of tea and crumpets. I am wondering how long the NFA will keep on constraining the FX market and push dollars outside of the US market. Maybe when the dollar reverses strongly and sustains an upward trend they will reverse the rule changes?

Akuma

Cygnus Atratus · Sep 30, 2009

What we Britons lack in modern dentistry we make up for in eloquence, classic dress style and hyper leverage.

IGMarkets used to offer 1:700

You might want to try Currenex White Label Partners http://www.currenex.com/about_us_white_label.html

P.S. Have always entertained the idea of getting some white label package and offering 1:2500 accounts, ( 0 spread/commission) and advertise in tabloids and "investors conferences" Any business partners ? :eek:

Quote from AKUMATOTENSHI:

Thanks for the heads up. I have been focusing on PMG's lately and not watching the FX market closely right now. BTW I sent my account to land of tea and crumpets. I am wondering how long the NFA will keep on constraining the FX market and push dollars outside of the US market. Maybe when the dollar reverses strongly and sustains an upward trend they will reverse the rule changes?

Akuma

KrispyKreme50 · Sep 30, 2009

Let's assume that the spread on EUR/USD is 1 pip. 1% is 147 pips give or take a few so 1/147 = 0.0068% spread for someone with no leverage. 0.0068*400 means a 2.72% spread cost for someone with 400:1 leverage right off the bat. How is it even possible to trade with 400:1 leverage without blowing up at some point in the future?

Trader KGB · Sep 30, 2009

Quote from KrispyKreme50:

Let's assume that the spread on EUR/USD is 1 pip. 1% is 147 pips give or take a few so 1/147 = 0.0068% spread for someone with no leverage. 0.0068*400 means a 2.72% spread cost for someone with 400:1 leverage right off the bat. How is it even possible to trade with 400:1 leverage without blowing up at some point in the future?

The crazy thing is, the brokers who offer those insane leverages have 2-3 pips spread on EUR/USD, and far higher on other pairs. I wouldn't be surprised if some of the doe-eyed novices on such platforms hand over 5-10% in spread costs.

KrispyKreme50 · Oct 1, 2009

Quote from Trader KGB:

The crazy thing is, the brokers who offer those insane leverages have 2-3 pips spread on EUR/USD, and far higher on other pairs. I wouldn't be surprised if some of the doe-eyed novices on such platforms hand over 5-10% in spread costs.

You're right and it gets even worse from there since EUR/USD has the lowest spread. A 6 pip spread on GBP/JPY 6/143 *400 = 16.78% spread cost for 400:1 leverage. One wrong trade and everything will be gone. :eek: