The maximum leverage allowed for forex trading

[Forexer Guru]

I understand that in the United States, the maximum leverage allowed for forex trading is regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). For major currency pairs, the maximum leverage is set at 50:1. For non-major currency pairs, the maximum leverage is lower, set at 20:1.

These leverage limits are stricter than those in many other countries, such as Europe, where the maximum leverage for major currency pairs is typically 30:1, or Australia, where it can be as high as 500:1.

The question is:

Is there a way US citizens can access leverage of 500:1 for forex trading through non-US-based brokers with all these regulations imposed by the Commodity Futures Trading Commission (CFTC) and the National Futures Association?

 

[SimpleMeLike]

The question is:

Is there a way US citizens can access leverage of 500:1 for forex trading through non-US-based brokers with all these regulations imposed by the Commodity Futures Trading Commission (CFTC) and the National Futures Association?

Good Morning Forexer Guru,

Good question. I had the same question as well.

You will have to use a non-regulated offshore broker like I do.

 

[maxinger]

Why the US is so restrictive
(cannot do this, cannot do that, but can carry guns)?

At the rate things are going,
soon women have to wear Burqa.

 

[long]

Why the US is so restrictive
(cannot do this, cannot do that, but can carry guns)?

At the rate things are going,
soon women have to wear Burqa.

You can do a lot more damage with 500x leverage than you can with a gun. The legal way is to leverage someone else’s money in addition to your own. You could borrow against your assets to get more margin money or you could manage other people’s money for a percentage of the gains. The later is obviously the smarter move as you wouldn’t be risking your own money, just collecting a percentage of the managed money gains with zero risk if you trade poorly. That’s how the big boys do it…

 

[maxinger]

You can do a lot more damage with 500x leverage than you can with a gun. The legal way is to leverage someone else’s money in addition to your own. You could borrow against your assets to get more margin money or you could manage other people’s money for a percentage of the gains. The later is obviously the smarter move as you wouldn’t be risking your own money, just collecting a percentage of the managed money gains with zero risk if you trade poorly. That’s how the big boys do it…

No one died in Australia due to high leverage.
High leverage is harmless. You just put less money in your trading account.

And if the broker CEO goes to India to die, you lose very little money

 

[Scataphagos]

Good Morning Forexer Guru,

Good question. I had the same question as well.

You will have to use a non-regulated offshore broker like I do.

Why in the world would anyone want to play 500:1 leverage? If the market moves against you 0.25%, your position is wiped out.

 

[long]

No one died in Australia due to high leverage.
High leverage is harmless. You just put less money in your trading account.

And if the broker CEO goes to India to die, you lose very little money

I’ve know people that ended their own lives after financial ruin. 500x leverage is like pointing a gun at the market and demanding that it take everything you have and everything you owe other people.

 

[SimpleMeLike]

Why in the world would anyone want to play 500:1 leverage? If the market moves against you 0.25%, your position is wiped out.

Hello Scataphagos,

To get rich, and get rich quickly. The same why someone would want to trade 100 ES and 100 NQ contracts.

 

[SimpleMeLike]

I’ve know people that ended their own lives after financial ruin. 500x leverage is like pointing a gun at the market and demanding that it take everything you have and everything you owe other people.

Hello long,

Traders/People should not trade with money they can not afford to lose. This is why those people killed themselves.

Understand the game and understand the risk, or get killed.

The trading markets is for Lions, and us Lions are always hungry.

 

[Snuskpelle]

500x makes you very vulnerable to gaps. Yeah you burn your bet before 0.2% ordinarily but in a bad circumstance you can take a 0.5-2% gap resulting in a several multiples negative account. Not to mention it's likely you gambling on small random moves, with a very significant transaction overhead as it's very unlikely you have some microstructure edge as retail. Finally, it's far beyond the Kelly optimal leverage on any reasonable hold times.

Of course bucket shops are more than happy to facilitate that sort of bets because you're going to lose, so they simply get to pocket your money. Only bucket shops will be offering 500x to retail.

500x are popular among some because martingales last longer, but I can't stress how dangerous it is to have an account that's growing due to the martingale inevitably blow up and quite possibly become negative.

It is degenerate gambling in every sense UNLESS you're actually not trading 500x leverage as @maxinger described but far lower leverage to your overall trading capital. Still you're going to be stopped out before a 0.2% DD all the same which excludes most reasonable edges. Most importantly asking for 500x leverage is going to exclude any reasonable brokers.