Using Offshore brokers and MORE leverage than allowed by US/EU regulation

Are you using a higher leverage than legally allowed in your country?

  • Yes

    Votes: 2 22.2%

  • No

    Votes: 5 55.6%

  • I don't want to answer

    Votes: 2 22.2%
  • Total voters
    9
  • Poll closed .
J

John AC

Hi traders,
I have been trading for six months in the forex market. Almost everybody that I know is trying to get 1:500 leverage because it's more profitable, especially when scalping and day trading. It's no secret that we traders in the US (and UE as well, since last year) are especially limited (no hedging, 1:30, ...).

According to the regulation and the law, what are the legal consequences for a professional trader (or a prop firm) if he's using higher leverage ( and hedging) in his professional practice -under a more restrictive country like the US?
...just a warning or maybe a fine...?

Best,
John
Boston
USA
 
Well, about the question in the OP, I don't know what sanction you incur directly, but recall several offshore firms taking on American customers were closed and the funds frozen. I m surprised firms would still offer American citizens leverage they shouldn't by law.
As of my previous post, i don't think many people dealing with a serious portfolio ask for even close to 500leverage, such a leverage is a good way to blow up your account way faster than u built it and it is likely offered by suspicious bucket shops which will help u blowing up in case u become profitable. I doubt the people u know make any money in the market long term, and again would advise u to seek more successful traders when looking for market related advice
 
Blowing your account has more factors involved, as you know. About the topic, check around and you will really be surprised what this industry offers and to whom. Thanks for offering your point of view. Very much appreciated.
 
There are no legal consequences if US retail traders trade with offshore forex brokers.

A firm accepting US customer may face CFTC charge with civil penalties but I never heard such thing as customers' accounts frozen. Offshore banks accounts can be frozn for money laundering, but not for retail forex trading accounts.

For higher leverage, it is a two side sword: if you can profit from market, you can profit more with high leverage; If you had been losing, you will lose more with high leverage.
There is no such thing as a loser can use high leverage to turn himself into a winner.
Only a winner can use high leverage to win more.
 
Last edited:
Thanks BBpp.That makes sense. A lot. So, now, what about a firm? Does a prop firm get in trouble, or a pro trader using offshore FX brokers?
 
John AC said:
Hi traders,
I have been trading for six months in the forex market. Almost everybody that I know is trying to get 1:500 leverage because it's more profitable, especially when scalping and day trading. It's no secret that we traders in the US (and UE as well, since last year) are especially limited (no hedging, 1:30, ...).

According to the regulation and the law, what are the legal consequences for a professional trader (or a prop firm) if he's using higher leverage ( and hedging) in his professional practice -under a more restrictive country like the US?
...just a warning or maybe a fine...?

Best,
John
Boston
USA
More...


I'm wanting to make sure we're all starting off on the same basis.

When you say almost everybody you know is trying to get 1:500 leverage because its more profitable, does that mean that almost everybody you know is making a profit? Or does it mean they haven't made a profit yet but they want higher leverage so that if they ever do make a profit it will be bigger?
 
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