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ESMA proposal discussion topic

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As many of you are aware ESMA have proposed introducing leverage limits of 30:1 to 5:1 on retail trading. The proposals would increase the margin required to open a CFD trade or spread bet on EUR/USD to 3.33%, the DAX to 5%, and equities to 20%. This is still only a proposal which hasn't been finalised and you can #ReplytoEMSA here.

 

2018-01-29 11_57_26-Leverage restrictions - Reply to ESMA.png

 

You can have your say on this matter by using the following link (or any link on this post) which will be sent to the European regulators. The deadline is the 5th of February 2018 so if you would like to be heard please make sure you submit via the above link before Monday. 

 

If you would like to discuss this with other community members please feel free below, but remember anything posted in this thread won't be seen by ESMA and will have no impact on any decision making process

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ESMA has listened to traders on margin close-out rules and adapted its policy accordingly. A 50% close-out rule will now apply on an account basis, rather than on a position-by-position basis. We’d like to thank all traders who submitted views – your valuable input has resulted in a positive shift for the industry rather than a backwards step.

 

Is this now a rule? If a trader has 10k and losses are 4,500 ,margin is £1000, what will happen to open positions?

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    • This week is a crucial week for US indices I think especially end of the week. If we are going to see extreme Dow soon, the market will let us know.  The volatility is expected to pick up so money can probably be made in both directions with 1000+ points move again. I personally would not go long for a couple days. There are positions trapped right now going long from last week so I would guess some will be forced to endure some pain, unless they volunteer to take losses.
    • If it moves below $5k to maybe $4k again, it doesn't look like there is a great deal of support. Sure it can double in a short span of time but don't you think this is a very risky trade?
    • as explained earlier in the thread the cumulative risk reward ratio (auto calc'd on a spread sheet) plotted on the chart with the win rate is absolutely fool proof in revealing if a strategy is profitable of not. Also if you make any changes to the strategy the result will show up quickly in the stats so revealing whether the change was advantageous or not. Without hard statistics people have a habit of misleading themselves as to how well they and their strategy are really doing.
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