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European Traders - new ESMA regulations!

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  • Does ESMA Regulations have impact on you and what your actions wi
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  • #1
  • First Post: Jun 24, 2018 11:00am Jun 24, 2018 11:00am
Hi Everyone,

I would like to ask all EU traders on their opinion and views on incoming Leverage and Margin restrictions by ESMA.

I personally think that this new rules will have negative impact on Retail Traders and are created to protect brokers, not us...however EU brokers will lose a lot or retail clients to overseas and unregulated counterparts if solution is not found.

What's your Plan B?
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  • #2
  • Jun 24, 2018 1:37pm Jun 24, 2018 1:37pm
Even I currently use a leverage less than 20, the incoming Leverage and Margin restrictions by ESMA will have a significant impact on the Margin used so I will decrease my leverage even more in order to keep my system properly working...

On the other hand, I think the incoming Leverage and Margin restrictions by ESMA are against the retail traders, while they are applied even on profitable accounts...



PS. From Oanda received by e-mail :

Impact to existing retail clients

If you have open positions at market close on 27 July 2018, any sub-accounts on which you have open positions will be marked as ‘closing trade(s) only’ to limit the impact on your existing trading. This means that although you can move funds into and out of the account and close open positions, you will not be able to open any new positions. Leverage rates for these pre-existing positions will remain at the level at which they stood when you executed the opening trades. Consequently, in order to open any new positions you will be required to open a new sub-account(s) that will reflect the above stated leverage limits.

If you do not have any open positions at market close on 27 July 2018, we will update your existing sub-account(s) to default to the above stated leverage limits. If you were previously trading using leverage lower than the new ESMA limits, on 29 July 2018 you can lower your leverage through your account management portal in the Manage Funds section.
I am who I am
  • #3
  • Jun 24, 2018 2:20pm Jun 24, 2018 2:20pm
I never received that email, i still have the initial leverage from when i opened the account; and yes at some point i need the leverage BUT when i try to use more the broker "upgrade" the account and automatically lowers the default leverage
  • #4
  • Jun 24, 2018 2:25pm Jun 24, 2018 2:25pm
I'm applying for professional status B4 August 1st deadline


If I not then I would join either:

Dukascopy Swiss

IC Markets Australia - ctrader

FinPro

FXPig - ctrader

TradeView Markets (Cayman) - ctrader
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  • #5
  • Jun 24, 2018 3:34pm Jun 24, 2018 3:34pm
Quoting Phil_GMT
I'm applying for professional status B4 August 1st deadline If I not then I would join either: Dukascopy Swiss IC Markets Australia - ctrader FinPro FXPig - ctrader TradeView Markets (Cayman) - ctrader
I have the same plan pretty much.
Anyone w/Experience with Rakuten Australia?
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  • #6
  • Jun 24, 2018 3:50pm Jun 24, 2018 3:50pm
Quoting Maxjoy
{quote} I have the same plan pretty much. Anyone w/Experience with Rakuten Australia?
Ive been demoing their Rakuten mt4, I'm not sure if its just demo but,

 

  1. the spreads are low and fixed through the day only widen on the next market day 00:00
  2. no comissions
  3. no swaps? ( dont know if only demo)?
  4. re-quotes a fair bit
  5. no trades until market open for 15-20 mins daily


I Have a spread betting account but due to ESMA will be looking to take my money to an Australian firm this week.

  • #7
  • Jun 24, 2018 4:06pm Jun 24, 2018 4:06pm
Quoting leweg1
{quote} Ive been demoing their Rakuten mt4, I'm not sure if its just demo but, the spreads are low and fixed through the day only widen on the next market day 00:00 no comissions no swaps? ( dont know if only demo)? re-quotes a fair bit no trades until market open for 15-20 mins daily I Have a spread betting account but due to ESMA will be looking to take my money to an Australian firm this week.
As far as Advertised by Rakuten - EURUSD spread is fixed at 0.5 pip 95% of time and NO COMM. That sounds great.
SWAP absence should be DEMO problem...
There could be hidden fees as account maintenance, yearly fees, no trade fees etc. so read the FINE PRINT first and pls let us know if you open live acc. there,
whats your experience.

Will be greatly appreciated!!!
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  • #8
  • Jun 25, 2018 2:51am Jun 25, 2018 2:51am
https://www.forexfactory.com/showthread.php?t=750612
  • #9
  • Jun 25, 2018 4:13am Jun 25, 2018 4:13am
Quoting Maxjoy
Hi Everyone, I would like to ask all EU traders on their opinion and views on incoming Leverage and Margin restrictions by ESMA. I personally think that this new rules will have negative impact on Retail Traders and are created to protect brokers, not us...however EU brokers will lose a lot or retail clients to overseas and unregulated counterparts if solution is not found. What's your Plan B? {image}
My broker offerdd me to apply for a professional approach.- But I wonīt.

I could live with 10:1.

Guido
Risiko birgt immer auch die Chance.
  • #10
  • Jun 25, 2018 4:16am Jun 25, 2018 4:16am
Quoting Sesamstrasse
{quote} My broker offerdd me to apply for a professional approach.- But I wonīt. I could live with 10:1. Guido
1:10 trading what? FX or commodities...CFDs...?
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  • #11
  • Jun 25, 2018 6:05am Jun 25, 2018 6:05am
Quoting Maxjoy
{quote} 1:10 trading what? FX or commodities...CFDs...?
For every instrument. 1:10
I can trade everything-
-included "KetchupvsMayonaise" as long as there is a chart projected and the transactions costs meet my conditions.
Risiko birgt immer auch die Chance.
  • #12
  • Edited 7:43am Jun 25, 2018 7:12am | Edited 7:43am
Quoting leweg1
{quote} Ive been demoing their Rakuten mt4, I'm not sure if its just demo but, the spreads are low and fixed through the day only widen on the next market day 00:00 no comissions no swaps? ( dont know if only demo)? re-quotes a fair bit no trades until market open for 15-20 mins daily I Have a spread betting account but due to ESMA will be looking to take my money to an Australian firm this week.
Demo uses a different ruleset, it has no reference to live - particularly with spreads, swap and spikes in volatility.

Sesamstrasse

Live with 10, and be comfortable and not restricted by your margin is another. If you know what you are doing there shouldn't be a real reason to refuse flexibility, unless they are charging you for it.
  • #13
  • Jun 25, 2018 11:30am Jun 25, 2018 11:30am
I am curious what will be the plan B for those who trade binary options since also ESMA is also banning binary options altogether in the EU starting from July 2nd.

Will they just give up on that instrument or look for other ways to trade them?
  • #14
  • Jun 25, 2018 12:01pm Jun 25, 2018 12:01pm
Quoting mlawson71
I am curious what will be the plan B for those who trade binary options since also ESMA is also banning binary options altogether in the EU starting from July 2nd. Will they just give up on that instrument or look for other ways to trade them?
In my case I'm trying Nadex and waiting 4 more months to have enough spot trading history to apply for their pro status. Volume for volume.
  • #15
  • Jun 25, 2018 12:19pm Jun 25, 2018 12:19pm
Quoting Catch-22
{quote} Demo uses a different ruleset, it has no reference to live - particularly with spreads, swap and spikes in volatility. Sesamstrasse Live with 10, and be comfortable and not restricted by your margin is another. If you know what you are doing there shouldn't be a real reason to refuse flexibility, unless they are charging you for it.
-I trade since a decade-
-and I havenīt seen one of these 1:1000 accounts growing longer than a couple of months.

If leverage would be the key element for successful trading,
all the found managers and banks with zero leverage or 1:5 would start a "thing" to get a 1:1000.

Very rare comes an artist around and grows a 100$ account to a equivalent acount size.
My approach is to earn money with the time I spend next to my screens.

Stay tuned
Guido
Risiko birgt immer auch die Chance.
  • #16
  • Jun 25, 2018 12:24pm Jun 25, 2018 12:24pm
Youu are missing the most important part of the new regulation:
Protection against negative balance.
  • #17
  • Jun 26, 2018 5:39am Jun 26, 2018 5:39am
Quoting cuchuflito
Youu are missing the most important part of the new regulation: Protection against negative balance.
I would not say thats the most important - Auto Trade close at 50% is pretty harsh...how your account will go on minus...trading some crazy Exotic pairs w/Amazing Gaps...
They tide your hands and call it a favor...
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  • #18
  • Jun 26, 2018 6:35am Jun 26, 2018 6:35am
Quoting Sesamstrasse
{quote} -I trade since a decade- -and I havenīt seen one of these 1:1000 accounts growing longer than a couple of months. If leverage would be the key element for successful trading, all the found managers and banks with zero leverage or 1:5 would start a "thing" to get a 1:1000. Very rare comes an artist around and grows a 100$ account to a equivalent acount size. My approach is to earn money with the time I spend next to my screens. Stay tuned Guido
There's a large difference between 10 leverage and 1000 - it's not a choice between the two, 20,50,100 and 400 are all more reasonable. Either way, I wouldn't take away the choice from someone - I know a very good trader that uses up to 100 for example, it's not really fair to tell these people they can't have an account with a decent regulator.
  • #19
  • Jun 26, 2018 6:55am Jun 26, 2018 6:55am
Quoting Catch-22
{quote} There's a large difference between 10 leverage and 1000 - it's not a choice between the two, 20,50,100 and 400 are all more reasonable. Either way, I wouldn't take away the choice from someone - I know a very good trader that uses up to 100 for example, it's not really fair to tell these people they can't have an account with a decent regulator.
I don t get you.

Whatīs the matter to trade no longer with the same broker they chosed?

Itīs just the leverage.
In this case these retail traders just can t have too large positions.-- thatīs it.

There are plenty of brokers outside the european union( and I really don t mean anywhere in the jungle regulated)
US, Swiss, Singapoore, HK- just to name states/regions.

With a 1000Euro account, you can still trade some minilots.
20 pips a day is easy 2-3% a day-- I see no problem.

And with a bit larger account you trade full lots.
Risiko birgt immer auch die Chance.
  • #20
  • Jun 26, 2018 7:25am Jun 26, 2018 7:25am
Quoting Sesamstrasse
{quote} I don t get you. Whatīs the matter to trade no longer with the same broker they chosed? Itīs just the leverage. In this case these retail traders just can t have too large positions.-- thatīs it. There are plenty of brokers outside the european union( and I really don t mean anywhere in the jungle regulated) US, Swiss, Singapoore, HK- just to name states/regions. With a 1000Euro account, you can still trade some minilots. 20 pips a day is easy 2-3% a day-- I see no problem. And with a bit larger account you trade full lots.
30:1 is Ok for swing trading with ONLY ONE PAIR! But it's not enough for active day trading and scalping. And not to mention about more complicated systems with multi currency baskets.

I don't know how many times I have to explain that the leverage is a TOOL and there is no such thing as "too high leverage". Some people know how to use the tools other don't. With high leverage you can control risk much better. For example you can diversify your capital across multiple brokers. Instead of putting all capital in one account, you can deposit only a little bit of money in each broker and use trade copier to trade simultaneously all accounts. (There are many benefits) You don't keep any profits in the account. Withdraw everything on a regular basis.....

But you CANNOT do any of this when your broker demands 3.33% cash for each position. And what about the crosses? 20:1 leverage.
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