This infographic was prepared by Oanda. I thought it is very clear and easy to understand.
Greece's Economic Crisis

Created by OANDA

The Greek Tragedy: Greece’s Economic Crisis, used with permission of OANDA

Video: World Economy Collapse explained in 3 minutes

Some of you might have already watched this. But this is so funny. I thought it is worth sharing here ahead of weekend.


Brokers’ response to CFTC’s leverage reduction proposal

Proposal of leverage reduction

I tweeted the news about CFTC is seeking public comment on proposed reduction of leverage to 10-to-1. In other words, 10:1 leverage would be the maximum amount allowed for all Forex traders in the U.S.

Since then, I have received few emails from retail brokers about their comments to this proposal.  So far, Oanda, MB trading, Interbank FX  are opposing the proposal (No surprise though, given the fact that their U.S operations will be affected directly by this proposal). I did not hear from FXCM, however, the customer service officer was advising me to do account transfer to U.K or Australia if I do not wish to be affected by the new proposed regulation.

Here are brokers’ responses:

Interbank FX

We stand behind the belief that you should be given the freedom and right to choose the amount of leverage that is appropriate for your individual desired risk, and that this basic principle of ‘choice’ is in jeopardy by the proposed CFTC regulations.

If you feel strongly about the proposal, we encourage you to help determine the outcome of these proposed regulations. You can help make an impact by sending comments directly to the CFTC at:

MB trading FX (Information received via email, not available on MB trading website now)

MB Trading recognizes the importance of regulation that strengthens industry oversight. We agree with policing and regulating the industry, as was Congress’ intent when empowering the CFTC to create additional rules. However, we don’t agree with policies that might clearly disadvantage firms in the United States which in turn disadvantage you, the client. We encourage you to voice your individual opinion directly to the CFTC. The Public Comment Period is open for 60 days from the date of publication, which was January 13, 2010.

Oanda (via Oanda forum)

in this particular case we strongly believe that limiting leverage to 10:1 is highly restrictive and discriminatory against retail clients because it limits their trading choices. The proposed limit is not in the best interest of the trading public and additionally discriminates against forex dealers operating out of the United States, further limiting choice.

Hence, OANDA strongly opposes this new rule, and we believe it works against the open, accessible forex marketplace we have been trying to create. We will work hard to vigorously oppose the proposed leverage limit, and we are working together with other forex firms, such as FXCM and Gain Capital, to oppose this new rule.

I wonder after this proposal, what will be the next trick that CFTC will play? In short, it is messy. To save the trouble, I will leave my account outside U.S. Here is my another tweet about this.

NFA new margin requirements

This is not a breaking news, just a reminder to my readers since THE change is coming in around a month time. Official date given by NFA is 30th November 2009. CFTC approved NFA amendments to Section 12 of NFA rule book, which requires FDMs to collect a margin deposit of 1% of the notional value of the position held in the USD, GBP, CHF, CAD, JPY, EUR , AUD, NZD, Swedish krona, Norwegion krone and Danish krone, and 4% of the notional value of other positions.

This simply means that, more margin is required to open or hold a FX position. In short, for the major pairs mentioned above, maxim leverage of 1:100 is allowed, and 1:25 for the other pairs. Though at the first glance, this seems to be protective for novice traders who naturally loves the high leverage game  before getting burnt. I guess the most impacted group is the experienced professional traders who know how to handle their trades and prefer high leverage which allows them to achieve more profits with less capital. This will surely affect the way of conducting the trading business.

I haven’t made a thorough research on brokers’ reactions. I had a quick look at FXCM, Oanda, MB trading and Interactive Brokers. So far, FXCM is one the first to comply the new margin requirements starting 22-Nov-2009. Oanda has already met the margin requirements set up by NFA.  And I don’t see any big change for big firm like Interactive Brokers where leverage level for sport FX trading is always low. No update on MBT website so far.

Check your U.S based broker for details.

Low Class Con Artist on Twitter

One of my trading buddy on Twitter dropped me an DM yesterday, asking me if I am following a guy, let’s call it Moh (I do not want to mention his name here). The reason of asking this was because, unfortunately, my buddy followed him on twitter recently, and in return, Moh sent him a DM asking my buddy to send him $5000 by Western Union. I mean,  “WHAT IS THAT ?!?”

I did a quick check on Moh. Apparently, he is pretty active in Twitter and also,  Stocktwits. He tweets his trade calls, and also P/L. I don’t care if this guy is some super duper trader, but by sending DM, asking twitter follower to send money to him, shows everything.

$5000 ?!?  by Western Union?!?! Indeed, a real low class con artist.

Take care  and good luck my followers and readers.

My interview with TASC

tascFinally, after waited for weeks, I managed to grab a copy of Technical Analysis of Stocks and Commodities, June 2009 issue. Yes, it is a little difficult to get the latest U.S magazine in Melbourne, Australia. Well, that’s not the point of this post.

I was interviewed by Jayanthi from TASC. I shared about my experience, how did I start up, and some routine of my trading day. Here is the scanned version of my interview.

Interview with Gavin – TASC

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