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Best Regards,

Jose Leon

English:

NFA has received notice that the Commodity Futures Trading Commission has approved new NFA Compliance Rule 2-43 regarding forex orders. The prohibition on carrying offsetting transactions will be effective for any positions established after May 15, 2009. The requirements regarding price adjustments will become effective as to all customer orders executed after June 12, 2009.

Offsetting Transactions

New Compliance Rule 2-43(b) requires an FDM to offset positions in a customer account on a first-in, first-out basis, thereby prohibiting a trading practice commonly referred to as “hedging.” A customer may, however, direct the FDM to offset same-size transactions even if there are older transactions of a different size. Rule 2-43(b) is effective for any positions established after May 15, 2009. Offsetting positions that were established prior to the effective date do not have to be liquidated, but once either position is closed out after May 15, it may not be reestablished as a hedge.

You can read more about this news in these links:

http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=2273

http://www.nfa.futures.org/news/PDF/…Adj_112408.pdf

Español:

Parece ser que la CTFC ha sacado una orden que la NFA va a poner en práctica referente a la prohibición del hedging a partir del 15 de Mayo.

Podéis leer más de esta noticia (traducidla con babelfish.altavista.com) en el texto y los enlaces publicados más arriba.

English:

I would like to recommend you this Forum about Forex:

http://www.forexpros.com/forums/

I only visit the Spanish section of this forum and there I like to post some comments about EA,s (forex robots), strategies, technical analysis, Brokers, etc. There are many sections, not only about Forex: cfds, futures, stock market, indexes, etc. I know that this English section is also very good. They also have a section where the Broker Mbtrading offers Support or Customer Service.

Give them a chance!

Español:

Me gustaría recomendaros este Foro sobre Forex:

http://www.forexpros.es/forums/

En él suelo postear sobre EA,s (robots de Forex), estrategias, análisis técnico, Brokers, etc. Tiene muchas secciones, no únicamente sobre Forex, también sobre cfd,s, futuros, Bolsa, índices, etc. Incluso tiene una sección de soporte del Broker Mbtrading.

¡Dadle una oportunidad!

English:

Great news for Traders who were wishing or looking for an ECN broker with mt4 platform, very soon you will be able to trade with your EA or with mt4 indicators with variable spread, real market and no dealing desk execution.

Check this link:

http://www.metaspotfx.com/

Español:

Buenas noticias para todos los Traders que estaban buscando y deseando tradear con la plataforma mt4 en un broker ECN. Dentro de poco podrás tradear en un broker ECN con tu EA, los indicadores de mt4, spreads variables, mercado real y sin dealing desk.

Pincha este enlace:

http://www.metaspotfx.com

English:

I don´t know if you remember what I posted about a semi-martingale system with a lot of success in Forex Forums and by many users, but this original EA is very expensive: almost $400.

I am coding with a friend a clone of this system and we want it as good as the original with the same or even more features. If it goes well the price would be only $60 or 40 eur, not almost $400 like the original. I don´t see any problem to make all of this because the martingale system is very old yet and we can add it more options by request. Nobody is the owner of this system, the most important thing is the quality of the code and the EA.

Meanwhile I continue testing the original EA (I bought it some time ago) with different progressions and limiting the risk as if I was trading with a stop loss in every trade.

There are different methods to avoid the risk of using a martingale system

Español:

No sé si recordáis mi post sobre un EA basado en un sistema semi-martingale que tuvo bastante éxito en diferentes Foros y por usuarios pero que cuesta bastante: casi $400 (dólares).

Junto a un amigo estamos haciendo poco a poco un clon de este EA lo más parecido al original y con las mismas características o incluso más. Si sale bien y os interesa costaría $60 o 40 euros la unidad, no casi $400 como el original. No veo mal hacer algo así porque un sistema martingale con más o menos opciones no es propiedad de nadie y es un método ya muy antiguo, y se podrían añadir más opciones por petición.

Mientras tanto voy probando con el EA original (lo compré hace ya bastante tiempo) en diferentes progresiones, limitando el riesgo de la cuenta como si se tradeara con un stop loss en cada posición abierta.

Hay diferentes maneras de evitar el riesgo que supone usar un método martingale

English:

Analyzing the mistakes I committed when I began to trade Forex and seeing that many beginners continue with the same mistakes, I would like to contribute with my help to those thinking to trade Forex now.

1.- Which broker must I choose to trade.

If you are really comfortable trading in a mt4 (metatrader4) platform you should know that many brokers offering this platform are not totally honest and they use a script or plugin inside their servers called “virtual dealer” with many options:

- Freezing the server when they consider it necessary.

- When you open a new position the price can be opened many pips above or below the real price.

- Reaching your stop loss even when they price has never reached that level. A dealing desk broker knows all the positions opened, where your stop loss are placed, what you are doing, EVERYTHING. And they usually trade against you because they know that 95% of traders lose money and so they gain. If they see that you win many times at once then they can take measures against your trades.

- Delays when you want to open or close a trade.

etc…

You can see all the options of this plugin here:

http://noponzi.com/wp-content/upload…ualdealer1.jpg

http://noponzi.com/wp-content/upload…ualdealer2.jpg

Anyway, if you do not want to use an ECN broker to avoid these problems, you may think not placing a real stop loss and waiting with a mental stop loss to close that position (not showing your cards to the enemy). But this option is not always possible and the broker could freeze the server more than 1 hour (I know it from my past experience) and then you will get a lot of problems to find a solution with the broker about your losses (you agreed with their terms and conditions when you opened your account, take a look at them). But if they paralize the server and you had placed your stop loss yet, and later you check that your positions should have been closed, then the broker will fix your problem.

So, it is very difficult to find a solution when you trade with dealing desk brokers and you will never trade relaxed or safe. I talk from my experience.

My recommendation: choose a reliable ECN broker.

BEFORE TRADING IN A REAL ACCOUNT WITH REAL MONEY, TRADE THE FOREX PLATFORM IN DEMO DURING SOME MONTHS. IT´S NOT THE SAME TRADING WITH REAL MONEY THAN DEMO DUE TO PSYCHOLOGY (YOU ARE NOT USING REAL MONEY) BUT YOU SHOULD LEARN HOW TO USE THE PLATFORM AND OPERATIONS WELL BEFORE RISKING YOUR MONEY.

2.- How much money to deposit and money management.

You should risk less than 5% of your equity or available balance (I prefer only 3%).

For example: if your broker only offers you 1:100 leverage where 1 pip = about $1, and you deposit $1000 then:

$1000 x 5% = $50, so you should only risk $50 and remember: $1 = 1 pip in your broker, so you should only risk about 50 pips.

If your broker lets you change the leverage to 1:400 (in many brokers with this leverage 10 pips = about $1) then you can risk 500 pips = $50, but remember that you will only gain $1 with 10 pips. In this case you can open 10 positions with a stop loss of 50 pips each one (you risk 5% of your equity). If you are trading with 1:100 leverage and with  1 pip = $1 condition, then you can only risk a stop loss of 50 pips in 1 trade, or 25 pips in 2 trades, and you will manage the risk very well.

If you see that your opened trade is with some profit yet, then you should move your stop loss to break even (the price where your trade was opened), so if the price reverses against you then you are not risking your money in that trade yet (you do not win and you do not lose) and you can open a new trade in a different pair following a good money management. An example: when you are in +30 pips, you must decide it with your strategy.

Risk-reward: you should open your position if you see that you can gain more than you are risking. If the rules of your strategy tells you that it is possible to reach 60 pips and you are risking in your stop loss 30 pips then it is ok (in this case 1:2 risk-reward). But never risk more than you expect to reach. If your stop loss is 30 pips and you are looking to gain only 15 pips then look for another and best opportunity in a different pair. The best opportunity is reaching more than 1:1 (if you risk 30 pips in your stop loss then you should look for an opportunity to gain more than 30 pips).

For example (1:2 risk-reward):

Stop loss = 30 pips

Possible target = 60 pips

In this case if you lose 6 trades then you are losing -180 pips and if you gain 4 trades then you are gaining +240 pips: +60 pips profit.

Make your calculations if the risk-reward is 1:3 (you gain money only with 3 trades, even losing 7).

3.- Strategy.

You should build or follow a strategy that let your emotions, greed and fear away. Psychology is one of the most important points (with a good money management) to trade Forex.

In a good strategy you must cut your losses soon and let your profit run, protecting the trades. Yes, it is very difficult for a newbie to cut the losses soon because it is against human nature. I mean that all of us would like to close a trade in profit soon to gain that money and if we are losing in a negative position we always think: it can reverses later, I do not want to lose what I have gained all these days… and that is a suicide when you trade Forex. You can also lose all your money.

Example: you are without a stop loss in -50 pips and when you think that your trade can reverses it goes to -100, -200 and now you do not want to lose such amount of money… (I should have closed that position before…), I am sure that it sounds to you a lot

So, close your losses soon and look for another opportunity. If your money management and psychology are good then you will gain more than you lose sooner or later.

If you know how to follow the general trend, do it!, never go against the general trend.

NEVER TRADE MORE THAN NECESSARY IF YOU HAVE GAINED A GOOD MONEY IN A PARTICULAR DAY.

4.- Psychology

- Apply a good money management and follow a strategy with few options to change your own rules.

- If you lose some money DO NOT open higher lots to recover your losses. It is very dangerous and you can lose again with that higher lot and so you are letting your entire account in jeopardy not following a good money management. Be patient, if you know that your money management, psychology and strategy are right then you will recover those losses soon.

- Never be afraid or feel bad to cut your losses. Think that this is not an easy business and losses are part of the game. If you know that you will gain more than you lose with your money management and risk-reward, then you will be happy even with those losses, and more relaxed.

- Try to find out what timeframe suits you better with your psychology. Maybe it is trading in 1 hour chart and finishing your trading in some hours, or it is daily chart watching the chart few times a day (be carefull with high-impact news, they can change the trend), etc. Think that Market is always right, not yourself.

Surely I leave many things back but I hope that this post will help you if you are thinking to trade Forex.

Español:

Analizando los errores que yo mismo cometía cuando empecé a tradear y viendo que se siguen cometiendo por los que empiezan, me gustaría aportar mi ayuda para los principiantes que se están animando a tradear en Forex.

1.- Lo primero a tener en cuenta es el broker a elegir. 

Si estáis ya acostumbrados a tradear en una plataforma mt4 (metatrader4) debéis saber que muchos brokers que usan esta plataforma no actúan honestamente y disponen de un script o plugin en el servidor llamado “virtual dealer” cuyas misiones son:

- Paralizar el servidor el tiempo que deseen acorde a su conveniencia.
- Que cuando se abra una posición lo haga un número de pips por encima o por debajo de lo normal.
- Alcanzar los stop loss que tengáis puestos aunque en realidad el precio nunca haya alcanzado dicho precio. Tened en cuenta que un broker con dealing-desk sabe lo que abres, cierras, tu balance… TODO. Y normalmente tradean al contrario que lo que tu mismo abres, saben que el 95% de los traders pierden y por tanto ellos ganan. A fin de cuentas: tradean contra ti y si ven que puedes ganar pueden tomar medidas contra ello. 
- Retraso al abrir o cerrar posiciones.
etc…

Podéis ver algo de este plugin y sus opciones aquí:

http://noponzi.com/wp-content/upload…ualdealer1.jpg

http://noponzi.com/wp-content/upload…ualdealer2.jpg

Aún así, si usáis un broker no-ECN otra opción sería no poner los stop loss en la plataforma (no enseñar vuestras cartas al enemigo) y tenerlo en mente a la hora de cerrar vuestras posiciones. Pero esto no es siempre posible y sin tener estos stop loss puestos podrían paralizar el servidor durante largo tiempo con las consiguientes pérdidas considerables, en cambio con los stop loss puestos podéis demostrar al broker que esas posiciones deberían haberse cerrado al llegar a vuestros stop loss y os la tienen que respetar. Es decir: sea cual sea la decisión es muy difícil tradear con seguridad y tranquilidad en un broker no-ECN o deshonesto.
Mi recomendación: un broker ECN fiable.

ANTES DE TRADEAR CON DINERO REAL EN UNA CUENTA REAL, PROBAD DURANTE VARIOS MESES EN DEMO. NO SE TRADEA DE IGUAL FORMA EN DEMO QUE EN REAL, DEBIDO SOBRE TODO A LA PSICOLOGIA DIFERENTE RESPECTO A DINERO REAL CON FICTICIO, PERO AL MENOS SE APRENDE A USAR LA PLATAFORMA Y LAS OPERACIONES ANTES DE TRADEAR CON DINERO.

2.- Capital a depositar y manejo del riesgo

Aquí entra en juego cómo vais a manejar vuestro riesgo. Mi recomendación es que deberíais arriesgar en todas vuestras posiciones abiertas un porcentaje inferior al 5% de vuestra equidad (yo prefiero el 3%). Si no tenéis nada abierto entonces lógicamente podéis calcularlo desde vuestro balance disponible.
Por ejemplo, un broker que sólo ofrezca un apalancamiento de 1:100 y dónde 1 lote equivalga a 1 dólar el pip, si ingresáis $1000 podéis hacer un cálculo aproximado:

$1000 x 5% = 50, por lo que deberíais arriesgar únicamente $50, y siendo cada 1 pip = $1 significa que aproximadamente deberíais arriesgar únicamente 50 pips.

Si el broker tiene opción de cambiar el apalancamiento podéis pedir un 1:400, con lo que normalmente tendríais que 10 pips equivale a $1. Mirando el caso anterior significaría que ahora podéis arriesgar no 50 pips sino 500 pips en vuestras posiciones abiertas, pero en consecuencia para ganar $1 tenéis que ganar 10 pips.

Un ejemplo: tener abiertas hasta 10 posiciones con stop loss de 50 pips = 500 pips (arriesgando un 5% de vuestra equidad). Lógicamente en 1:100 podéis tener abiertas a la vez 2 posiciones con stop loss de 25 pips o una única posición con stop loss de 50 pips, y así llevaríais un buen control del riesgo.

En el caso de que una de vuestras posiciones abiertas esté en unos buenos beneficios (según cada cual, por ejemplo digamos 30 pips de ganancias en ese momento), podéis poner el stop loss en el precio que lo abrísteis (lo que llaman break even) y de esta forma ya tenéis esa posición asegurada y podéis abrir otra nueva con el mismo manejo del riesgo.

Tened en cuenta a la hora de abrir una posición si merece la pena por tener un buen riesgo-recompensa. Si estáis usando stop loss de 30 pips y véis que tenéis bastantes posibilidades de alcanzar como mínimo esos 30 pips, el doble o el triple (lo ideal es un 1:2 o superior) seguid adelante y abridla. Si véis que sólo vais a ganar unos 15 pips pero estáis arriesgando 30 en el stop loss entonces esperad otra oportunidad o analizar otro par.

Ejemplo:
stop loss: 30
posible target: 60 pips

En este caso si perdéis 6 posiciones perderéis 180 pips, y si sólo ganáis 4 posiciones ganáis 240 pips. La diferencia a vuestro favor es de +60 pips. Haced los cálculos si el riesgo-recompensa resulta ser de 1:3 en vez de 1:2 y entenderéis a qué me refiero.

3.- Estrategia

Lo ideal es construir o seguir una estrategia donde tenga poca cabida vuestras emociones, temores, avaricia, etc. Aquí es importante tener en cuenta la psicología a la hora de tradear (próximo punto). Es uno de los puntos más importantes en Forex junto al manejo del riesgo y lo mejor es que vuestra estrategia contemple siempre estos puntos.

En una buena estrategia es imprescindible cortar pronto las pérdidas cuando sepáis que vuestra posición ha ido en contra de vuestras normas (algo que va en contra de la naturaleza humana y lo más dificil de hacer para un novato en Forex), asegurar las ganancias para manejar bien el riesgo y dejarlas correr hasta el punto en que sepáis por vuestra estrategia que puede revertir en vuestra contra o hasta que veáis que podéis cerrar con suficientes pips y un buen riesgo-recompensa. 

Digo “en contra de la naturaleza humana” porque solemos pensar en retirar pronto lo que estamos ganando y si vamos perdiendo solemos pensar: ya irá a nuestro favor más tarde o revertirá. Y esto en trading es un suicidio que puede acabar con vuestra cuenta.

Si sabes cómo seguir la tendencia general de un par, !hazlo!, si es posible nunca trades contra dicha tendencia.

NUNCA TRADEAR DE MÁS SI YA HABÉIS CONSEGUIDO UN BUEN BENEFICIO ESE DÍA.

4.- Psicología

- Aplicar un buen manejo del riesgo y una estrategia donde queden pocas opciones para cambiar vuestras propias reglas y seguidlas a rajatabla sin miedo.
- No caer nunca en que si habéis perdido x dinero debéis abrir lotes mucho mayores para recuperar la cuenta. Esto es tremendamente peligroso y lo que suele ocurrir es que volvéis a perder y ahora mucho más, incluso haciendo peligrar la cuenta. Tened paciencia, tarde o temprano iréis recuperando lo perdido si vuestro manejo del riesgo, estrategia y en este caso psicología es correcta.
- No os sintáis mal por cerrar posiciones en pérdidas. Pensad siempre que esto no es un negocio sencillo y que las pérdidas forman parte del juego. Si tenéis claro que vuestra estrategia+manejo del riesgo implica ganar muchas más veces que perder, y que el riesgo-reconpensa es el adecuado, entonces sentíos tranquilos y no darle importancia.

- Averiguad qué tiempo se adapta mejor a vuestra psicología: tradear en chart de 1h y terminar el día en varias horas de tradeo (un número suficiente de pips a ganar o perder), tradear en chart diario y mirar poco el chart durante el día (peligro de las noticias de alto impacto en este caso), etc… Es muy importante saber adaptarse al mercado y seguirlo, el mercado siempre tiene razón: nunca tu.

Seguro que me dejo muchas cosas en el tintero pero espero que os sirva de ayuda o guía en vuestro camino como traders, y sobre todo que aclare muchos aspectos del trading a los que empiezan.

English:

Recently Justin Leblang, who works in MBTrading broker as Support & Customer Service, and answering doubts or problems in many Forums (not only by email), told me that we also have Support & Customer Service in Spanish language and how to contact this person by phone or email.

Yesterday I saw this person in a Spanish network where I post about forex and investments from time to time: invertired. So I contacted him by PM and he gave me permission to talk in my Blog about him.

How to contact him:

Name: Ramon Valenzuela

Email: r.valenzuela@mbtrading.com

Telephone (USA): 480-304-5406 

I hope it helps you when you get a problem or doubt with this Broker.

Español:

Recientemente Justin Leblang, que trabaja de soporte para el broker MBTrading y que postea en muchos Foros ayudando sobre las dudas o problemas con la plataforma o este Broker, no solo por email, me comunicó que había también soporte en español dentro de MBTrading, tanto telefónicamente como por email. 

Ayer mismo esta persona de habla hispana que trabaja para MBTrading entró en uno de las redes donde estoy: invertired y nos pusimos en contacto, dándome permiso para poder postear en mi Blog sobre él y la forma de contactarle.

Aquí os dejo con su contacto:

Nombre: Ramón Valenzuela

Email: r.valenzuela@mbtrading.com

Teléfono (USA): (+1) 480-304-5406 

Espero que si tradeáis en este Broker os sirva de ayuda si tenéis algún problema o duda.

As you know I had a very bad experience with InterbankFX Forex Broker, in my opinion they scammed me and many other traders, and not only 1 time… If you want to trade seriously please avoid this Broker!!

Well, I like a lot the mt4 platform and although most of Brokers using it are only bucketshops (if I had a good amount of money I would change to an ECN broker) you will find that some of them can be more honest than others.

I spent many time searching and surfing Forums, websites, Blogs, etc to know about other mt4 brokers and I found Alpari to be the best in all comments. So I thought to open a demo and a real account with them. After probing the demo account before then I began to trade with the real account.

I am greatly surprised. The spreads are low (gbp/usd:3, eur/jpy:3, gbp/jpy:7…) and with all the volatility of these days I have not seen Alpari increasing the spreads or the server frozen/stopped and I am trading a lot in different hours!!

So in my experience until now Alpari is great.

The bad thing: they are only accepting bank transfers and so you must pay a high comission when you deposit (from your local Bank and then a little more from Alpari due to the Bank that they use). But they are thinking to accept debit/credit cards in the future.

I will keep you updated about this Broker.

A good article and video in youtube from Felix Homogratus (http://www.forexbastards.com):

If you are a forex trader, you need information in this email for your survival as a forex trader. Some of my emails, like my signals are optional to read, and if you skip them, it simply means you may miss some good trades.

There will be times when I will send emails with information that you won’t be able to get anywhere else, and that information is essential for your forex survival. This is one of those emails.
This email consists of two parts. First watch the video by following the link below, then read the second part of the email after the video, because if you don’t, some things I say in the written part will not make sense to you, because they relate to the video.
Here is the video:
http://www.youtube.com/watch?v=EQUlbxubHx4

So in the video, I have clearly layed out to you how different forex brokers are structured. There were no opinions involved in that video, and I took no sides between bucket shop business structure and ECN business structure. But I hope it gave you a lot more clarity on both issues. As you saw the customer funds checking accounts in the video, you probably understood that because your orders in a bucket shop never get passed into the real market, it’s very easy for a bucket shop broker to mismanage your customer funds, and spend them ahead of time on the assumption that the funds will eventually be lost by you as a trader. That’s exactly what happened with Refco. They spent the money from their customer funds account, before traders lost it, and when traders asked for withdrawals, there was no money to pay them

As you probably saw, ECN broker also has customer funds checking account, but in order for them to execute your trades through the banks, most of your money will have to be deposited from the customer funds checking account into various trading accounts of banks. The minute they spend any of this money, the banks cut off their liquidity to them, so it would be very difficult for an ECN broker to just spend the customer funds money. In fact, I think it’s nearly impossible, because the effect of that would immediately collapse their business structure.

A lot of forex traders place a lot of hope on the fact that their broker is NFA regulated. I hate to tell you this, but though NFA regulation is very good, that doesn’t mean as much as most people think it does. Before I start talking about this, I want to tell you that what I express below is a matter of my own opinion and research, and I may be wrong about my opinions and research.

As far as I know, NFA stands for National Futures Association, and it’s a private company that collects fees from its members, and in exchange for the fees, they provide certain services to the members, like audits. The way NFA works is very similar to a Condominimum Association. Remember, it’s an association, not an organization. That means that members of that association can change their own rules. Like a board of members in a condo association consists of members that are usually tenants, they can vote on things, and decide how much every member of the association should pay, and what kind of duties the association will perform.

If you live in a Condo association, you have to abide by their rules, but nothing prohibits you from selling your condo, and buying a condo in another association. Similar with NFA, the membership is voluntary, and if somebody doesn’t like the rules, they can leave, end of story. Of course if the NFA thinks that one of their members is doing something illegal, they report them to a government agency, and that government agency may take action, and shut down a company, but as far as I know, NFA has no power of doing it themselves. Similar to your condo association, if you do something illegal, they call the police and report you, and you pay the consequences. This distinction, is extremely crucial to understand.

People think that when a forex broker is NFA regulated, it conducts honest business, but one has nothing to do with another. Legal business and honest business are two completely different things. If a forex broker manipulates the prices and takes out stop/losses of their traders, that’s dishonest, but legal. If a forex broker changes your entry prices and decides to null your profits, that’s dishonest, but it’s legal.

Most rules in the NFA are set around how broker manages its customer funds account, and make sure there is no money laundering happening. NFA has rules, but those rules have nothing to do with what’s legal or illegal. If your condo association has a rule not to dry your clothes on the balcony, but you still do it, you are breaking their rules, but you are not doing anything illegal. What they can do against you is keep warning you not to do it, and eventually try to force you to leave the association by selling your property. According to what I know, despite of the mostly non-important rules, set by the NFA, brokers break those rules all the time, and the NFA has to decide whether to kick them out of the association or not. No matter how much they may want this, but they can’t shut someone down for just breaking their rules. Their rules have very little to do with the law.

There are now talks about the NFA raising minimum net capital requirement for the brokers. At first this seems like an action to protect traders from dishonest brokers, but nothing can be further from the truth. I think everybody knows that most forex brokers are bucketshops, so it should be obvious that most members in the NFA are probably people from big influential bucketshops. What is the biggest business threat for the big bucketshops? The biggest threat is the small bucketshops and ECN brokers, because small bucketshops and ECNs, take some of their clients, and create a lot of competition. How can this problem be resolved? Well, it’s very simple, raise the net capital requirement, which is nothing else but stale funds sitting in the customer funds checking account of a broker. Now, if a broker has a lot of net capital sitting in their checking account, that means one thing, and one thing only. It means that the orders are not being executed in the real market. Because if you watch the video, if a broker was to execute the orders at the big banks, the money wouldn’t be sitting in the useless customer funds account, instead the money would be trading at the big banks’ trading accounts.

So what will this new rule will do? Some people think that it would drive a lot of brokers out of business, and I used to think that too, before I did more research. This has nothing to do with brokers going out of business, NFA has no such power. This would simply mean that small bucketshop brokers with not enough net capital requirement will simply be kicked out of the NFA, and wouldn’t be able to display their logo on their website. That’s all. The only thing this new rule would do is monopolize the NFA, and instead of having a lot of members, it would have only several big bucketshop members. And those big bucketshop members will use their position in the NFA as marketing tools to detract traders from smaller brokers that won’t be NFA regulated. The bigger ECN brokers will have to make a choice whether the NFA badge is important to them. If it is, they’ll have to take 6 million out of their pocket, in order to meet that requirement, because remember, according to the video you should’ve watched, with their structure, they may have tens and even hundreds of millions of dollars, but they are not sitting in their customers funds checking account, instead the funds are sitting at trading accounts of major banks.

So if the minimum net cap requirement is initiated by the NFA, here is what would happen. A lot of smaller bucketshop brokers and possibly some ECN-type brokers will be kicked out of the NFA. They will still keep operating, and will probably not go anywhere. What this will do is the big brokers will be able to tell traders that they are NFA regulated, and traders should not trust the other brokers that are not NFA regulated. That will probably attract more clients to them, because the clients of smaller brokers will not be fully educated and will be scared by their broker being kicked out of the NFA.
So what benefits does this large minimum funds requirement do to the traders? Well…I think there is no benefits, but only harm. A lot of the smaller bucket shop brokers that will be kicked out of the NFA will probalby be able to operate more loosely, because they wouldn’t be audited by the NFA. Some honest brokers that actually pass their orders into the real market will probably leave the NFA, and confused traders will change their accounts to the big bucket shops that are the biggest manipulators in forex. And because NFA will consist of only few bucketshop members, a lot of new traders will choose them over all the other brokers, and will simply be victims of the same dishonest manipulations that every bucketshop customer has experienced.

So I think this whole thing with minimum cap requirement is nothing else but a political move from the large bucketshop operations, and they are already starting to use this rumor for their marketing purposes of attracting more clients.
What are your thoughts on this whole situation? Please submit your comment in my youtube video that you should’ve watched before reading this article. Here is the link again: http://www.youtube.com/watch?v=EQUlbxubHx4

Thanks
-Felix

If you are a serious trader or you are beginning to trade, you should consider to read this article about common mistakes:

http://www.thetradingauthority.com/artman/publish/article_223.php