CFTC Proposal – Letter to the FXCD from Jeff Langin

February 4th, 2010 1 Comment

Foreign Exchange Dealers Coalition (FXDC)

Re: CFTC Proposed Retail Forex Regulatory Changes

To Whom It May Concern.

My letter to you addresses both your concerns as well as the concerns of the CFTC.

I have read the complete script of the CFTF proposal and find a distinct lack of positive direction within its contents.

Clearly, investor protection and integrity in the Forex Industry is of utmost concern to all of us.

The CFTC has stated the need to protect Forex investors and has complained of the numerous occasions in which fraudulent actions by unscrupulous/unregulated brokers have caused massive losses by retail traders.

We all favor a cleaner industry but as it stands the good intentions of the CFTC proposal, rather than making the Forex less hazardous, would likely cause irreparable harm.

As you are aware, the first rule of risk in the Forex market is that a trader should never trade with any more capital than he/she can afford to lose. Contrary to its objectives, the principle flaw of the CFTC 1:10 leverage proposal is that of seeking to ward off risk by blatantly disregarding the industry’s first rule of risk.

I live in Canada. I’m a Canadian by birth and as such I have little to gain or lose as a trader by the CFTC proposal. However, I also have many friend and colleague traders who are Americans. Many of them look to me for leadership regardless of their citizenship or mine.

What is the answer to the CFTC proposal? Where is the solution that will help the CFTC, Brokers/Dealers and Investors alike?

I respectfully suggest the answer may be closer than you think. In fact the answer may be right next door to you, in Canada. Please consider in your thinking that Canada has an organization called IIROC (Investment Industry Regulatory Organization of Canada). IIROC is a model which you can use to counter the CFTC proposal and stave off what could be a catastrophe in the making!

I urge you to read about IIROC and Forex regulations in Canada and/or Contact Mr. Bob Wong, Vice President of MF Global Canada at 1-800-268-9294.

Sincerely,

Jeff Langin

Forex Trader and Educator

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Initial Steps-Assessing your trading style

January 18th, 2010 No Comments

This section takes a look at how new traders can best approach the markets without being overwhelmed. Being overwhelmed can be a destructive force and should be dealt with in such a way as allow a new trader to fit himself or herself into the market in a step-by-step and simplistically measured approach.

Ask yourself the right questions.

What time do you prefer to trade each day? How much time can you devote to trading while maintaining your trading as an enhancement rather than detraction from your family, lifestyle, job and your normal recreation time?

In order to assess what style of trading is best for each individual, first it’s necessary to assess our individual priorities in life. In addition we have to assess what our trading goals are and work together with both parts, finding a happy medium that won’t adversely affect either your everyday life or your trading.

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What is the Forex and How to Succeed at Trading it

January 11th, 2010 No Comments

With approximately 3.2 trillion dollars of capital exchange per day, the Forex Market is the largest daily redistribution pool of capital in the world.

The Forex market contains two distinct groups of traders. To begin with, the difference between these two groups should be carefully understood.

GROUP ONE:

Group One has a vast trading capital resources, fewer players and far more trading experience than Group Two. Group one essentially controls the game. Group One is made of mainly of Institutional players such as Banks, Commercial and Corporate Macro Accounts

GROUP TWO:

Like Group One, Group Two also has vast trading capital resources but…that is where the similarity ends.

Unlike Group One, Group two has millions of players, mostly private individuals. In addition, Group Two has by and large, far LESS experience at trading the Forex than Group One. Group Two does not trade as one cohesive unit, all in one direction, often scalping the market or trading against the directional flow created by Group One. Therefore Most of the Players in Group Two LOSE the game Most of the Time.

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Cross Currents and Contingencies in the Forex

January 10th, 2010 No Comments

The Forex market is a market in which for the most part, traders speculate on changes in future interest rates changes from one country to another. Market data accumulates day by day and week by week that will tell us that the chances of inflation in country ‘A’ are greater than country ‘B’ thus yielding higher probabilities of Central Bank increases. Results of the economic data accumulate and make up Market Consensus.

Both you and I and all of our esteemed colleagues across the globe as participant traders are the people who change market consensus and translate Market Consensus into price movement. We are all very much like the judge and the jury in the virtual court room of Market Consensus. What we are seeking is the cold hard evidence that helps us formulate a collective opinion of sentiment towards the outcome of the trial we are all presiding over.

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