ESMA and its implication

May 30, 2018 at 08:29
8,885 Views
260 Replies
Member Since Jul 23, 2018   100 posts
Sep 05, 2018 at 07:48
Small retail traders have been made the scapegoats for the financial crisis of 2008. Instead of finding real solutions ESMA and other regulatory bodies have punished us.


Furthermore, these leverage restrictions are upside down, it is the wealthy who should be trading at lower leverages to create STABILITY in the financial markets.


….but then we've no need to worry because next time bankers can blame algorithms or sticky finger!!!
Member Since Jul 23, 2018   100 posts
Sep 05, 2018 at 07:48
I don't care what anybody says, these leverage restrictions are blatant CLASS DISCRIMINATION!!!
Member Since Jul 23, 2018   100 posts
Sep 05, 2018 at 07:54
emotionaltrader 1 Hour ago
Small retail traders have been made the scapegoats for the financial crisis of 2008. Instead of finding real solutions ESMA and other regulatory bodies have punished us.


Furthermore, these leverage restrictions are upside down, it is the wealthy who should be trading at lower leverages to create STABILITY in the financial markets.

It's not small retail traders who move markets, it's the Big Players e.g. HFT's, Banks, Hedge Funds etc and yet it's small retail traders who are being punished!!!

Member Since Jul 23, 2018   100 posts
Sep 05, 2018 at 10:22
I'd like somebody in authority to come on this forum and justify these leverage restrictions introduced by ESMA and other regulatory bodies. Don't say it's about protecting small retail traders because I know it isn't. We already had NEGATIVE BALANCE PROTECTION IN PLACE.

It's like saying that some sections of the community can drive a car and others can't because one section is more prone to accidents more than others etc.

Furthermore, if these leverage restrictions are to protect traders then why haven't they introduced restrictions in gambling e.g. Sports Betting etc.


All these new restrictions mean is that small retail traders have to trade more and risk more in order to have any chance of making a living!!!
Member Since Dec 28, 2013   171 posts
Sep 05, 2018 at 10:31
togr posted:
niceGLer posted:
Please explain me why it is no longer possible to make big $ out of a small trading account. If the leverage is around 1:30, and the true leverage is, say, 10 and the risk per trade is 5%, it takes a couple of years to gain $20´000. Let´s imagine that in the beginning the monthly gain is 20% and in the end it will be 10%, which allows a modest standard of living even in Europe. One should deposit a couple of hundred of bucks, and know what one is doing. Of course things take time.. ESMA is a nuisance, but I don't see it as such a big obstacle UNLESS somebody explains me exactly why. Is that so heavily dependent on strategy used?

You have no idea what are you talking about.
20% a month for years with 1:30 leverage is pure nonsense.

So, then please explain me why is it not working?
I am thinking of a situation (right in the beginning), where the trade lot size is 0.01 lots, and the true leverage is around 10, and the leverage per account is said 30. Let's say the account has a balance of $100. It is fairly possible to average 10 pips daily by short trades with a duration of less than 8 hours. That makes $20 monthly (in the beginning). Yeah, there are caveats like when to increase the lot size, and sticking consistently on working strategy. Also, there is no life other than this (or learn programming MQL4/5). But then, with an EA approach the situations can change, which quickly can render the currently working EA obsolete.
Member Since Dec 28, 2013   171 posts
Sep 05, 2018 at 10:40
I didn't check what would the true leverage be with the conditions I described (took it from my memories of my trading) but my point is that it should be possible, and if this is not possible then please explain why.

Member Since Jul 23, 2018   100 posts
Sep 05, 2018 at 10:52
niceGLer 10 Minutes ago
togr posted:
niceGLer posted:
Please explain me why it is no longer possible to make big $ out of a small trading account. If the leverage is around 1:30, and the true leverage is, say, 10 and the risk per trade is 5%, it takes a couple of years to gain $20´000. Let´s imagine that in the beginning the monthly gain is 20% and in the end it will be 10%, which allows a modest standard of living even in Europe. One should deposit a couple of hundred of bucks, and know what one is doing. Of course things take time.. ESMA is a nuisance, but I don't see it as such a big obstacle UNLESS somebody explains me exactly why. Is that so heavily dependent on strategy used?

You have no idea what are you talking about.
20% a month for years with 1:30 leverage is pure nonsense.

So, then please explain me why is it not working?
I am thinking of a situation (right in the beginning), where the trade lot size is 0.01 lots, and the true leverage is around 10, and the leverage per account is said 30. Let's say the account has a balance of $100. It is fairly possible to average 10 pips daily by short trades with a duration of less than 8 hours. That makes $20 monthly (in the beginning). Yeah, there are caveats like when to increase the lot size, and sticking consistently on working strategy. Also, there is no life other than this (or learn programming MQL4/5). But then, with an EA approach the situations can change, which quickly can render the currently working EA obsolete.

Cos you're talking £3 a day that's £24 per week that is IF AND A BIG IF all your trades go in your favour. That's hardly enough to make a living from.

You'd have to be winning 100% of the time!!!


Before you could start a small trading account with £100 and turn that into £400 @ 500:1 leverage within minutes, hours, within a day. At least at the end of the day you had the option whether to take profit or not.



Member Since Jan 27, 2013   447 posts
Sep 05, 2018 at 10:57
niceGLer posted:
I didn't check what would the true leverage be with the conditions I described (took it from my memories of my trading) but my point is that it should be possible, and if this is not possible then please explain why.

togr is right.
Trade yourself live with an account of 100$ at leverage 1:30. Stop talking and start doing. After two-three weeks come here again and tell us about the 'nice' experience how you lost your account.
Member Since Dec 28, 2013   171 posts
Sep 05, 2018 at 12:15
ovisun posted:
niceGLer posted:
I didn't check what would the true leverage be with the conditions I described (took it from my memories of my trading) but my point is that it should be possible, and if this is not possible then please explain why.

togr is right.
Trade yourself live with an account of 100$ at leverage 1:30. Stop talking and start doing. After two-three weeks come here again and tell us about the 'nice' experience how you lost your account.

I am currently experimenting with an account in similar conditions, true leverage being exactly 30. I wouldn't judge it as a failure right away. One should select the spots really carefully.. One problem arises, when it is time to increase lot size, and probaböy that is when the ESMA restriction hurts. Recommendation of trading in hgher time frames is BS -that is my opinion.
Member Since Jan 27, 2013   447 posts
Sep 05, 2018 at 13:23
niceGLer posted:

I am currently experimenting with an account in similar conditions, true leverage being exactly 30. I wouldn't judge it as a failure right away. One should select the spots really carefully.. One problem arises, when it is time to increase lot size, and probaböy that is when the ESMA restriction hurts. Recommendation of trading in hgher time frames is BS -that is my opinion.

Please link your account here in myfxbook for us to see the evolution of such account.

Member Since Dec 28, 2013   171 posts
Sep 05, 2018 at 13:33
emotionaltrader posted:

Cos you're talking £3 a day that's £24 per week that is IF AND A BIG IF all your trades go in your favour. That's hardly enough to make a living from.

You'd have to be winning 100% of the time!!!


Before you could start a small trading account with £100 and turn that into £400 @ 500:1 leverage within minutes, hours, within a day. At least at the end of the day you had the option whether to take profit or not.



I don't claim that it is possible to make living with a couple of hundred dollars or pounds. Maybe you had a different strategy than I. I am relying on compounding effect. Yes, the strategy used should have a high winrate.
Member Since Dec 28, 2013   171 posts
Sep 05, 2018 at 14:24
ovisun posted:
niceGLer posted:

I am currently experimenting with an account in similar conditions, true leverage being exactly 30. I wouldn't judge it as a failure right away. One should select the spots really carefully.. One problem arises, when it is time to increase lot size, and probaböy that is when the ESMA restriction hurts. Recommendation of trading in hgher time frames is BS -that is my opinion.

Please link your account here in myfxbook for us to see the evolution of such account.


Later, buddy, later... I don't have much capital so I have to try this way. I understand that there are much more viable and less stressful long term approaches, but they are not applicable for me.

I had a hunch this was.coming :)
Member Since Oct 09, 2017   23 posts
Sep 05, 2018 at 14:25
Hold your horses!
It's possible to make a living with a small starting sum.
The only thing is that you can't rely on making a living right off the bat.
You just have to invest time. A lot of time.

Member Since Jul 23, 2018   100 posts
Sep 05, 2018 at 14:26
Leverage makes a massive difference (See charts above)

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Member Since Jul 23, 2018   100 posts
Sep 06, 2018 at 07:08
Another example of trading with higher leverage!!!

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Member Since Jul 23, 2018   100 posts
Sep 06, 2018 at 07:08
I was right!

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Member Since Jul 23, 2018   100 posts
Sep 06, 2018 at 07:08
This is with Leverage of 1:500 before the Leverage restrictions. Sorry can't find any other examples!

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Member Since Jul 23, 2018   100 posts
Sep 10, 2018 at 14:31
I JUST WANT TO SAY A MASSIVE THANK YOU TO ESMA FOR ALL THE CONCERN THEY'VE SHOWN FOR MY FINANCIAL WELFARE!!!
Member Since Dec 28, 2013   171 posts
Sep 11, 2018 at 14:55
You have a wrong approach, dude. You were not trading with high leverage, but you were discounting your salary, savings or whatever onto your trading. True leverage = trade size / account size. Now, if you want to continue with same style you should move on higher time frames. That is my conclusion of what I've been reading from your messages.
Member Since Aug 31, 2018   12 posts
Sep 11, 2018 at 14:57
ESMA really is a kick in the balls. Another ill thought out piece of legislation that idiots think is a good thing but experts know is BS
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