ESMA and its implication

May 30, 2018 at 08:29
8,423 Views
260 Replies
Member Since Jul 23, 2018   100 posts
Oct 17, 2018 at 06:33
With 5 weeks of this Trial Period to go is there any sign, any news updates regarding what ESMA intend doing? Are they sticking with these new restrictions or are they going to go back to the old rules?
Member Since Nov 30, 2016   9 posts
Oct 19, 2018 at 09:20
The biggest implication is that traders are flowing out of EU-based brokerages into the brokerages that still offer 1:100-500 leverages. Not much will change besides that.
Member Since Feb 22, 2011   4862 posts
Oct 21, 2018 at 06:24
s1m3nk0n posted:
The biggest implication is that traders are flowing out of EU-based brokerages into the brokerages that still offer 1:100-500 leverages. Not much will change besides that.

Well US traders are already forced to follow stupid US rules over the globe
EU will maybe force the same.
Member Since Feb 22, 2011   4862 posts
Oct 24, 2018 at 13:29
The end of October is nearby.
ESMA should be either prolonged or cancelled.
IMHO it will remain here forever.
Member Since Oct 09, 2017   23 posts
Oct 24, 2018 at 14:34
They have announced that it will be prolonged.
Nothing unexpected.
It just doesn't make sense to develop these rules 2 years and remove them after only 3 months...
Member Since Oct 26, 2018   10 posts
Oct 28, 2018 at 07:42
Did they say how long they would be prolonged? Or is this just a perminant thing now?
Member Since Feb 12, 2016   427 posts
Nov 02, 2018 at 09:36
The extension was expected. I heard the same 2019 but probably will remain for longer (like forever).
Accept the loss as experience
Member Since Nov 02, 2018   10 posts
Nov 04, 2018 at 07:36
I don't know why they don't just say it is a permanent thing. It clearly is going to be renewed forever
Member Since Feb 22, 2011   4862 posts
Nov 16, 2018 at 14:19
BTW ESMA should be over
Contracts for Differences (from 1 August 2018) - a restriction on the marketing, distribution or sale of CFDs to retail investors. This restriction consists of: leverage limits on opening positions; a margin close out rule on a per account basis; a negative balance protection on a per account basis; preventing the use of incentives by a CFD provider; and a firm specific risk warning delivered in a standardised way
Next steps

MiFIR gives ESMA the power to introduce temporary intervention measures on a three monthly basis. Before the end of the three months, ESMA will review the product intervention measures and consider the need to extend them for a further three months.

At least I have not seen any decision to prolong it
Member Since Apr 18, 2017   718 posts
Nov 27, 2018 at 10:57
togr posted:
BTW ESMA should be over
Contracts for Differences (from 1 August 2018) - a restriction on the marketing, distribution or sale of CFDs to retail investors. This restriction consists of: leverage limits on opening positions; a margin close out rule on a per account basis; a negative balance protection on a per account basis; preventing the use of incentives by a CFD provider; and a firm specific risk warning delivered in a standardised way
Next steps

MiFIR gives ESMA the power to introduce temporary intervention measures on a three monthly basis. Before the end of the three months, ESMA will review the product intervention measures and consider the need to extend them for a further three months.

At least I have not seen any decision to prolong it

Thank you very much mate for your info. I really appreciate your effort! Have a good day, keep sharing your knowledge.
Member Since Jan 25, 2010   1360 posts
Dec 16, 2018 at 10:00
Greenwood posted:
I think 1:50 is enough leverage for most people. If you are good then you can still make money. If you then this will help you minimise losses

'Of course, the authorities believe that these regulations serve to limit the losses of bad traders (which they do, to an extent), but it is not the availability of leverage that wipes traders out – it’s the lack of education and discipline on the trader’s part.

In my view, the only real difference such regulations make is that instead of taking 3 months to wipe out a bad trader’s capital, it may now take 9 months. But the end result is still the same. Bad traders will keep losing until they improve. The availability of leverage has little to do with their losses.

Similar to the effect of diversification, reduced leverage protects losing traders while punishing the winning ones.'
- Christopher Lee, The Retail Forex Manifesto
https://www.pipmavens.com/i/principlefive/
Member Since Aug 27, 2017   994 posts
Dec 17, 2018 at 07:46
Basically, a number of traders are interested on only higher trading leverage; although they don’t underrated the calculations on trading leverage.
Member Since Feb 22, 2011   4862 posts
Dec 19, 2018 at 11:20
I was always postulating the fact low leverage makes you lose money.
Nowadays got this confirmed. From whom? From ESMA itself:)
https://www.leaprate.com/forex/regulations/esma-admits-more-retail-cfd-traders-lost-money-after-leverage-cap/
Member Since Apr 18, 2017   718 posts
Dec 24, 2018 at 07:34
togr posted:
I was always postulating the fact low leverage makes you lose money.
Nowadays got this confirmed. From whom? From ESMA itself:)
https://www.leaprate.com/forex/regulations/esma-admits-more-retail-cfd-traders-lost-money-after-leverage-cap/

Interesting; let me check the link 1st! I’ll share my feedback very soon to you! Thanks mate.
Member Since Dec 05, 2014   3 posts
May 30, 2019 at 14:31
Hallo :-)

Somebody told me that ESMA are planing to force non-european brokers like the Australian brokers to the same conditions as the brokers in EU under ESMA for citizins of the EU.

Do anybody know anything about this or if its true or not at all?

Cause if can find anything about it on the web or on ESMAs homepage.
Member Since Apr 18, 2017   920 posts
May 31, 2019 at 15:55
Maybe in near future the rule of ESMA would be more clear & effective but I see, till now many brokers don’t following the rules of ESMA.
Member Since Aug 29, 2018   10 posts
Jun 02, 2019 at 06:34
I have not read anything but it would not surprise me. If anyone has read anything please paste links here
Member Since Aug 27, 2017   994 posts
Jul 30, 2019 at 04:23
LikeMustard posted:
I have not read anything but it would not surprise me. If anyone has read anything please paste links here

Read anything on what? On ESMA or anything else? Thanks in advance!
Member Since Jul 23, 2019   11 posts
Jul 30, 2019 at 09:41
togr posted:
I was always postulating the fact low leverage makes you lose money.
Nowadays got this confirmed. From whom? From ESMA itself:)
https://www.leaprate.com/forex/regulations/esma-admits-more-retail-cfd-traders-lost-money-after-leverage-cap/


It is nuts that the EU just ignore the data that they do not like. So this proves that lower leverage is a bad idea and what to the EU do, they just carry on regardless.
Member Since Apr 18, 2017   920 posts
Jul 30, 2019 at 12:40
Aqissiaq posted:
togr posted:
I was always postulating the fact low leverage makes you lose money.
Nowadays got this confirmed. From whom? From ESMA itself:)
https://www.leaprate.com/forex/regulations/esma-admits-more-retail-cfd-traders-lost-money-after-leverage-cap/


It is nuts that the EU just ignore the data that they do not like. So this proves that lower leverage is a bad idea and what to the EU do, they just carry on regardless.

Even; 1:30 is really too small! I think; retail traders need 1:100 trading leverage for trading!
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