ESMA and its implication

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?

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.

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.

The end of October is nearby.
ESMA should be either prolonged or cancelled.
IMHO it will remain here forever.

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...

Did they say how long they would be prolonged? Or is this just a perminant thing now?

The extension was expected. I heard the same 2019 but probably will remain for longer (like forever).

I don't know why they don't just say it is a permanent thing. It clearly is going to be renewed forever

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

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.

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/

Basically, a number of traders are interested on only higher trading leverage; although they don’t underrated the calculations on trading leverage.

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/

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.

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.

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.

I have not read anything but it would not surprise me. If anyone has read anything please paste links here

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!

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.