That is a loaded question, for sure! And the answer is not a simple binary choice. For expediency, let's accept that the "intent" of the regulations were meant to be good (i.e. protective of the traders' welfare), but as with many things in life "intent" doesn't always match with the "reality" of consequences resulting from an action.
Exactly what US forex trading rules am I referring to?
1) Constricting limits on "LEVERAGE" and "REQUIRED MARGIN". The US rules require that the maximum leverage available is 50/1 - meaning that if you are entering a trade for one Standard Lot ($100,000) the margin required (assuming a parody price between the pairs involved) to enter the trade is $2,000. Compare this to the rest of the world, where forex brokers can offer much more lenient margin requirements, and often let the client decide what leverage is best for themselves. The most typical leverage offered is 200/1, which would make the required margin for the same trade as listed above $500. Many brokers offer leverage of 500/1 and even 1000/1, meaning that the required margin for the trade would be $200. and $100 respectively.
2) FIFO or First IN, First OUT rule. This means that if a trader has multiple trades in a single currency pair, and they want to close one of the trades, they MUST close the oldest trade FIRST regardless of profitability PRIOR to closing the other trade(s). For instance, let's say that a trader puts a "buy" trade into the EUR/USD. The price moves against their trade, but they still have the confidence in the trade and want to keep it open. They then add another buy trade at a lower price. The second trade becomes profitable and they want to close it, but the original is still negative. The trader CANNOT close the profitable trade WITHOUT FIRST TAKING THE LOSS from the UNPROFITABLE trade.
3) Ban on "HEDGING". Hedging is when the trades in the account all work as autonomous entities, and therefore you could possibly have BOTH buy trades AND sell trades open in a specific pair at the same time. Granted, this is not a situation that is applicable to all trading strategies, but there are very valid reasons why a trader would want to have the ability to hedge forex trades.
If the US forex trading regulations are in fact good, why then have these rules not been enacted by any other country?
I suggest that it is because instead of somehow "protecting" the trader, the regulations instead stifle the ability to trade successfully and profitably.
Forex trading is, by it's nature, froth with inherent risk, and is not appropriate for everyone. All forex traders should know and accept that they could lose money invested into a forex trading account, and in some circumstances could lose more than originally invested. But by imposing restrictive rules, the US regulators have not enhanced the trading conditions for traders. In the years since the regulations went into effect, the fact is that the number of US citizens losing money by trading forex has been reduced. But this is not all it seems as it is most probably because the US regulations have essentially priced most US citizens out of the forex market and have made it much harder for those remaining to trade profitably. This is evident by the vastly smaller number of US forex traders which has in turn resulted in a significant reduction in liquidity and price volatility during the US trading session since the regulations were enacted.
Profitability with forex trading is dependent on many things, but the most important is having a coherent strategy that is time tested to withstand the most grueling market conditions.
I have been trading forex full time for almost 20 years. I currently offer a teaching/mentoring program on an on-demand basis whereby my students can reach me live via the internet at their convenience and without limitation any time when the forex market is open and trading. I can help you develop your own trading strategy, or I can teach you the strategies I have used for years. If you are interested in finding out more about my mentoring service, please email me directly at MindyYost@kc.rr.com and I will send you more information.
Mentor On Demand
Forex Trading Education for Novice & Experienced Traders
Forex Trading Tools
MetaTrader4 Expert Advisors (EAs)
If the Forex Market is open, I am available to assist you - any time, any day, with live, interactive help to assist you.
- Find Trade Opportunities
- Develop Strategies
- Learn from a Full Time Trader
- Money Management
- Trade Maanagement
- Technical Analysis
- Fundamental Analysis
- And much more
Questions? Contact me directly via email at: MindyYost@kc.rr.com
Sooo, if Forex Trading is "Not for Everyone", then who exactly is it for?
Here we go with another loaded question! And once again I am going to tell you the unvarnished truth, so get ready....
Because of the high leverage, many people see the opportunity of forex as a way to turn a small investment into wealth beyond their wildest dreams! Oh yes, we can all do the math on exponentially increasing a $500. investment, assume that we can double that every 2 or 3 days (sounds reasonable... right?), and realize that after just 20 rotations they will have..... OMG..... $524,288,000.!
As the visions of sugar plums dance in your head, let me just say...
WAKE UP PEOPLE, THAT IS NOT GOING TO HAPPEN!
Greed is the first and worst destroyer of forex traders!
Forex can seem a lot like a really exciting and fun video game... it is NOT!
Forex can seem a lot like on-line gambling... it is NOT!
Forex can look like the lazy mans way to wealth... it is NOT!
If what you are looking for is the adrenalin rush that forex can often provide, then I suggest you join a roller derby team instead, as roller derby will leave you less battered and bruised in the long run.
To be successful in forex, it is important to start with reasonable attitudes and objectives and full knowledge of the associated risks.
1) Funds in your forex account should ALWAYS be considered "at risk" because there are a lot of ways to lose money. Not only can you lose money from a bad trade, but you must also consider the possibility of your broker going under, a country's currency collapsing, internet problems, your account being hacked, government regulation changes, etc. NEVER invest money into forex if it is money that you will need to live on in the foreseeable future or if the total loss of those funds would change your lifestyle.
2) Forex should ALWAYS be seen as just one element of a well diversified investment portfolio. I suggest that your forex account should contain not more than 15% of your total portfolio.
3) If you can't afford to invest at least several thousand dollars into your forex account, then you really should not be trading forex. I suggest that a reasonable absolute minimum starting fund to be $5,000, but more is better up to $100,000. More than that is not really necessary for a personal forex account. In my opinion, and from my experience teaching hundreds of students over the years, the "sweet spot" at which the probability of success and consistent profitability is best, requires starting with a balance around $50,000.
4) Be prepared to spend a lot of time learning to trade. Forex is not just another version of equities trading. Although the trading platforms work like stock trading, and the charts look like stock charts, forex IS NOT stock trading and those who try to trade it like stocks will most likely lose over time. Forex requires a unique skill set and that takes time to learn and adapt to. Knowing when NOT to trade is as important as knowing when to trade in the forex market.
5) Have a plan for your forex profits! Don't expect to let your forex profits continue to compound in your forex account. As profits accrue, regularly withdraw those profits and re-invest that money into other asset classes. My suggestion is that you invest forex profits into physical gold or real estate - hard assets that will be minimally impacted by inflation.
When properly funded and properly traded (and assuming that no catastrophic event like collapse of the world order happens), there are only two ways lose on a forex trade... 1) close the trade for a loss, or 2) margin call. With a properly funded account BOTH of these are totally preventable when using a coherent trading strategy. What this means is that - -
YES, IT IS POSSIBLE TO TRADE FOREX WITHOUT CLOSING ANY TRADE FOR A LOSS.
If you would like to learn how, sign up for my mentoring program and start learning today, but fully expect that it will take six months to a year before you will master the strategies to full competency.
All information provided by Mindy Yost, MindyYost.com, and associated videos, training materials, training sessions, trading strategies, charting set-ups, and trade alerts, as well as any other assorted and incidental documents or information, are for training and educational purposes only and should not be construed as investment advice or trade recommendations.
All information contained herein and associated information including live and recorded training sessions, documents, strategies, etc. are the property of and copyright of Mindy Yost, and reflect her opinions of forex trading, which may or may not be consistent with the majority consensus views held by others involved in this field of study.
Unauthorized replication by any means of information herein and associated materials is strictly prohibited.
Are the Forex trading rules in the US good or bad?
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Review a Week of Trading
Here is a trick to make trading forex in a MetaTrader platform easier to work with...
For people who are long-time stock traders, the thought of trading forex with a forex broker and from within a MetaTrader platform can be somewhat intimidating, but don't let that scare you off. Almost every forex broker now offers the MetaTrader 4 platform exclusively. I personally have never been impressed with the charting in MetaTrader, but it does have some other aspects that are so good that it easily makes up for what is lacking in the charting.
The solution I have found is to transact my trades in MetaTrader, but use other charting systems to watch the forex moves. By doing it this way it allows me to have an even better view of the forex price action when I am initiating my trades and allows me to get better entries.
One of the tricks I developed was to make the MetaTrader window as small as possible, so that I still have lots of space on my computer monitor available for other things. Here is a short video that explains how I set up my MetaTrader platform.
Take charge of your forex trading education and learn a forex trading system that works! Take advantage of my Workshops on Demand!
MENTORING and Forex Education services from MINDY YOST
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Here are some of my videos that you might enjoy...
Workshops on Demand! Improve your Trading today!
OPENING AN ACCOUNT WITH A FOREIGN BROKER - Cost: $1.00
2 hours 57 minutes. Find out why smart US citizen trade with FOREIGN forex brokers! Go step-by-step thru the process of opening and funding a live (or Demo account) account with a broker that offers United States traders HEDGING, NO FIFO, LEVERAGE up to 400:1, Super Low Spreads & Commissions.
Money Management for FOREX & Pitfall Avoidance - Cost: $40.00
2 hours 27 minutes. Money Management is EVERYTHING in keeping your Forex account viable, profitable and GROWING!
I will share the strategy that has worked for me for almost 20 years as well as share ways to avoid the common (and not-so-common) pitfalls that cause most forex traders to fail. THE MOST IMPORTANT FOREX VIDEO YOU WILL EVER WATCH!
STOP LOSING MONEY - ALL ABOUT HEDGING - Cost: $40.00
2 hours 5 minutes. Learn how to incorporate HEDGING no matter what trading strategy you employ. Hedging, when properly utilized can CHANGE THE GAME and let you be the profitable trader that you are meant to be!
Forex Charting in Think or Swim Charting Software - Cost: $199.00
3 hours 40 minutes. Forex trading is easier when you have great charts! Think-Or-Swim is a charting package offered through TD Ameritrade, and I have found it to be the best charting software for watching forex price action.. In this Workshop, I will not only teach you how to navigate the TOS software, but I will also teach you my proprietary chart settings that will make finding profitable trades that will have a very high probability (95%+) of success as easy as it can be. To access TOS charts, you will need to first have an account with TD Ameritrade.
Stop Taking Forex Losses! Trade like a PRO beginning TODAY!
Find out what you want to know about Forex, trading with foreign brokers, and the Magic EA.
ALL questions will be answered in a FREE Seminar on Saturday, May 25th, 2019 Noon (central time, US)
Register TODAY by clicking the "Email ME" box at the right.
Limited Seats available. No video replay will be made available.
Scalping Strategy Workshop - Cost: $150.00
Learn a FOREX SKILL that makes trading forex as EASY and FUN as a video game! This workshop is perfect for Forex Newbies or Experienced Traders! Sorry you missed the live event - but you can still buy the Video Replay!
POWER TRADER - FOREX WEEKLY SUNDAY WEBINAR - Cost: $99.00/month
A 90 minute LIVE Webinar each Sunday where I give you my analysis on what is happening in the Forex World.
I'll tell you what trade opportunities to watch for, expected price ranges for different currency pairs, how to position your trades for maximum profitability, and much more. This program is offered exclusively through Trade Smart University and you will have access to either the live presentation (5 PM Central Time) or ON DEMAND within 2 hours after the live event.
Wach and Learn to trade forex in LIVE daily sessions from 7 am to 9:30 am (central time) when the Forex markets are the busiest during the American trading session. Learn how I analyze each pair to prioritize the trade setups that I will be looking for during the trading day.
Watch this video and STOP TAKING LOSSES in your forex account!
The first auto-trading EA ever developed to NEVER TAKE A LOSS!
Workshop Video Replay is available on-demand - right here - right now.
Use this link to test the EA on your DEMO trading account for 30 days.
Use this link to PURCHASE a 4-MONTH LICENSE
for use of the EA ON YOUR LIVE MT4 ACCOUNT
(Unlimited Support Classes Included)
This EA has been developed to
FIND AND MANAGE
forex trades that have a high probability of being
successful and profitable trades
any time - day or night!
When used in conjunction with the manual trading that you already do, it can add possibly up to $2,000 to $4,000 additional profit in your account each month*!
(*depending on market conditions and assuming that you are using a trading account with a beginning balance of around $5,000 to $10,000)
This EA was developed specifically for trading with brokers that offer LOW SPREADS and LOW COMMISSIONS and DO NOT have restrictions on holding trades fro minimum time limits.
Email me at MindyYost@kc.rr.com for information about the next scheduled Hedge Fixer Class!
Do you need a Broker who offers High Leverage and Allows Hedging?
FinProTrading.com has merged with Coinexx.com
(as of December 24th, 2018)
Don't Panic! Your MetaTrader trading accounts from FinPro Trading can be accessed using the same login credentials you used with before, and you can access your Back Office accounts now thru the Coinexx.com website using the same Login credentials that you used with FinPro Trading.
This amazing EA automatically FINDS and PLACES scalping trades and then MANAGES the trades with Profit Targets and Profit Stops to maximize the profit from each trade as per instructions that YOU dictate. Even more importantly, this EA knows when NOT to trade AND will automatically CORRECT situations that create hedges!
The first auto-trading EA that you will be able to TRUST to let run run while you are asleep, at work, or just doing other things in your life. Use this EA as a stand alone auto trader or as an enhancement to your manual trading!
When funding a trading account with Coinexx, you will have to use Bitcoin or another crypto-currency to fund your account. It sounds like a pain, but it is really very easy if you know how to do it and know what to expect. Watch the videos to the left for instructions as how to do it the right way the first time.
Once you are comfortable with the process, I think you will actually like this system because it will make it EASIER to take smaller and more frequent withdrawals from your forex trading account.