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01/04/18

ESMA is rolling out a new set of regulations that will cut the leverage when trading financial products for the retail traders.

Up until very recently retail brokers were offering ridiculously large margins to trade highly desirable products such as forex and CFDs. We're talking 500:1 leverage and the sorts. Additionally, people were also roped into trading "binary options" which inherently have a negative risk/reward. Statistically this makes it impossible to be profitable without a 90% winning average. Yes, average. Luckily for everyone involved, ESMA is rightfully scrapping binary options altogether.

Impact on Market Stalkers courses: none!

Our courses advocate a use of very strict risk percentage per trade in relation to the trading capital available. We also advocate to only have maximum two open active positions at any time. This means that even when high leverage was an option, your "margin requirements" would never even come close to busting the margin due to high percentage per trade in relation to available trading capital. This means that although the available margin with the new rules will be a lot less, you need not worry about the method or our strategies. In fact, Dodd Frank regulation in the US did something similar years ago - they slashed the retail fx trading margins to 50:1.

ESMA goes a step further, placing the margins for major fx pairs at 30:1, CFDs at 20:1 and cryptos at 2:1.
When it comes to cryptocurrencies, we advise only long term strategies and only buying them for a buy-and-hold long term gain. Therefore using a speadbetting broker platform doesn't even come into that. You must have enough underlying capital to even get involved in cryptos.

We whole-heartedly support this retail regulatory move and are pleased to inform our students that we can keep trading just as we've traded the last 8 years.

Read more about ESMA regulatory measures HERE.