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50:1 or 500:1? Print
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Wednesday, 21 December 2016 10:09

HomeThe FCA is at long last catching up with US regulators and proposing changes to what has become the wild west amongst questionable spread betting, CFD and Binary providers.

The main area of concern for the FCA is to save private punters from themselves and the temptions of "Get rich quick" marketing promotions that are just great at getting the brokers rich quick! Why? Because the majority of spread betting and binary punters lose money. Punters losses can result in bumper 'broker' profits as most of these providers are not brokers at all, they take the other side of your trade. 

The FCA have now proposed:

 Limit leverage to 25:1 for punters with less than 12 months experience. and 50:1 above 12 months.

Ban 'Free' cash Bonus Promotions 'enticements to trade' and publish agregate customer profit and loss.

So will this help reduce punters losses? It's a no brainer. Take a look at the collapse in share prices of IG group and CMC Markets when the FCA probe was announced. The market expects the providers super profits to fizzle away once this comes into force.

The FCA have started the consultation phase to which anyone can contribute here: https://www.fca.org.uk/cp16-40-response-form

 

 

 

From the blog

Gold Silver Ratio

Today is the Day & The Case for the Gold Silver Ratio

 

Will Christmas come early for the Donald? Will he get his demand of lower interest rates from Father Christmas Powell? Today is the day that could see a major reversal, or just the same old, same old.

A quick re-cap. The fed have made a couple of 0.25%, or 25 basis point, increases to the Fed funds interest rate this year. Signalled by the Fed, the market is fully expecting Wednesday the 19th December will bring the rate to 2.5%.

But. At his last announcement Fed chair Jerome Powell talked about rates which were just below the Neutral rate. Markets seem to have taken this to mean that today's rate increase, if it happens, will bring it to neutral, so no more rate increase will be signalled into 2019. Add in the Donald's insistence that any rate hike now is insane, we wait to see if it actually happens.

Either way, US dollar traders are in for some excitement and that just might include the precious metals and stock markets.

The case for Gold

This time last year all eyes were on BitCoin and the other 1400 or so Crypto's. These were the new Gold the hype merchants told us. Yes, the similarities were there all right. Gold has rocketed higher several times in a buyers frenzy to get in on the act. What makes it move?

Read more...

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