Suggestion,

[cecja]

I have been trading for living for the last two years, but now that I have increased my deal size I’m really concerned for the way that all CFD and Forex providers held our money.
To be honest it seems like a pyramid scheme, they can do anything with our funds, can even go bust and no one will take care of our funds.

So my suggestion is, Please can all of us find a way to write a petition to the FSA so they can change the rules, so they can make sure everyone who trades CFD’s and Forex is protected,



Please see follow a part of the terms and conditions that every one of us has signed in order to open an cfd or forex account.

……….. will hold the money in your account on a non-segregated basis and accordingly:


1. Money held by …….. on your behalf will not be subject to the protections conferred by the FSA’s Client Money Rules.

2. Your money will not be segregated from …….money and will be used by …….. in the course of its business, and in the event of …….. insolvency you will rank as a general creditor of ……….

 

[dr_d_michaelson]

You're absolutely right, of course, Cecja: the forex "industry", in particular, is almost unregulated in any real, practical ways that would adequately protect those of us trading for a living. Many traders are a little naive on this subject. Until they read some of the horror stories at various internet forums and realise what can actually happen to them. And some read those and on some level perhaps manage to think "those are other people, not me" and remain naive about the situation.

IMHO petitioning the FSA is no solution. They have neither the power nor the ability (nor even the staff) to do anything about it. It's the government who must be petitioned.

The solution is already at hand for those of us UK-residents trading for a living, in that we can use spread-betting firms which really are securely and extremely actively regulated by the FSA.

This is where I always so strongly disagree with other professional forex spread-betters here who always say that the tax efficiency is the reason for so many successful traders to be switching from retail forex bucketshops to spread-betting. IMHO it's the security of deposits and regulation procedures that provide the biggest incentive. People who understand how the industry really works appreciate this.

I appreciate that you live in Belgium and that therefore there would be no tax efficiency for you in using a London spread-betting company for all your forex trading, Cecja, but IMHO you would be very well advised to think about it just for the safety, security of deposits and regulation. You would have no difficulty opening an account at all (only US-resident citizens have a problem, and that is their government's fault).

Depending on which currencies you are trading and what your order size is, you would have to be willing/able to live with (mostly) 3-pip and 4-pip spreads, though; and this may not suit everyone, for sure.