i was in dc this morning and overheard something in a meeting that the dodd-frank is being repealed.

sorry, i dont know the answer to this question, but i will tell you how i think things should work...

first, i should admit that i do not understand very well the inner workings of how a currency broker offsets my trades onto the market, so i might not be technically accurate about a thing or two, but anyways....

i think it would super cool if there were NO MARGIN REQUIREMENT AT ALL..

for example, lets say that there were no margin requirement at all... and i have a $5,000.00(five thousand dollars) account.... and i just happened to execute a monster trade, perhaps one hundred lots on my metatrader platform...

how much would my profit be on 100.00 lots?

lets see...

0.01 lots of eurusd gives ten cents of profit per pip.. 0.10 of eurusd gives one dollar per pip of profit... 1.00 of eurusd gives ten dollars of profit per pip of profit. 10.00 lots of eurusd gives $100.00 profit per pip..

and finally, 100.00 lots of eurusd gives $1,000.00 profit per pip...

so, if i drawdown only five pips(including my spread), my five grand account would be wiped out and would contain nothing...

i understand that there would be an extreme danger of the eurusd chart spiking and leaving my account in the negative, but anyways, i just thought that i would open up this can of worms...

happy trading.

/r/Forex Thread Parent