One of the biggest changes to forex trading in the Eurozone just took place. What is that change? Simply put, the ESMA (European Securities & Markets Authority) passed a new regulation that would limit the leverage any European forex broker would be allowed to offer their clients. The new regulation, if implemented, would bring the max leverage down to 30:1 for major and 20:1 for minor pairs.
One email I got said something to the effect of ‘Sterling, is this the end of forex trading for us in the Eurozone.’ After I had a good laugh, I realized there were probably a lot of questions on how the new leverage rules will affect you in the real world. This training video walks through how to calculate the leverage required to hold a certain position, once the new regulations go live. The illustration in this videos shows how you can still achieve the proper leverage with the new regulations very easily. In fact, even with this major reduction in leverage, you will still be able to over-leverage!
P.S – If you have a small account and you’re discouraged by the new regulations then I would highly recommend checking out a video I posted a few weeks back titled 4 Pivotal Rules to Trading Success.
This video walks through the 4 most important aspects to profitable trading as well as how quickly an account can be compounded. If you haven’t seen it, check it out after going through this video as the two go together nicely!
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