Why did NFA approve amendments to increase margin requirements?
NFA is concerned that higher leverage amounts can deplete a customers account balance and result in forced liquidation much faster than retail customers realize. FXCM agrees in principle with the NFAs intention for changing margin requirements. We have seen that clients who trade with more conservative leverage tend be more successful over an extended time period. When an account uses a high degree of leverage, a few losing trades can offset many winning trades. The new margin requirements are intended to protect forex traders from using excessive leverage.
