Why Cfd brokers are banned in USA

Part of the reason that CFDs are illegal in the U.S. is that they are an over-the-counter (OTC) product, which means that they don't pass through regulated exchanges. Using leverage also allows for the possibility of larger losses and is a concern for regulators.
You're just betting on price fluctuations on that financial instruments and not a real asset.
Like when you buy EURUSD currency pair, you're not literally buying Eur and selling USD , but you're just speculating that there will be Bullish.
Brokers is being given a real price from several sources like large banks and central banks of various countries. You're really betting or speculating on real price of that instrument.
So if you can do analysis and know your factors that can lead to decline of certain financial asset like index, future you gain a profit if that analysis go the same direction as how you speculated.


In USA need brokers who pass the orders of his clients to real liquidity providers direct.
Is like when you buy Jpy to sell your TZS in order to a car from Japan.
Here you really selling your Tanzanian shillings and buying Japanese yen.

keisangora said:

larger losses and is a concern for regulators

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... and this is the big concern broker

Imagine trader is given a leverage of 1:2000 to Unlimited



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Yaani unapewa leverage kubwa ili ukaange account yako mapema

Mwl.RCT said:

... and this is the big concern broker

Imagine trader is given a leverage of 1:2000 to Unlimited

View attachment 1932068

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Yaani unapewa leverage kubwa ili ukaange account yako mapema

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Ila ukipiga unapiga kweli😂😂. Trading financial assets kuna risks kubwa.

Elivate said:

Ila ukipiga unapiga kweli

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Yap.

Haitakiwi kubahatisha.

Unachotakiwa kutafiti ni Currency Pair ipi:-

• ina_Trand zaidi na sio ina Range
• Ina Higher Trading volume hasa wakati wa London/New York session
• Ina low volatility

Then Fanya Top Down Analysis; Pin point entry kwenye m5, Waweza kuza $100 na ikawa $500 ndani ya siku chache.

Elivate said:

Trading financial assets kuna risks kubwa.

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Haitakiwi fedha ya mawazo uweke kwenye fx

Mwl.RCT said:

Yap.

Haitakiwi kubahatisha.

Unachotakiwa kutafiti ni Currency Pair ipi:-

• ina_Trand zaidi na sio ina Range
• Ina Higher Trading volume hasa wakati wa London/New York session
• Ina low volatility

Then Fanya Top Down Analysis; Pin point entry kwenye m5, Waweza kuza $100 na ikawa $500 ndani ya siku chache.

Click to expand...

True, sema kupata consistency ndo ishu kubwa. Watu wanataka kupiga ROI ya asilimia 200 kwny soko wakati hedge funds na investment cmpnys zina ahidi 20% ROI kwa mwaka au mwezi na ndo wanaingia na mitaji tembo kwny kutrade financial instruments ila sisi ma trader wadogo tunataka matokeo tembo kwa mtaji wa kidebe.

Elivate said:

ROI ya asilimia 200 kwny soko wakati hedge funds

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Hii inawezekana kwa XAU, GER30, US30 iwapo utafanya scalping

Kikubwa ni Entry Timming, Kosa kidogo umekaanga account

Mwl.RCT said:

Hii inawezekana kwa XAU, GER30, US30 iwapo utafanya scalping

Kikubwa ni Entry Timming, Kosa kidogo umekaanga account

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bila kumsahau bwana mdogo ZAR na wakina V75

Mwl.RCT said:

... and this is the big concern broker

Imagine trader is given a leverage of 1:2000 to Unlimited

View attachment 1932068

--
Yaani unapewa leverage kubwa ili ukaange account yako mapema

Click to expand...

Afu Sasa jinsi unavyokuwa na pesa ndefu Sana na unawala wanakupunguzia leverage.
Sema huku belowa $1k wanajua in long run utaipoteza tu hata iweje.
Mana human demons hazitokuacha salama like greed,ego and fear are in-built in our DNA.

Mwl.RCT said:

Yap.

Haitakiwi kubahatisha.

Unachotakiwa kutafiti ni Currency Pair ipi:-

• ina_Trand zaidi na sio ina Range
• Ina Higher Trading volume hasa wakati wa London/New York session
• Ina low volatility

Then Fanya Top Down Analysis; Pin point entry kwenye m5, Waweza kuza $100 na ikawa $500 ndani ya siku chache.

View attachment 1932167

Haitakiwi fedha ya mawazo uweke kwenye fx

Click to expand...

Hope emotions imemtawala tayari. To escape human emotions you need to be abnormal person

Mwl.RCT said:

... and this is the big concern broker

Imagine trader is given a leverage of 1:2000 to Unlimited

View attachment 1932068

--
Yaani unapewa leverage kubwa ili ukaange account yako mapema

Click to expand...

Na Nina Imani ukiwa unawala Sana watakukataa Kama Jesse Livermore alivyokataliwaga na Bucket shops nchini kwao Uk ikabidi azame USA New York ili atredi real legitimate market

CFDs are contracts under which you don't really own anything, unlike other financial instruments. They allow you to bet on movements of stocks, currencies or commodities, but you never own the underlying asset. It's much like a bucket shop in old times. They allow high leverage and are pretty much unregulated, which is probably why US banned them.

Na ndo Mana all regulated brokers wanatoa leverage not high than 1:30 so akili kumkichwa. Ingawa anaweza akaruhusiwa na nchi zingine ambazo hazina Sheria Kali Sana kwa hizi Mambo akakupa hata 1;1000 leverage

I am not an expert in this area but I believe that in general speculation has to be limited and these instruments are not part of any financial market in the US. In other words Wall Street brokers can not become involved at all. What i am trying to express is that speculation can get way out of human understanding or control. For example suppose you set up a ghost stock that appears to be identical to a known stock. when the real stock goes up your ghost goes up or down exactly like the real stock. Now further imagine that you decide to act like a mutual fund and have four of these ghost stocks such that the combined gains or losses pay out just as they would in the real companies. It all seems harmless enough but who will oversee and regulate such a strange instrument. Further the real companies may suffer as they have to have the real world offices, machines, employees and over head to pay for whereas the ghost stock has almost zero expenses. One could even offer shares of the ghost company. This all can suck money out of the market that the real businesses need to function. When you get a pile of these strange instruments it is way to easy to have a collapse that threatens the very existence of a nation.. You could easily set up a computer as if were a real ghost stock company and feed it the data from the companies that you pick and see at the end of one year just how you would have made out. Chances are you will suffer a loss as real mutual companies and others have huge experience and skills at picking stocks to invest in.

Leveraged CFD trading has detractors arguing that over the counter trading is detrimental to retail traders vs on exchange trading.

There have been murky CFD companies mainly in offshore jurisdictions offering ridiculous leverage that have contributed to the negative perception of CFDs as an alternative trading vehicle to on exchange venues.

Retail clients that trade either CFDs or futures contracts have a 70%+ chance of losing money. To put it in context 80% of new businesses also fail in their first few years. Surprise, surprise only skilled traders make consistent profits in this field.

Interestingly, competition and improved customer knowledge has made quality CFD companies more competitive in comparison to on exchange trading with many instruments. This is especially true with continuous contract FX and index CFD pricing. CFDs have the added advantage of smaller and flexible trade sizing allowing traders to better manage their risk per trade.

Examples with On Exchange vs TradeDirect365 CFD continuous contracts

EUR/USD 1.0 minimum spread + $2 commission vs 0.7 fixed spread +$0 commission

SPI Futures 1pt spread + $5 to $10+ commission vs 0.9 fixed spread + $0 commission

Dax futures 0.5 - 1.0 pt spread + €3 commission vs 0.8 fixed spread + $0 commission

S&P 500 0.25pt spread + $2 commission vs 0.3 fixed spread +$0 commission

Maybe the CME is a strong political influence and doesn’t want competition to their futures products.

It depends. Just think of it this way. If you’re buying CFDs of let’s say Microsoft with no leverage or investing directly in Microsoft stock what is the difference? Now let’s say you this yes with a 2X leverage… Yes technically if the Microsoft stock goes down 50%, you would lose all your money, but what are the chances of that? What I’m saying is, if CFD trading is done with low leverage in instruments with low volatility, the earnings can actually be interesting. But the problem is when people loose their head. The problem is when people start using the high leverage in high volatility instruments. Then YES, it can become gambling.

keisangora said:

Afu Sasa jinsi unavyokuwa na pesa ndefu Sana na unawala wanakupunguzia leverage.
Sema huku belowa $1k wanajua in long run utaipoteza tu hata iweje.
Mana human demons hazitokuacha salama like greed,ego and fear are in-built in our DNA.

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kalibia naanaza kumtapisha hela zangu zote nilizomkopa broker

watu wako kmya, vipi mmekata tamaaa???

msikate tamaaa , miezi imekaribia ya kuoneshanaa, mihamalaa ya pesa