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Kudos to anyone who correctly identifies that reference. But seriously, in light of the proposed changes in forex regulation that have generated a heated response on this blog and elsewhere, I want to offer some insight into a tangential issue: jurisdiction.

Part of the problem with existing forex regulation is not that it’s insufficiently strict, but rather that it’s essentially optional. That’s because retail forex brokerages do not technically need to be registered in order to operate. Moreover, if they do register, they can choose between several organizations, depending on whose regulations most jive with their business models.

The Commodity Futures Trading Commission (CFTC) is probably the most prominent regulatory organization in retail forex, and of which most retail brokers are registered. [It is also the organization that has proposed the rule changes that everyone in forex is currently talking about]. It was only in 2008 that the CFTC was vested with the power to regulate retail forex, but contrary to popular, only its members (rather than all forex brokers) are subject to the sword of its regulation.

The Financial Industry Regulatory Authority (FINRA), the self-regulatory body for securities brokers,meanwhile, is trying to reach its regulatory powers into the arena of retail forex. In coordination with the SEC, it has proposed enhanced regulation for its own member brokers. Under this proposal, the handful of retail forex brokers that are registered with the SEC would be subject to stricter regulation than their counterparts under the control of the CFTC. Brokers registered only with the CFTC, then, would probably enjoy a competitive advantage (specifically the right to offer 10:1 leverage, instead of 4:1, as proposed by the SEC).

Then, there is the National Futures Association (NFA), which operates in association with the CFTC. Not to mention the exchanges, themselves, which impose their own set of rules on brokers. Make no mistake; all of these organizations are fairly vigilant in pursuing violations and in revoking membership for those brokers that really run afoul. The problem is that such does not nothing to stop a broker from simply registering with another regulatory agency instead, and/or not taking advantage of client apathy/laziness by either not registering at all, or even worse, lying about the registration.

In the end, most forex traders probably don’t care which regulatory organization ultimately wins the turf battle over the right to regulate retail forex. Ideally, though only one such organization would have such power, and all brokers would be subject. Given that this issue isn’t likely to be resolved anytime soon, for now, you would be wise to choose a broker that is registered with the CFTC. You can confirm a broker’s membership here.

Terminal window in MetaTrader 4 is the main status window of the terminal. It can list the currently open orders and positions, account history with the closed positions and the related details, the news supplied by your Forex brokers, trade alerts issued by the indicators and expert advisors, the messages from your broker, the error log for the expert advisors and the journal of events for the whole platform. To get more details — please, watch this free Forex video tutorial on terminal window of MetaTrader 4.

Posted on Forex Video Zone.

Today we bring you an interview with hedge fund manager Howard Lindzon, author of The WallSTRiP Edge and co-founder/CEO of StockTwits. Below, Howard discusses his interest in currency trading, as well as his general approach to investing.

Forex Blog: As a forex blogger, I am eager to hear how and why you developed a sudden interest in forex.

It is not a sudden interest in forex.  For years, I had money with trend following managers and slowly saw the way people traded currencies.  My new fascination comes from all the people on stocktwits talking currencies at odd hours

Forex Blog: Does your primary interest lie in currencies, themselves, or rather in the people that trade them? In other words, is it your intention to invest directly in currencies or instead to identify companies that successfully market services to currency traders? Perhaps a combination of both?

I own the Canadian Dollar right now and also gold so my fascination is in the way different things move different markets.  Currencies move from macro policies and they seem to trend better.  For me, It’s now a combination of both.  I am learning to get a feel for currencies as I hear individuals on stocktwits actually talk about them.

Forex Blog: While it’s true that forex remains off the radar screen of many retail investors, I must point out that it’s already by the far the largest market in the world, with an estimated $4 Trillion in daily turnover. In spite of this, it seems you’re still quite optimistic about its prospects for growth?

I am optimistic because of many trends.  The online brokers are way behind and must catch up.  The forex brokers are way behind and see the retail consumer as a growth market and there seems to be chaos so it should be interesting which new winners emerge.

The world has indeed flattened and shrunk and currencies should be a more exciting topic as governments collide more often.

Forex Blog: Are there specific currencies that you are interested in, and/or that you believe are currently undervalued?

It is really exciting to watch the action in the dollar.  I try to see the big picture.  We are printing money and our policies are not changing.  it seems the us government wants a cheaper dollar which would be fine, but they are also manufacturing it, so I don;t think it will work out well for it.  I just don’t have a timeframe.

Forex Blog: As some of your readers pointed out, the forex market is currently saturated with fraud. New regulation is expected to clamp down on unethical business practices, but could also lower the appeal of forex by cutting leverage from 200:1 to levels associated with trading stocks retail. How will changes in regulation factor into your investment approach?

The regulation on our little community comes from the community itself.  If I am learning, I think I can get others excited about learning…if not to trade, than to see how the currencies and government policies affect stock prices and other markets.  I try not to worry about regulation…my size also keeps me out of the stress of it as I am too small.

Forex Blog: Shifting gears a bit, why did you decide to found/back StockTwits, a self-described “community-powered idea and information service for investments?”

I founded stocktwits to help me better track my ideas from a trusted source of friends.  It’s about getting the info i want, when I want it, on any device, from the group I want it from.  All that has happened is that thousands of others want info the same way. With the new filters and discovery features of twitter and now stocktwits, the speed to knowledge is faster than ever and its fun.

Forex Blog: How would summarize the growing appeal of StockTwits to its users? In other words, how does StockTwits (intend to) distinguish itself from the hundreds of other popular forums and message boards dedicated to the art of investing?

Community is the real differentiator.  Every community is different.  Ours just has some pretty cool features in it and i love the context our ticker has and the breadth of knowledge.  I also believe in the ‘farm system’ of distributed talent and having an expert pop up out of nowhere and get rushed to the top.  It’s like…oh my god…we need a doctor…BOOM, thousands of people are asking around for a doctor and then you get one right away.  It’s social leverage at work.

Forex Blog: If StockTwits expanded to the point where user comments/activity influenced asset prices (as happens occasionally with RagingBull and Jim Cramer’s Mad Money), would you view this is as a positive or negative development?

If we move markets, that’s good;  it’s an evolution.  I doubt we will and if we do, I am hopeful it is for the right reasons and we will do everything within our power to nudge the community in the win/win, do the right thing way.  We are going to be wrong all the time too so moving the market is not something people should be worried about.

Forex Blog: Finally, what advice to you have for investors that want to beat the market (any market, really) during the credit crisis?

I have never routinely beat the market.  I invest heavily and with a long term time frame when I feel I have an edge.  I want to beat the market not daily, weekly or yearly, but over decades.  You need to pick the asset classes that jibe with your passion, thinking, energy, risk levels, liquidity needs and then passionately chase the returns.

Since Tuesday I’ve been running forward testing with the lastest Gomega GBPJPY Autotrader. I setup a demo account at Forex brokers FXDD starting with a balance of $5000. using the exact settings as it was preset with by Quantum Research. Gomega GBPJPY only trades during the second part of the Asian market session and first part of the London session. So far it has opened 2 positions, both were orders to buy. As trades progress, Gomega GBPJPY intelligently modifies the trailing stop.

The Gomega GBP JPY trades on the four hour chart and only open new trades within an eight hour period each day. This begins with the second half of the Asian session through to the first half of the session in London. This may seem to be very restrictive but it has proven to be the most profitable time frame and period for Autotrader to trade the GBP JPY.

The results so far: With the initial trade, Gomega GBPJPY adjusted the trailing stop as the market rose but when the market retraced, it exited the trade for an end result of zero gain and nothing lost.

The next trade followed a similar pattern, however the market moved higher before retracing. Once again the trailing stop was triggered and Gomega GBPJPY exited with a small profit.
Click Here for my Gomega GBP JPY Review and Back Tests, Forward Tests and Live Results

Gomega Pound Yen has been designed to follow a strategy of consistent, steady gains, for the long term. The initial forward tests are very good and indicative of what we can expect from trading with Gomega GBPJPY. Tomorrow I’ll be running some back tests as well, to get a clearer picture how well Gomega GBPJPY performs. Quantum have already published live trading results from their clients who have been trading Gomega Autotrader for the last 8 months. So we already know that Gomega GBPJPY is very profitable on the Pound Yen pair.

Quantum research are so confident with the profitability of Gomega GBPJPY, they are including a full one year profit guarantee for their clients. “At minimum, you will at least double your account size within a year or your money back”. That is an impressive guarantee and just shows how extremely confident Quantum Research are with their automated trading system. You can see the full details of the guarantee on their sales page when Gomega GBPJPY opens for sales next Monday at midnight. In the mean time, they summarize it in their blog and in their most recent video titled “The Offer Guarantee & More“.

The only problem I can see with Gomega GBPJPY is that there is only a 3 day window in which to purchase this software. I’m sure many people will learn of Gomega GBPJPY after the sales period closes. However this is always the case with the Gomega automated trading software. So if you do miss out on this launch, then I highly recommend you join my mailing list, to be sure you don’t miss out next time. You can find more information about the GOmega GBP JPY AutoTrader here GoMEGA GBPJPY Review.

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