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What the New ESMA Leverage Rules Mean for European Traders

April 09
17:41 2018

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! 

REMINDER: For the rest of the month you can get the Bank Trading Course, Live Training Room, Members Forum, Daily Market Previews, and Lifetime Support at a special discount by Clicking Here.

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  1. Frankfurt13
    Frankfurt13 April 10, 08:14

    So, in GBP, it’s costs £420 to control 1 mini lot at 30:1 versus £70 to control it at 200:1 … which leads to the question; does this mean the cost of overnight financing will drop by a similar amount? (i.e. a factor of 6)?

    Reply to this comment
    • Sterling Suhr
      Sterling Suhr Author April 10, 14:55

      It’s very unlikely in my opinion. Most retail traders would never think about this and therefore I doubt any of the brokers would make an adjustment.

      Reply to this comment
  2. Grumpy trader
    Grumpy trader July 24, 06:53

    Good, maybe beginners will not waste their money within few days and will not blame all the brokers and forex market for their losses. Well, at least I hope so.

    Reply to this comment

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