The post Forex Trading in St. Vincent and the Grenadines by Chris Davis appeared first on Benzinga. Visit Benzinga to get more great content like this.
Check out FOREX.com for all your foreign exchange trading needs.
Due to its strict confidentiality and tax laws, St. Vincent and Grenadines (SVG) can seem like an ideal place to trade the forex market. The country is known around the world as a beacon of confidentiality, and this includes the largely unregulated online forex brokers that do business within its borders. The Confidential Relationships Preservation (International Finance) Act of 1996 protects the financial and personal information of brokers. There are no restrictions on trading profits and no audit or record publication requirements, making Forex trading in St. Vincent and Grenadines desirable.
Also, nonresidents who operate businesses in SVG do not have to pay taxes there. However, this lax environment facilitated fraudulent activity on behalf of a number of unscrupulous forex brokers based there in the past, so you may be better off using a well-regulated forex broker based elsewhere to trade currencies.
If you are considering a forex broker based in SVG, be aware that the Financial Services Authority of St. Vincent and the Grenadines states specifically on its website that it does not “regulate, monitor, supervise or license” forex brokers. It does, however, issue alerts and guidance on possible frauds. It’s a good idea to trade cautiously with an SVG-based broker.
Contents
- Get Started with Forex in St. Vincent and the Grenadines
- St. Vincent and the Grenadines Forex Trading Strategies
- Forex Trading Example in St. Vincent and the Grenadines
- Making Money with Forex in St. Vincent and the Grenadines
- Best Online Forex Brokers in St. Vincent and the Grenadines
- Forex Terminology
- Trade Forex from St. Vincent and the Grenadines
- Frequently Asked Questions
Get Started with Forex in St. Vincent and the Grenadines
What St. Vincent and the Grenadines lack in regulation, it makes up for in opportunity. No government regulation on trading activity means local brokers can offer high leverage in margin accounts which means you can make high-risk/high-reward trades in the forex market. You can also trade binary options from SVG. Follow the steps below to prepare yourself before you start trading forex.
- Make sure you have a solid internet connection: Check that your connection has enough bandwidth to support your trading activities, including your broker’s website, trading platform, news feeds and charts.
- Choose the right broker: The SVG government does not regulate or license forex brokers in any way, shape or form. Any broker claiming a license from St. Vincent and the Grenadines is not to be trusted and therefore likely fraudulent, so avoid that entirely. Instead, find a foreign broker regulated by 1 or more reputable financial authorities to help protect your margin deposit from fraud.
- Open a trading account: Most online brokers have a few account types with differing initial deposit requirements and trading perks provided. Choose an account type that makes the most sense for your needs and apply to open an account via the broker’s website.
- Fund your account: Once you’ve found a reputable broker, you’ll tap into a variety of ways to fund a trading account. Use a debit card, bank wire transfer or an electronic payment service like Skrill or PayPal.
- Choose a trading platform: Many forex brokers offer their proprietary trading platform or allow you to connect to a popular 3rd-party platform like MetaTrader or NinjaTrader. If you have no experience with trading platforms, most forex brokers let you open a demo account so you can evaluate their trading platform before funding a live account.
- Make your first trade: After you’ve completed these steps and done some trading in your broker’s demo account, you’re ready to make a live forex trade. Read the next section to get a sense of what sort of trading strategy you will be using to make trading decisions.
St. Vincent and the Grenadines Forex Trading Strategies
Learning to trade forex means taking a hard look at your trading personality and using a trading strategy best suited to it. Here are some of the more common trading strategy types that successful forex traders use.
Day Traders
Day traders adhere to one basic rule: Close out all trading positions before the end of the trading session or “day.” Since the forex market operates 24 hours during the trading week, day traders generally pick a particular session for their “day.” Forex trading sessions consist of the New York, London and Tokyo sessions, which generally correspond to business hours within those major money centers that professional forex traders operate from. Day traders often watch for the latest news releases that pertain to a currency pair, as well as trading based on chart patterns and short-term technical indicators that signal when to initiate and close out positions.
Swing Traders
Swing traders, also known as momentum traders, usually stay in trades from a few hours to several weeks, depending on the market, so they often take overnight positions. The swing trader aims to capture a significant move in a currency pair, whether with the prevailing trend or against it, by using momentum technical indicators that signal when a market is primed for a reversal. Swing traders’ positions can be affected by news and economic data releases, so swing traders may pay close attention to such fundamental factors that can move markets.
Position Traders
The position or trend trader patiently waits for the right opportunity to enter a market showing a directional bias and may hold a position in a currency pair for months at a time. This type of trader has a keen sense of the political and economic reasons behind a currency’s relative value and looks for long-term corrections on undervalued or overvalued currencies. The position trader may hold a position for as long as it takes for the long-term trend in the currency pair they’re trading to play out, and they often use trailing stops to protect their profits in case of a significant market reversal.
Forex Trading Example in St. Vincent and the Grenadines
Like several other Caribbean countries that are members of the Organisation of Eastern Caribbean States (OECS), St. Vincent and the Grenadines use the East Caribbean dollar (code XCD, symbol $). Still, forex traders in SVG will typically want to operate in pairs involving more actively traded currencies like the EUR, USD, JPY or GBP.
As an example, the USD/JPY bid/ask spread is 106.12/15 at your online broker, and you expect the pair’s exchange rate to rise. You place an order to buy $100,000 versus the Japanese yen at 106.15. Your online broker allows you to use a leverage ratio of 100 to 1 in that currency pair, so you can control a $100,000 position with only $1,000 deposited in your margin account.
After 10 hours, the USD/JPY exchange rate now trades at 106.30/33 and you decide to close out your position at 106.33 for 15 pips profit. That trade will net you ($100,000 x 0.15) or 15,000 JPY or $141.07. Had the market instead fallen 15 pips, you would have lost the same amount of yen.
Making Money with Forex in St. Vincent and the Grenadines
Now that you have a better sense of what type of trading strategy type fits your personality best, you can decide what tools you want to use on a day-to-day basis in the forex market. Here are some of the important strategies and alternative forex trading vehicles you should know about:
- Going short: Whenever a trader takes a net position in the forex market, they are always going short either the base currency or the counter currency, while buying the other currency. For example, if you start without a position in the USD/JPY currency pair and you want to “go short” the U.S. dollar because you think it will decline in value relative to the Japanese yen, you would sell the dollar as the base currency and buy the Japanese yen as the counter currency.
- CFDs: Contracts for difference allow a trader to take a position in a currency pair without trading in the underlying spot market. The exchange rate quoted on a currency pair CFD will generally mirror that prevailing in the spot market.
- Binary options: These exotic derivatives give the holder a chance to win a specific payout from the seller when a certain market condition is met prior to or at expiration in return for paying a fixed upfront premium. If your view was right, then you get the predetermined payout from the binary. If not, then you lose the fixed amount you put up to hold it.
Best Online Forex Brokers in St. Vincent and the Grenadines
Although forex brokers are not licensed directly through a regulator in SVG, there are plenty of online brokers based elsewhere that are willing to do business with forex traders residing in the country. Make sure you choose a well-regulated one to help protect your margin deposit from scams.
FOREX.com is a one-stop shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker.
Best For
- MetaTrader 4 users
- Beginner forex traders
- Active forex traders
- Impressive, easy-to-navigate platform
- Wide range of education and research tools
- Access to over 80 currencies to buy and sell
- Leverage available up to 50:1
- Cannot buy and sell other securities (like stocks and bonds)
IG is a comprehensive forex broker that offers full access to the currency market and support for over 80 currency pairs. The broker only offers forex trading to its U.S.-based customers, the brokerage does it spectacularly well. Novice traders will love IG’s intuitive mobile and desktop platforms, while advanced traders will revel in the platform’s selection of indicators and charting tools. Though IG could work on its customer service and fees, the broker is an asset to new forex traders and those who prefer a more streamlined interface.
Best For
- New forex traders who are still learning the ropes
- Traders who prefer a simple, clean interface
- Forex traders who trade primarily on a tablet
- Easy-to-navigate platform is easy for beginners to master
- Mobile and tablet platforms offer full functionality of the desktop version
- Margin rates are easy to understand and affordable
- Access to over 80 currency pairs
- U.S. traders can currently only trade forex
- Customer service options are lacking
- No 2-factor authentication on mobile
86% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Plus500 is a European derivatives broker focusing on contracts for difference (CFDs). CFDs are similar to binary options in the U.S. where traders take all-or-nothing speculation on the prices of certain securities like indices, commodities or currencies. While not legal to trade in the U.S., CFDs are legal in many jurisdictions across the globe and Plus500 offers a wide array of tradable markets using these instruments.
Plus500 doesn’t charge commission and only profits off the spread, which is the difference between the buy and sell price of a specific security. But Plus500 is not a broker for beginners — the education materials are sparse and CFDs are risky derivatives capable of sapping out all of an investor’s capital. Only trade these instruments if you understand how they operate and the risks involved with buying them.
Best For
- Traders looking for a smooth mobile experience
- Great mobile app
- Low spreads and commissions
- Unlimited demo account
- Only derivatives are available
- Not open to U.S. residents
Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).
eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.
Best For
- International Forex/CFD Traders
- New cryptocurrency traders looking for an easy-to-use platform
- Traders who want to buy and sell cryptocurrencies on-the-go
- Simple platform that is easy to master
- CopyTrader feature that allows new traders to copy the same strategies used by professionals
- Virtual dummy account that gives you $100,000 to practice trades
- U.S. traders currently limited to cryptocurrencies
- Only 15 major coins available to trade
HYCM is 1 of the world’s leading forex brokers, offering investors access to over 69 unique currency pairs. However, forex isn’t the only thing the broker offers — HYCM also offers high rates of leverage, stock and ETF trading, commodity investing and much more. Getting started with HYCM is quick and easy, and most investors can open an account in as little as 10 minutes.
HYCM offers a varying fee structure, which allows investors to choose the spread option that’s best for them. A wide range of educational and investing tools are available, which can be equally beneficial to both experienced and novice traders. Though HYCM isn’t currently available in the United States, it can be a great choice for residents of the other 140 countries where it offers service.
Best For
- Investors who want a customizable fee schedule
- Traders comfortable using the MetaTrader platform
- Islamic traders who need swap-free accounts that don’t build interest
- Mobile app with a simple trading experience
- Wide range of currency pairs available
- Excellent selection of educational tools
- Not currently available to traders based in the U.S.
A fully regulated broker with a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan, Avatrade deals with mainly forex and CFDs on stocks, commodities, indexes, forex, cryptocurrencies, etc. This brokerage is headquartered in Dublin, Ireland and began offering its services in 2006. It offers multiple trading platforms and earns mainly through spreads.
Best For
- Beginners
- Advanced traders
- Traders looking for a well-diversified portfolio
- Controlled by regulatory agencies of multiple countries
- Choice offered in terms of trading platforms
- Support available in 14 languages and trading platforms in 20 languages
- Practice/demo account available for trying out
- Breadth of trading assets
- Does not accept customers from the U.S. as it isn’t regulated in the U.S.
- Transferring funds to the account may take up to five days; withdrawals could take up to 10 days
Billing itself as the world’s 1st eco-friendly broker, CedarFX makes it easy to trade and give back to the planet. You can choose a 0% Commission Account or an Eco Account — or open multiple accounts to meet all your needs.
CedarFX offers access to a wide range of tradable securities, including stocks, futures, major and exotic forex pairs, cryptocurrencies and more. Though CedarFX could introduce a few additional educational resources, the broker remains a unique option for traders invested in giving back.
Best For
- Forex investors
- Investors interested in 0% commission or eco conscious trading
- Investors looking for 24/7 customer service
- Allows users to offset their carbon footprint
- 0% commission investing
- Offers demo account access
- 24/7 customer service available through live chat
- Eco Account Option (10 trees planted for each lot traded)
- Fast deposits/withdrawals with Bitcoin
- Limited number of educational resources for new investors
Forex Terminology
Learning the short list of forex terms below will help you communicate more efficiently with other forex traders and understand strategies more deeply:
- Pip: “Percentage in point,” the pip is the minimum exchange rate movement for a particular currency pair, typically 0.0001 for most currency pairs.
- Lot size: A standard trading amount. A regular forex lot at most online brokers consists of 100,000 base currency units, while a mini lot is 10,000 units and a micro lot is 1,000 base currency units.
- Orders: Instructions you give to your broker that detail the trade you wish the broker to execute in the forex market for you.
- Calls: An option contract that traders can buy giving them the right but not the obligation to purchase a certain amount of one currency against another at a particular exchange rate on or before a specific date.
Trade Forex from St. Vincent and the Grenadines
Trading forex in St. Vincent and the Grenadines seems ideal for traders who want a tax haven and an unregulated forex market to operate in. Most traders will want to choose a regulated foreign broker to operate through to help protect their margin deposit from scams.
Trading in the forex market requires discipline, knowing yourself, and above all, an easy-to-follow trading strategy. If you don’t have a trading plan or if you’ve had difficulty developing one, you can opt for a broker that offers a social trading network that lets you copy a successful trader’s trades in your own account.
Success in forex trading comes from knowing the market and how to trade it profitably. News and information can protect you from losses and help you strategize a winning plan for your forex trading career.
Frequently Asked Questions
Is it legal to trade Forex in St. Vincent and Grenadines?
Is is legal to trade Forex in St. Vincent and Grenadines.
Is it safe to trade Forex in St. Vincent and Grenadines?
There are many regulations in St. Vincent and Grenadines for trading Forex, so it is safe to trade Forex as long as you use a regulated broker.
Where can I find regulated brokers to trade Forex in St. Vincent and Grenadines?
You can find regulated Forex brokers in St. Vincent and Grenadines by consulting the list above.
The post Forex Trading in St. Vincent and the Grenadines by Chris Davis appeared first on Benzinga. Visit Benzinga to get more great content like this.
