How to Start Forex Trading in Bangladesh 2024

Forex is a wildly popular trading method across the globe for anyone aiming to grow their financial investments. Although forex is still illegal in Bangladesh, a plethora of traders are engaging in forex trading with global brokers, utilising international payment systems.

This guide will explain what steps you have to follow to begin forex trading in Bangladesh in [ yyyy]. Do not worry, we will help you to get started off the right way, from understanding the basics to picking the proper broker.

Our Recommended Forex Brokers in Bangladesh 2024

What is Forex?

Forex or foreign exchange (FX) is the trading of one currency for another. With more than $7.5 trillion of transactions processed every single day, it is the largest financial market on the planet. Regarding the foreign exchange, forex market is open 24 hours a day, five days a week. This enables traders to buy and sell at almost any given time that suits them.

The forex market is decentralized, meaning there is no central exchange like a stock market. Instead, it operates through a network of banks, brokers, and financial institutions. For currencies, they are always listed in pairs: i.e. EUR/USD —meaning Euros and US Dollar; GBP/JPY —British Pound and Japanese Yen. When you trade forex, you speculate on the value of one currency relative to another.

That means if you buy the EUR/USD you believe the Euro will go strong against the US Dollar. You can then sell it for a profit if the Euro does appreciate. Conversely, if the value drops, you could lose money.

Forex, or foreign exchange, is an open market where both novice and seasoned investors trade currencies. This extremely liquid market allows you to buy or sell currencies at any time with little impact on the price. Entering and exiting trades is simpler with this.

However, it is important to note that forex trading carries risks. Currency values can change rapidly due to global events, economic news, and political decisions. Understanding these factors is crucial to making informed trading decisions.

In short, forex is a fast paced, easily entered market where profits can be made simply by anticipating where the currencies move directionally. However, before you get started, you must learn the basics and some strategies and know the risks.

Is Forex Trading Legal in Bangladesh?

Forex Trading in Bangladesh is a bit in the gray area of the law, it's steered by the Foreign Exchange Regulation Act 1947 and managed under the Bangladesh bank (BB). The central bank has very strict policies on local foreign exchange transactions; however, the existing law does not sufficiently go into detail enough into online Forex trading, resulting in uncertainty about whether it is permissible in Bangladesh. With the information provided, here is the data-driven breakdown:

Legal Framework for Forex Trading in Bangladesh

• Authority of Bangladesh Bank

Transactions in foreign exchange is under one authority, which is the Bangladesh Bank. This is so that all Forex's activities are under its guidance in order to avoid economic instability and violations of the national law.

• Who Can Legally Participate in foreign exchange transactions?

Foreign exchange transactions can only be operated by the banks of Bangladesh and their authorized money exchangers.

Brokers which may be licensed under the Foreign Exchange Regulation Act of 1947 can sell Forex-related merchandise. Nevertheless, the country has not developed specific regulations or guidance with regard to issuing a license to the retail Forex trading platforms.

• Restrictions for General Public and Overseas Bangladeshis

The legislation explicitly states that:

General people residing in Bangladesh cannot engage in foreign exchange transactions without proper authorization.

Similarly, Bangladeshis living abroad are also prohibited from directly participating in Forex trading activities.

The Current State of Online Forex Trading

Despite restrictions, a number of Bangladeshi traders conduct Forex trading online with overseas brokers that allow customers from Bangladesh. This is because:

• Accessibility to Global Brokers: Bangladesh Bank does not govern the international Forex platforms, providing Bangladeshi traders an opportunity to participate by depositing and trading into their accounts through online payment gateways, cryptocurrency exchange or other means.
• No crackdown: Although trading forex online may not be legitimate according to local regulations, little punitive action has been taken against the individuals. Such has driven even more traders to engage in these practices.

Lets dive into the main point: Is Forex trading legal in Bangladesh?

According to regulations cited under the Foreign Exchange Regulation Act, strictly speaking there is no legal basis for individuals to engage in any online Forex trading in Bangladesh. Apart from the commercial aspect — where only banks, authorized money exchangers, and licensed entities can carry out Forex transactions. FX trading for individuals through international brokers lies outside the legal framework.

But the enforcement of these laws has not been strong, and so people still trade on international platforms without fear of getting into trouble.

Implications of Engaging in Online Forex Trading

Currently, there is little to no enforcement, but trading Forex through unauthorized channels can lead to penalties when authorities take action.

There is no way to get money back with international brokers since they fall outside of the Bangladesh Bank.

Forex trading profits are frequently undeclared, which exposes the trader to tax evasion problems.

Bangladesh prohibits Forex trading but it is not applicable for individual traders. The current regulatory framework is designed for traditional financial institutions, which leaves online Forex trading in a legal vacuum. International Forex brokers offer access but come with regulatory risk and traders will not be protected under Bangladeshi law. A structured reform to usher adherence via the policies of Bangladesh Bank would be imperative considering the increase access of such networks in online based forex derived trades for a risk reducing and compliance able experience.

How to Start Forex Trading in Bangladesh?

Individuals are not legally entitled to trade Forex in Bangladesh. Only licensed banks and financial institutions are allowed to conduct forex trading operations. But still, a good number of Bangladeshi traders trade forex online with various international forex trading brokers who accept clients from Bangladesh. Thus, we shall now take you through a step-by-step process to start forex trading in Bangladesh.

Step 1: Learn Before You Trade Forex

Forex trading is much more than stepping in the Forex market and buying/selling a currency. The first but most important step if you are new to forex trading is learning how to trade forex. This makes sure that you have the knowledge and skills to trade confidently so that your risks are minimal.

The following are the main concepts of focus —

Understanding Currency Pairs

Forex Trading entails exchanging one currency for another. They are known as currency pairs. For example:

Major Pairs: These contain the US dollar and are the most common (e.g. EUR/USD (Euro/US Dollar)).

Minor Pairs: These exclude the US dollar, but are not minor currencies either and involve two major (but non-USD) currencies — for example, GBP/JPY (the British Pound to the Japanese Yen).

Getting to know these pairs will give you an idea of how one currency correlates with another. Not all currency pairs behave the same and due to this fact it is necessary to study their tendencies as they each have their own personality that develops from economic factors.

Leverage and Margin

Leverage gives you the possibility of controlling a relatively big position in the market with just a fraction of money. For instance, with 1:100 leverage, you can trade $10,000 only by having $100.

Leverage magnifies your profits but also makes you lose more. Which is why you should know how it works first before using in your trades. Also find out about margin, which is the cash you need to have in your account when opening a trade.

Risk Management

Risk management is extremely important in forex trading. Here’s how to do it:

Stop-loss orders: Assign a stop-loss to your trades that automatically closes when the market goes against you. This serves to mitigate any potential losses. But it's important to know how and where to put your stop loss.

Read More: Stop Loss Order Explained

Position Sizing: Always risk only a small fraction of your overall trading capital on any one trade.

Emotion Discipline: Do not make decisions based on your emotions. Stick to your plan.

Mastering the Basics of Forex Analysis

To succeed in forex trading, understanding these three key areas is essential:

Technical Analysis:

Learn to read charts (candlesticks, line charts, etc.).

Understand key indicators (moving averages, RSI, MACD).

Identify trends, support, and resistance levels.

Fundamental Analysis:

Study how economic news affects currencies.

Follow interest rates, GDP, and employment data.

Track geopolitical events and their impact.

Risk Management:

Always use stop-loss orders.

Avoid over-leveraging.

Stick to a risk-reward ratio (e.g., 1:3).

Market Sentiment:

Analyze traders' emotions through indicators like the Fear & Greed Index.

Observe market volume and volatility.

Trading Psychology:

Stay disciplined.

Avoid emotional trading decisions.

Mastering these basics will build a strong foundation for forex trading.

How to Learn

Online Resources: Websites like Babypips.com offer free lessons for beginners.

Books: Start with beginner-friendly books like Currency Trading for Dummies.

Webinars: Many brokers offer free webinars and tutorials.

Practice: Open a demo account to test your knowledge without risking real money.

Grasping these basics will give you a solid start that leads on your way to forex trading journey. Always be aware that knowledge is the secret to trading in all conditions profitably.

Step 2: Select a Trustworthy Broker

After knowing the basics of forex trading, it is time to choose a Forex broker you can trust. One of the most influential factors in which you will trade is the broker that you choose. A reliable broker offer a safe, easy to use platform for the trader to visit the forex market and provides fair trading.

When deciding on a broker, here are the things to keep in mind:

Regulation and Safety

A regulated broker ensures your funds are secure and your trades are executed fairly. Traders also get protected by strict rules imposed on some platforms by regulatory authorities. Always verify whether the broker is regulated by a reputable organization, for example;

• ASIC (Australia)
• CySEC (Cyprus)
• FCA (UK)

Many of the brokers like Exness, IC Markets and FP Markets work with Bangladeshi traders. For instance, AtoZ Markets has an awesome promotion: Open an account with FP Markets via their affiliate link and when you deposit the account (minimum $200) you will get 1 year of Premium trading signals for FREE.

Low Trading Fees

Pay attention to their Trading costs as this can quickly eat into your profits so find a broker with competitive costs. Focus on:

Spreads: The difference between the buying and selling price of a currency pair. Lower spreads mean lower costs.

Commissions: Some brokers charge a fixed fee per trade, while others are commission-free.

Swap Rates: Fees charged for holding a position overnight.

You should compare fees with multiple brokers and select the one that matches your trading style and budget.

Demo Accounts for Practice

Demo account provides you with simulated trading experience, where no real money is involved. This is a valuable tool for:

• Test out the broker platform.
• Bringing your trading plans to practice
• Get your confidence up and ready before live trading.

Confirm that your broker provides a demo account. This is a core feature for new users.

Easy Ways to Deposit and Withdraw

A broker must provide safe and easy payment methods for deposits and withdrawals. In countries like Bangladesh, bKash, Nagad and local bank transfer methods are quite handy. Before signing up, check:

• The time to process any deposits and withdrawals
• Any associated fees.
• Charges related to currency conversion, if any.

The choice of your broker is an essential step in your Forex adventure. Feel free to take your time in researching and comparing options. A good broker not only gives you a secure platform but he also helps you with tools and resources that can help you to become successful.

Step 3: Open Your Trading Account

Once you’ve chosen a reliable broker, the next step is to set up your trading account. It's a simple process usually done online. Here’s how to do it:

Register with Your Broker

Visit your broker’s website and locate the registration page. Provide the necessary details including your name, email address and phone number. Make sure to:

• Ensure the correct information is filled in to not face problems during validation.
• Pick a good password to protect your account

Verify Your Identity

Brokers are required by law to verify your identity. This process, called Know Your Customer (KYC), provides a secure market for trading.

• You need to upload a copy of passport, national ID card or driver’s license.
• Show proof of address like you will need with a utility bill or bank statement

This process typically requires a few hours or up to a couple of days, based on the broker.

Fund Your Account

After your account is verified, the next step is to deposit funds. Select a payment option that is easy for you. Some of the popular ones are: Bangladesh

• bKash
• Nagad
• Neteller/Skrill
• Cryptocurrencies
• Local bank transfers

So be sure to check the payment method you wish to use for a minimum deposit and any fees before making your deposit. Begin with a small amount to get used to the live trading.

Step 4: Practice in Demo Account

It is always wise to first use a demo account before risking your own money. It gives you the ability to trade under actual market conditions, but without risking any real capital.

Benefits of a Demo Account

Trade Different Strategy: Try out various strategies to find your optimum reward.

Understand the Platform: It allows you to have an understanding of the trading tools along with characteristics from broker.

Gain confidence: Trade without the implication of a potential loss in money. Demo accounts which is offered by most broker with virtual funds. This is a great opportunity to practice and get ready for live trading.

Step 5: Create a Trading Plan

Trading plan is the roadmap of your trading surroundings. It gives you discipline and prevents you from making rash decisions. Here is what to consider adding to your plan:

Set Clear Goals

Trade with a Purpose: Define Your Purpose as a Trader Your goals can be:

Immediate: Hitting a certain number monthly

Long-Term: Crafting a portfolio or pursuing freedom.

Determine Your Risk Tolerance

Determine how much you want at risk each trade One popular guideline is to risk no more than 1-2% of your total trading account on any individual trade.

Choose Your Strategy

Your trading style should align with your goals and available time. Common strategies include:

• Scalping: Making quick trades to capture small profits.
• Day Trading: Opening and closing trades within the same day.
• Swing Trading: Holding trades for several days to capitalize on market trends.

Write down your plan and stick to it. A well-defined strategy can save you from emotional trading mistakes.

Step 6: Start Trading Live

Once you have some confidence on a demo account, and built a basic trading plan, it is time for entering the live account stage.

Start Small

Start out with a modest investment to limit risk. Use this phase to:

• Get used to actual market conditions.
• Be aware how emotions such as fear and greed can influence your decision making

Gradually Increase Your Investment

With continued experience and confidence, you can grow your trading capital. As always, follow your plan and never forget risk management.

Setting up your account, demo practicing and moving to live trading are the three key steps of forex trading. So pace yourself through each step — be ready for it! At the end, it is a skill that you can only improve through practice and discipline, so be patient and keep practicing.

Where to trade FX in Bangladesh

Forex trading in Bangladesh is gaining popularity among investors seeking opportunities in the global financial markets. While Forex trading is not formally regulated in Bangladesh, residents can legally trade through internationally licensed brokers. To trade Forex in Bangladesh, here are the main options and steps to get started:

FP Markets

FP Markets is one of the best Forex brokers in Bangladesh. It offers reliability, transparency, and a wide range of trading options. Founded in 2005, FP Markets is regulated by the Financial Services Authority (FSA) of Seychelles, which helps to secure further legal trading grounds for Bangladeshi traders. Not overly hot within the local market, but offers a solid global reputation.

Competitive pricing, with a minimum spreads of 0.0 pips on Raw accounts and just $100 AUD or equivalent minimum deposit needed from traders. FP Markets offers multiple trading platforms, including MetaTrader 4 (MT4), MetaTrader 5 (MT5), WebTrader, cTrader, and mobile apps. These platforms are designed for all types of traders and equip users with a range of tools suitable for automated trading, market analysis, or strategy development.

One of the most attractive and exciting promotions for Bangladeshi traders is a full year free access to Premium AtoZ Markets trading signals. To qualify, traders need to:

• Step 1: Sign up with FP Markets with the affiliate link.
• Step 2: Deposit at least a $200 USD
• Step 3: Trade with this account.

FP Markets is one of the best Brokers for Bangladesh traders offering competitive prices, flexible platforms and additional benefits such as premium signals.

Thinking about trading with FP Markets? Tap the link below to begin your journey:

eToro

eToro was founded back in 2007 and has a global network of subsidiaries that are regulated. This includes CySEC, the UK FCA as well as the Australian ASIC regulation.

eToro has access to a wide range of products through the eToro trading platform and app, which includes more than 2,000+ financial CFD instruments Stocks, Indices, Commodities & Currencies & Cryptocurrencies. In addition, Users can also access ready-made CopyPortfolios, open Investing Accounts with zero commission, Professional Accounts, and access social trading services via CopyTrader which is eToro’s most popular feature.

Ready to start trading with eToro? Click the link below to get started!

XTB

XTB is one of the largest forex brokers globally with an excellent reputation backing a best-in-class trading experience. Established in 2002, they aren’t the senior-most player in the space, but certainly a veteran.

XTB provides Bangladeshi traders the opportunity to trade on more than 2,100 global markets and access a diverse financial class of over 4,000 instruments. These cover the forex currency pairs, stock and ETFs, CFDs, stocks, indices, commodities and cryptocurrency. In forex, you can trade in 48 currency pairs. Including the most common agreed currency pairs such as EUR/USD, GBP/USD and also EUR/GBP.

If you want to give it a try with XTB, you can use the link below:

AvaTrade

AvaTrade was founded in 2006 and it's a CFD broker. It's a beginner-friendly platform offering the trading of Forex, cryptocurrencies, commodities, indices, stocks, bonds, vanilla options and ETFs

Having won the award for the best Forex broker of 2020, AvaTrade’s AvaTradeGo mobile app offers Forex traders in Bangladesh an easy and intuitive mobile trading experience. Avatrade has low spreads for a commission free account with 100 USD minimum deposit account. The spread starts from only 0.9 pips (EUR/USD).

Want to give AvaTrade a shot? Check out the link below and start trading today!

In brief, Bangladeshi traders can try Forex trading using reliable international brokers. To lower the risk, always choose highly regulated brokers and trade responsibly to mitigate risks.

Forex Trading Time in Bangladesh

Being a decentralized market, Forex trading is available around the clock for five days a week. There are four main trading sessions for market: Sydney, Tokyo, London and New York. To maximize the trading opportunity, Bangladeshi traders (UTC +6) should need to understand these sessions and their timing.

Forex Trading Sessions in Bangladesh Time (BDT):

Sydney Session

BDT (UTC+6): 03:00 AM to 12:00 PM 

Slow-moving market for traders who prefer a quieter session with less volatility.

Tokyo Session

BDT (UTC+6): 06:00 AM to 03:00 PM

This lengthy timeframe has minimal opening ( only overlap Tokyo session ) but it particular active period of trading. As for currency pairs with a Japanese Yen (JPY), it is very active.

London Session

BDT (UTC+6) : 01:00 PM to 10:00 PM

As we move into London, this session is where the most volume, activity and also coincides with Tokyo and New York at different parts of the day. This session usually sees the highest trading volumes of major currency pairs like EUR/USD and GBP/USD.

New York Session

BDT (UTC+6): 19:00 — 04:00 (next day)

The New York session is another great trading hours choice, mainly during its overlap with the London session. Highly liquid and volatile, so ideal for trading USD-related pair.

When Should You Trade Forex in Bangladesh?

The optimal trading times vary based on the currency pairs you decide to trade.

High Volatility and Liquidity: When trading sessions overlap, such as the London-New York (7:00 PM to 10:00 PM BDT) or Sydney-Tokyo (6:00 AM to 12:00 PM BDT) periods, market activity increases, creating more opportunities.

Currency Pair-Specific Activity: For example, if trading AUD/JPY, the Sydney-Tokyo overlap (6:00 AM to 12:00 PM) is ideal. For EUR/USD, the London-New York overlap (7:00 PM to 10:00 PM) sees the most significant movement.

It allows you to harness the increased liquidity by only aligning your trading activity with the times at which your currency pair of choice is the most actively traded.

Conclusion: Take the Leap

Forex trading is a route to financial independence for those who are prepared to put in some time and effort. From educating yourself to choosing the right broker, every step matters. Want to begin your forex trading career? Open a demo account with a trusted broker and start today. Keep learning, responsible trading, unleash your skill to earn on global forex market.

With this guide, you are now ready to dive into forex trading in Bangladesh. Follow that, success is close at hand — with each trade!