Many people in Bangladesh are involved in forex trading. However, it is not yet legalized in Bangladesh. Therefore, traders from Bangladesh are unable to trade in the forex market like local DSE or CSE. However, still, there are some ways to trade forex from Bangladesh using several online payment gateways and Brokers.
30 November 2020, AtoZ Markets – As you know, Forex is the largest financial market in the world, with more than 5 trillion dollar transactions on a daily basis. Making profit from Forex trading is one of the effective ways to make money with your investments. Due to globalization and the increase of technology, people can buy or sell their favorite currency pairs from home. This makes Forex trading easy for Bangladeshi traders. However, it is essential to know how to trade in the forex market before making any investment.
To start forex trading in Bangladesh, you also need to know some points about Forex Trading.
What is Forex?
The forex market is a unique place to buy and sell currencies worldwide. It is a decentralized global market where all the world’s currencies trade through different exchanges. This means buying and selling foreign currencies like USD, EUR, CAD, CHF, GBP, and some commodities like gold, silver, and oil against other currencies. The unique feature of the forex market is that it is decentralized and it is the world’s most liquid market. No one has control over the market and no one can dominate it. The forex market is open 24 hours and 5 days a week and traders can trade any time that is suitable for him. However, here are four main sessions in a day for the forex traders. They are the New York market, the London market, the Tokyo market, and the Sydney market.
The main participants of the forex market are a large number of government & non-governmental financial institutions, banks, hedge funds & mutual funds. However, the involvement of retail traders in the forex market is not much comparing to investment giants. Therefore, retail trading is quite hard comparing to institutional trading. But now they have allowed small forex trading investors under an authorized Forex broker.
As technology has been improved, the involvement of the retail traders has been increased dramatically. Now, it doesn’t matter where the trader lives. A young boy from Bangladesh with a piece of good knowledge about technical and fundamental analysis can beat the big investors.
Forex Trading from Bangladesh
In some countries, forex trading is illegal or has some restrictions for forex trading. These countries are Belarus, China, India, Iran, Saudi Arabia, Canada, Pakistan, South Korea, Japan, and Turkey. Bangladesh is not one of these countries but foreign exchange regulation in Bangladesh is not friendly for traders.
The Bangladesh Bank (BB) regulates the Forex transactions in Bangladesh. Only Bangladeshi banks and their authorized money exchangers can make FX transactions. The legislation states that licensed brokers can sell FX products under the Foreign Exchange Regulation Act 1947. The general people, along with the Bangladeshis living abroad are not authorized to perform foreign exchange transactions.
As it is a highly potential platform, everyone wants to know how to trade Forex from Bangladesh. Many traders are doing this business from Bangladesh and earning a lot of foreign remittances. However, it is a risky job for newbies. Forex trading is a skill, not a shortcut to riches. There are certain ways to start forex trading from Bangladesh. In this article, we will see some steps of forex trading in Bangladesh:-
Finding a Right Broker
To start forex trading from Bangladesh, traders should find a broker that allows registration from Bangladesh. Retail currency trading has evolved as a decentralized and regulated activity in an over-the-counter market. Therefore, traders should research the reputation of brokers before opening a trading account.
A large number of Forex brokers are flying over the internet but, few of them are authentic. There is an excellent possibility of getting scammed. Traders should find a well-regulated broker and follow the review to identify the most reliable forex broker. For regulations, CySEC, FCA & ASIC is the most secure for the Bangladeshi traders. Although there is no broker that operates business activity in Bangladesh, some brokers provide service through a third party. However, a regulated broker follows a standard that can assure fund safety for Bangladeshi traders. Furthermore, some broker has a dedicated support team for Bangladeshi traders that provide supports from abroad.
After ensuring the regulations, it is advisable to research the services offered by a broker before opening an account. In that case, you should focus on the brokers that allow advanced trading platforms with analytical resources. These services can help you to make better trading decisions. There are many brokers that offer MT4, MT5, cTrader, and web trading platforms for Windows, Mobile & MAC.
The next thing to consider while choosing the broker is the commission or fees. It is usually the forex brokers charge for transactions through a bid-ask spread. That is a small difference between the current buying and selling prices of a currency. But, some brokers may have other types of commissions or fees for their services. These additional costs can be essential to consider determining the overall profitability of trading. Some Broker offers a fixed spread and some offer floating. However, the commission may change with the execution type. The ECN broker will allow you to trade from the liquidity provider directly but will charge a fixed commission with the floating spread.
Opening a Forex Account
To open a forex trading account, traders will need to follow some basic steps. The steps involved in opening an account can vary from broker to broker, but the procedure involves the following:
- Enter the broker’s website and review the types of accounts available. These may include small accounts with low minimum balances designed for novice traders; or accounts with advanced features designed for active traders. Therefore, you should find the right account types that will be suitable for your strategy and investment.
- The next step is to fill-up the registration form. The majority of brokers require the necessary information. This may include the name, surname, date of birth, place of birth, country of residence, gender, address, e-mail address, and telephone number. Some brokers may require more or less information depending on the regulation.
- After completing the registration, you need to validate your account. You must prove to the intermediary that the information you have provided is authentic. You can do this by uploading any two copies of your national ID card, passport, or driving license as proof of identity. Moreover, you need to submit the utility bills or bank statements to prove your address of residence. The validation process may need up to 3 days after submitting all the documents.
- Once your account has been verified, you will be notified by e-mail and your broker will give you a username and password to access your account. Therefore, you have to download a trading platform from the broker’s website to access charts.
- Then, you need to fund your account. Funding of the account can be done using various methods such as credit/debit card, Paypal, Skrill, Neteller, and Bitcoin.
Deposit or Withdraw Funds From Bangladesh
Withdrawing funds from Bangladesh is fine to some extent. However, it’s almost impossible to deposit funds to your online account from Bangladesh through any banking channel. Bangladesh Bank is very strict about fund transferring to outside of Bangladesh and. Therefore, any indication to send money to a forex broker may consider as a Money Laundering. However, some private Bangladeshi banks are issuing some travel cards that have a dual currency payment option. Funds can be loaded through Travel Cards that have not been approved by the Bank of Bangladesh so far. One can face any unpleasant situation by doing these things.
There are some alternatives ways to make transactions. If anyone has relatives residing abroad, they can send funds for you through Paypal, Neteller, Skrill, or in other ways. Someone who works for freelance jobs can also use his/her online Forex Trading income from Bangladesh. The Neteller and Skrill are the most favorable payment gateway for the forex traders in Bangladesh. A trader from Bangladesh can easily open a Neteller or skrill account with some easy steps which are similar to open accounts in forex Brokers.
However, any remittance from forex trading brokers is also illegal in Bangladesh. In that case, traders usually buy or sell their profits face to face in Bangladesh. It is also a simple step. You need to find someone who needs Neteller or skill. Then you meet with the person at a shopping mall or restaurant and exchange the cash with the online dollar transfer. However, there is a risk of fraud and being hijacked. As it is illegal to trade forex in Bangladesh, you may not get any help from the local authorities.
Opening a forex trading account is the same as opening any other type of financial accounts. Traders should consider the reputation, services, and costs of the brokerage agencies available. Traders should check those before committing to deposit funds and start trading with a particular broker. However, to perform forex trading from Bangladesh, traders should have knowledge and education about technical & fundamental analysis. Otherwise, all investments may lose at once.
Forex Trading is risky and challenging for anyone. But the trader could be successful by a qualified technical analyst. It is possible to earn the right amount of money by trading Forex from Bangladesh.
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