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Forex Trading in Barbados

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Traders in Barbados are able to engage in the online foreign exchange (forex) market to speculate on exchange rate movements. If you reside in Barbados and are new to forex trading, here’s how you can get involved in trading currency pairs. 

Get Started with Forex in Barbados

The Central Bank of Barbados was established in 1972. As part of its plans for economic development, the Barbados dollar (BBD) was introduced in 1973 to be used in place of the Eastern Caribbean dollar in Barbados. The Central Bank of Barbados has the sole authority to issue Barbados dollars. The banknotes of Barbadian dollars have denominations of 2, 5, 10, 20, 50 and 100. A Barbadian dollar is divided into 100 cents. 

The Barbados dollar notes were redesigned in 2013. The new series of banknotes featured imprints of outstanding Barbadians and major security measures to curb the counterfeiting of the national currency.  

Banknotes of Barbados Dollars

The cultivation of cash crops such as sugarcane, yam, sweet potatoes and corn are prevalent in Barbados. Apart from agriculture, tourism and financial services also generate sizable revenue for the Caribbean country. There are more than 45 offshore banks, 242 insurance companies and 3,065 international business companies operating in Barbados. 

Here’s a step-by-step guide to help you get started with forex trading in Barbados.

Step 1: Get a digital device with fast internet connectivity. 

You can use your desktop, laptop, tablet or smartphone to trade forex. The exchange rates of the currency pairs listed at online brokers frequently fluctuate. Having a personal device to track these changes whenever necessary and adjust positions is very helpful to successful forex trading. 

Step 2: Find an online forex broker. 

There are several forex brokers available online. Go through their websites and choose a broker that lets you trade the currency pairs you are most interested in speculating on. 

Be sure to check the footer of its website for information on their regulatory status. If you can’t find any such information from reputable regulators like the U.S. Securities Exchange Commission (SEC), the UK’s Financial Conduct Authority (FCA) or another strict regulatory agency, the broker probably can’t be trusted. 

Account Minimum
100 of your selected base currency
Pairs Offered
80+
Get started securely through FOREX.com’s website
Account Minimum
100 of your selected base currency
Pairs Offered
80+
1 Minute Review

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. You can’t invest in the stock or bond market through your FOREX.com and you cannot open an account with tax advantages. The confusing pricing and margin structures may also be overwhelming for new forex traders.

Best For
  • MetaTrader 4 users
  • Beginner forex traders
  • Active forex traders
Pros
  • 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
Cons
  • Cannot buy and sell other securities (like stocks and bonds)
  • Confusing margin requirements that vary by currency
  • Limited customer support options
  • Cannot open an IRA or other retirement account
Commissions
$10 value per pip
Account Minimum
$0
Get started securely through IG Group’s website
Commissions
$10 value per pip
Account Minimum
$0
1 Minute Review

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
Pros
  • 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
Cons
  • U.S. traders can currently only trade forex
  • Customer service options are lacking
  • No 2-factor authentication on mobile
Account Minimum
$50 USD
Pairs Offered
47
Get started securely through eToro’s website
Account Minimum
$50 USD
Pairs Offered
47
1 Minute Review

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
Pros
  • 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
Cons
  • U.S. traders currently limited to cryptocurrencies
  • Only 15 major coins available to trade
Account Minimum
$100 USD (or equivalent)
Pairs Offered
69
Get started securely through HYCM’s website
Account Minimum
$100 USD (or equivalent)
Pairs Offered
69
1 Minute Review

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
Pros
  • Wide range of currency pairs available
  • Excellent selection of educational tools
  • $0 deposit and withdrawal fees
Cons
  • Not currently available to traders based in the U.S.
Account Minimum
100 EURO
Pairs Offered
50+
Get started securely through AvaTrade’s website
Account Minimum
100 EURO
Pairs Offered
50+
1 Minute Review

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
Pros
  • 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
Cons
  • 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

Step 3: Sign up for an account. 

You can open a new account with the forex broker on its website. Most online forex brokers require a minimum deposit amount to open an account. Most brokers also offer different kinds of accounts based on your initial deposit amount, desired benefits and other trading requirements. Choose the one that’s right for you. 

Step 4: Transfer funds to your account.

Once you’ve signed up for an account, you need to transfer funds to start trading forex. Depending on the broker you’ve chosen, you can choose your accounting currency and fund your account using several options. Generally, these funding options include bank wire transfers, ewallet transfers and debit cards. 

Step 5: Download a forex trading platform.

You may need to download a forex trading platform on your computer or smartphone that your broker supports. Take the time to customize the look and feel of the platform to help you trade more efficiently. 

Step 6: Begin your forex trading journey. 

Before you start trading forex, you might want to open a demo account funded with virtual money. These practice accounts can help you get used to the interface of the forex broker without the risk of losing money. After you feel confident using the platform and your trading strategy, you can start trading forex using real money in a live account.

Barbados Forex Trading Strategies

Many forex traders from all over the world rely on a few basic trading strategy types to maximize their profits and minimize losses. You can check out these common forex trading strategies to help achieve better results when trading. 

Day Trading

Day trading involves closely monitoring intraday exchange rate movements of forex currency pairs as you open and close out all positions within a single trading session. These day trades can take place anytime during the day and will be closed out on the same day. Traders have adopted this method to reduce the chance of losses from overnight market volatility when they cannot watch the market. 

You can adjust your day trading positions a couple of times over the day based on market movements and as your market views change. Day trading can be time-consuming, so make sure you have the spare time required to commit to a particular day trading strategy. 

News Trading

Global economic news and events can have a strong impact on relevant currency pairs quoted in the forex market. Many traders stay on top of influential financial information to anticipate the short-term exchange rate movements of forex currency pairs. 

You can research relative inflation and interest rates, monetary policy and multinational trade deals made between countries. News trading often involves quick and appropriate reactions to new information to make a profit and low stop-loss order slippage at your broker to help limit losses. You run the risk of missing the window of opportunity if you’re not fast enough with your trade executions. 

Scalping

Scalping is a very short-term trading strategy that typically involves making numerous quick trades throughout the day aiming to capture small profits while taking even smaller losses. The accumulated profits earned scalping currency pairs can add up to a sizable income for quick traders. 

Rapid exchange rate movements during daily trading sessions can cause slippage on your stop-loss trade executions. These losses can quickly eat away at your profits, so it makes sense to choose a broker that offers no order slippage if possible. This method of trading requires a lot of time and focus to be successful, so scalping will probably not be suitable for traders with another full-time job. 

Momentum Trading

Momentum trading or swing trading is a short- to medium-term trading strategy that can involve taking overnight positions and tends to profit from market volatility. Swing traders typically trade along with the prevailing trend but also watch momentum indicators for market reversal signals so that they can also profit from corrections. 

This method of trading can be less stressful than day trading or scalping, although taking overnight positions does involve extra risks. You can adjust your positions throughout the week to take profits and cut losses.   

Forex Trading Example in Barbados

The long-standing peg of the Barbadian or Bajan dollar to the U.S. dollar makes the USD/BBD an unusually stable forex currency pair. Most traders will therefore want to operate in other currency pairs that exhibit greater exchange rate volatility. 

As an example, let’s say that the USD/BBD forex currency pair is trading at 1.9919. It will cost you 1.9919 Barbadian dollars to buy 1 U.S. dollar, so you can buy $100,000 for 199,190 Barbadian dollars. You can also take a $100,000 position in USD/BDD in your margin account if your forex broker allows you to trade that currency pair. 

Assuming a leverage ratio of 30:1, that means you would need to have at least $3,333.33 in your broker account as margin to initiate that position. After 1 month, the price of the USD/BBD currency pair might have risen to 1.9981. 

At that time, you can sell out your $100,000 position in USD/BBD to realize a profit of 620 Barbadian dollars over that time frame. Alternatively, if the USD/BBD exchange rate instead fell to 1.9880, you would have lost 390 Barbadian dollars. 

USD/BBD exchange rate over the last 1 year.

Making Money with Forex in Barbados

When the Barbadian dollar was newly launched in 1973, 2 Barbadian dollars equaled 1 U.S. dollar. In almost 50 years, the Barbados dollar has maintained that value with minimal changes. This aspect of the native Barbadian currency has prompted some forex traders to trade the well-established range around that pegged value if they have access to the Interbank market or can actually find an online broker that will let them operate in the USD/BBD pair. 

Over the past year, the USD/BBD currency pair has hit a 52-week high of 2.0421 and a 52-week low of 1.9800. These relatively small exchange rate movements can present a range trading opportunity for residents of Barbados, although most Barbadians will probably want to trade other more liquid currency pairs that exhibit greater volatility. 

Best Online Forex Brokers that Accept Clients from Barbados

You will probably need an online broker to start your forex trading journey. These brokers support trading platforms with advanced tools to help you browse through, chart and trade numerous forex currency pairs. You can also find tons of educational resources and daily financial news from around the globe to improve your forex trading knowledge on many brokers’ websites.

Take a look at some of the best forex brokers that will take clients from Barbados in the table below. 

Account Minimum
100 of your selected base currency
Pairs Offered
80+
Get started securely through FOREX.com’s website
Account Minimum
100 of your selected base currency
Pairs Offered
80+
1 Minute Review

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. You can’t invest in the stock or bond market through your FOREX.com and you cannot open an account with tax advantages. The confusing pricing and margin structures may also be overwhelming for new forex traders.

Best For
  • MetaTrader 4 users
  • Beginner forex traders
  • Active forex traders
Pros
  • 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
Cons
  • Cannot buy and sell other securities (like stocks and bonds)
  • Confusing margin requirements that vary by currency
  • Limited customer support options
  • Cannot open an IRA or other retirement account
Commissions
$10 value per pip
Account Minimum
$0
Get started securely through IG Group’s website
Commissions
$10 value per pip
Account Minimum
$0
1 Minute Review

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
Pros
  • 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
Cons
  • U.S. traders can currently only trade forex
  • Customer service options are lacking
  • No 2-factor authentication on mobile
Account Minimum
$50 USD
Pairs Offered
47
Get started securely through eToro’s website
Account Minimum
$50 USD
Pairs Offered
47
1 Minute Review

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
Pros
  • 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
Cons
  • U.S. traders currently limited to cryptocurrencies
  • Only 15 major coins available to trade
Account Minimum
$100 USD (or equivalent)
Pairs Offered
69
Get started securely through HYCM’s website
Account Minimum
$100 USD (or equivalent)
Pairs Offered
69
1 Minute Review

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
Pros
  • Wide range of currency pairs available
  • Excellent selection of educational tools
  • $0 deposit and withdrawal fees
Cons
  • Not currently available to traders based in the U.S.
Account Minimum
100 EURO
Pairs Offered
50+
Get started securely through AvaTrade’s website
Account Minimum
100 EURO
Pairs Offered
50+
1 Minute Review

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
Pros
  • 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
Cons
  • 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

Forex Terminology

You should be familiar with a few basic forex terms before you start trading. Many forex traders use these terms regularly.

Pip: The smallest exchange rate movement in a particular currency pair. In most cases, a single forex currency pip change will be in the 4th decimal place or 0.0001. For instance, if the USD/BBD exchange rate rose from 1.9981 to 1.9982, it is considered a movement of 1 pip.

Lot size: This is a standardized trading amount; 100,000 base currency units are the standard lot size at most online forex brokers. You can also transact currency pairs in smaller micro and mini-lot sizes at some brokers.

Orders: An order is a command given to your online forex broker to execute a trade for you in the market. When you want to buy or go long a forex currency pair, you place an order to buy the base currency and sell the counter currency. When you want to sell or go short on a forex currency pair, you execute an order to sell the base currency and buy the counter currency in your desired amount.

Margin calls: A notification from your broker to deposit more margin in your trading account. Instead of issuing a margin call, most online forex brokers will instead automatically close out your open positions if the margin required to hold them exceeds your trading account’s balance. Keep an eye on your account balance and required margin when trading to make sure this does not happen. 

Trade from Barbados Today

Islands in the Caribbean such as Barbados have limited job opportunities. Due to a shortage of employment options, Barbadians who feel comfortable taking financial risks can explore trading forex as a way to possibly generate more money from their risk capital. Moreover, the Barbados government stated in 2019 that it had increased the amount of foreign currency that residents can hold in bank accounts to $10,000 in 2019 and that it aims to pursue a policy of gradually relaxing exchange controls. This may help residents of Barbados trade BBD, although most online forex traders will want to operate in the major currency pairs instead because of its greater liquidity. 

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