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Forex Trading in Chile

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Political unrest in Chile has always been a hindrance to economic stability. The retail forex market has suffered for it, and the country likely does not have the number of traders that it should given its population and gross domestic product (GDP) rank. The country does hold the distinction of being the 15th freest economy in the world and 2nd lowest in corruption in all of South America.

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Government intervention into the forex market in late 2019 undercut confidence in the Chilean peso. The country has kept regulation on the forex industry relatively light considering its currency woes. Investors are encouraged to do their own due diligence in finding a broker. Chile does not necessarily make regulation a priority, so losses based on doing business with an unregulated broker might be difficult to correct.

Get Started with Forex in Chile

If you want to get involved in the Chilean forex market, you need a few things working simultaneously.

  1. Your web connection: Chile makes it relatively easy to get a decent web connection, but you may need one that is better than decent. You will need to connect to a broker, a trading interface and other financial institutions at once. When you get more sophisticated, you will likely want news feeds and multiple charts on a screen at once.
  2. Your broker: The forex broker that you choose in Chile makes a huge difference. Your broker is your main connection to the market and to your banking apparatus. Make sure that any broker you choose is regulated through a reputable financial institution. This is especially true if you choose to do business offshore.
  3. Your account: Regulation is only half of the game when vetting a broker. Regulators set a bare minimum, but the minimum is not what is necessary for success in trading. You need industry-standard financing through your broker. You also need great customer service to answer the questions that you will invariably have at some point.
  4. Your funding: Once you have found a broker with great service all around, you can begin to fund your investment account. It is a common practice to have a separate brokerage account connected to your broker. However, you should work through a system that allows quick withdrawals and other protections for your money.
  5. Your trading interface: Connect your orders to the market through a trading interface. Your interface should be intuitive to you although you may have a learning curve for the more sophisticated features.
  6. Your first investment: If you can start with a virtual account (a real account with fake money), do so. Once you understand the interface and how your money moves, you can begin to safely trade in the forex market.

Chile Forex Trading Strategies

Invest Chile – The International Investment Forum Chile

Once you set up your digital infrastructure, you can achieve good results with the appropriate strategy. Start from the level of vision and work your way down.

Breakout trading: Breakout trading is trading when a currency pair moves away from a range. When the price breaks out, it is likely to continue in a directional trend for a significant amount of time or distance away from the range.

Return to the mean: If a price stays in a range, then it is sometimes moving around an average. This average is known as the mean and it is defined as the price that the range most commonly returns to. Investors who can calculate this average can often profit by trading around it.

Retracement: This is a short-term reversal of a trend that either allows an investor to enter a trend or profit from the pullback.

Carry trading: Overnight holds in the forex market earn interest in the same way as any currency held in a bank account. Carry trading attempts to profit from the differences in currency interest rates.

Forex Trading Example in Chile

CLP/USD is currently at 0.0013/0.0015 and you want to order $750,000 with $58.28 in your brokerage account. Your broker lets you make the entire trade because of the 5.55% margin rate on this currency pair.

CLP/USD is trading at 0.0017/0.0019 after 5 hours. Your profit here is 

($750,000 x 0.0017) – ($750,000 x 0.0015), or $150, on the move of 2 points.

Making Money with Forex in Chile 

Forex Analysis and Forex News

Here are a few techniques to know so that you can take advantage of your investment vision.

  • Shorting a market: Shorting the market means selling a currency before you buy it. You buy it for less than you sold it for, and you are selling with borrowed money at first.
  • Contracts for difference (CFDs): Profiting from a currency pair without owning it is why you buy CFDs. CFD brokers also have the ability to offer larger leverage in your account.
  • Binary options: Binary options give you a fixed choice — yes or no — and a fixed reward or punishment based on whether you are right or not.

Best Online Forex Brokers in Chile 

Choose from one of the many forex brokers that do business in Chile. Make sure the broker is regulated.

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

Here are some of the common terms that describe important concepts in the forex market.

Pip: Describes the basic unit of forex and is equal to $0.0001

Lot size: The size of the deal you are investing in

Orders: The full description of your investment

Calls: A currency pair contract that you can either execute at a future time or sell before that date

Growing in a Growing Economy

The Chilean economic system is full of opportunities. With more people than ever in the forex market, there has never been a better time to join this investment community. You do have to learn due diligence, but you start at a relative advantage to other South American countries without stable economies.

Successful traders plug themselves into an information flow that allows them to identify trading opportunities fast. These opportunities come and go quickly, and if you don’t know how to spot them, you may be left behind. Bookmark our website for up to date information and winning tactics you can use for success in forex.

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