Forex Trading in Guatemala

Although Guatemala is the most populous Central American country, its financial sector leaves a lot to be desired. The largely unregulated forex market allows large transactions in a wide variety of currency pairs. This can present an opportunity for the disciplined forex trader, although they should be careful to avoid dealing with unregulated brokers. Financial institutions all offer different forms of foreign exchange trading, and while individual investors in Guatemala City and beyond may have high aspirations, you must understand how to access these financial markets safely.

The Guatemalan government offers no regulatory assistance to forex traders. Normally, this would attract unscrupulous brokers, but the laws governing financial transactions within the country are overly complicated. As a result, there are no local forex brokers in Guatemala. Traders must instead operate through a foreign broker that accepts clients from the country.

Get Started with Forex in Guatemala

Many forex brokers from Europe target clients from Latin America. If you choose the right broker, you can benefit from the relative safety of the European regulatory structure. Get started trading forex in Guatemala by following these tips.

1. Your web connection: Sophisticated forex traders usually need a reliable internet connection. For best results, there can be no lag when you are accessing real-time news, charts or your trading interface. Make sure you are prepared.
2. Your broker: There are no forex brokers based in Guatemala. Many traders instead use online brokers based in Cyprus. Make sure they have a Spanish version of their website and trading platform if that is your preferred language.
3. Your bank: There are no restrictions on banking transfers in Guatemala, so you should be able to connect any bank to your broker. If you are using a Guatemalan bank, obtaining U.S. dollars (USD) to fund a trading account can be relatively easy. 
4. Your trading account: Your broker will allow various account funding methods, so check to see that at least one suits you. If you deposit more than $3,000, you will have to self assert that the money comes from a legitimate source. This is the only requirement for moving money in Guatemala.
5. Your trading interface: Make sure that any trading platform you choose does not slow down your execution. If it adds to your lag, then you probably should not use it. Forex is a fast-moving, liquid market that requires quick reaction and trade execution times.
6. Your trades: With all of the above in place, you can begin to trade forex from Guatemala. You can start on the foreign exchange market, but you may want to expand to a range of foreign currencies or other assets to grow your portfolio.

Guatemala Forex Trading Strategies

You need to know yourself before you try to trade the market. There are many different ways to trade forex, and what works for others may or may not work for you. Consider incorporating a comprehensive vision for your forex trading business into a trading plan that will include the individual trading strategies you intend to use to make money. 

The Day Trader

Successful day traders are typically very disciplined individuals who generally close out trading positions before the end of the day’s trading session. They often use technical analysis to inform their trading activities. 

The Swing Trader

If you’re a swing trader, then you usually employ momentum indicators to determine what markets are overbought or oversold and hence ripe for a correction. Swing trades may be open for longer times because they are generally based on significant shifts in market momentum that can take time to develop. 

The Position Trader

The position or trend trader typically benefits from analyzing long-term economic policy and trends in fundamental indicators that influence the prolonged directional movement of currency pairs. Charts become less important. Position traders may stay in a trade for months to years based on the confidence they have in their trading theories. Position traders should also avoid the temptation to become a swing or a day trader on a whim, a change that usually ends up with trading losses over time.

Forex Trading Example in Guatemala

If the USD/GTQ bid/ask spread was 7.7100/10., you could enter an order to purchase $100,000 USD versus the Guatemalan quetzal at 7.7110. If your broker allowed you to use a leverage ratio of 30:1 when trading this pair. You could therefore control a position of  $100,000 with a deposit of $3,333.33 in your margin account. 

After 4 hours, the new USD/GTQ bid/ask spread was 7.7140/50, so you decided to sell your $100,000 USD/GTQ position at 7.7140. You would have made a 30-pip profit that translates to  ($100,000 x 0.0030) or GTQ300.

Making Money with Forex in Guatemala

Your trading style will help you select the tools that best fit you. These are some of the more common.

• Going short: To short a currency pair, you sell the base currency and buy the counter currency. This is the opposite of going long the currency pair. 
• CFDs: These contracts for difference are derivative instruments whose value depends on that of their underlying asset. Many online brokers offer CFDs on a variety of assets that gives you a broader range of markets to trade. 
• Binary options: Binary options are exotic derivatives that involve their holder paying out a fixed premium to earn a fixed return if some market condition is met at or before the option’s expiration. 

Best Online Forex Brokers in Guatemala

There are many foreign online forex brokers doing business in Guatemala despite being headquartered abroad. Here are just a few of the most reputable to get you started.

Forex Terminology

The terms below are some of the fundamental concepts of forex.

• Pip: The smallest exchange rate movement in a currency pair, typically 0.0001. 
• Lot size: A standardized trading amount, typically 100,000 base currency units. 
• Orders: Commands given to your broker to execute trades on your behalf.
• Calls: A contract that gives the holder the right, but not the obligation, to buy an asset at a given price at or before its expiration date. The right to sell is known as a put. Each forex option is both a call and a put. 

Guatemalan Forex Traders Have Choices

Virtually every kind of forex trading vehicle is available to you in Guatemala. Not all of these financial products may be suitable for your level of expertise or market view. Remember that it is not your broker’s job to make you rich and that most retail forex traders lose money. Keep this in mind when you see ads from a foreign broker claiming to help you get rich easily trading forex.

Successful forex traders in Guatemala and around the world generally need access to relevant financial information. You can improve your chances of success by bookmarking this website. We have up-to-date information about forex trading you’ll benefit from.