Want to jump straight to the answer? The best forex broker for most people is definitely FOREX.com
Thanks to international forex brokers steadily expanding into Iraq, it’s now possible for Iraqi citizens and travelers to get involved in the forex market. Though trading forex is still a relatively new concept in most parts of Iraq, it’s never been easier to learn more about trading online.
Our guide will help you learn more about how you can begin trading forex in Iraq, how to open a brokerage account and will introduce you to a few beginner trading strategies.
Get Started with Forex in Iraq
Getting started trading forex begins with opening a brokerage account. Here are the basic steps you’ll go through when you open your account.
- Step 1: Find a device connected to the internet. The 1st step to opening a forex brokerage account is finding a stable connection to the internet. Though you can open an account on nearly any device, your internet connection must be consistent and private. Run a speed test on your device before proceeding.
- Step 2: Choose a broker. Once you’ve got a stable connection to the internet, it’s time to choose a broker. Though there are both international and domestic brokers offering services to investors in Iraq, domestic brokers may not be registered and may offer dangerously high leverage and margin rates.
We recommend working with an international broker registered with a recognized foreign currency authority like the Cyprus Stock Market Commission or the Australian Securities and Investment Commission.
If you’re a follower of the Islamic faith, consider opening an account with a broker that offers “swap-free” accounts. These accounts don’t accumulate interest on overnight positions, which keeps you in accordance with Sharia laws regarding moneylending.
- Step 3: Open an account. After selecting a broker, use the broker’s processes to open an account. You’ll usually need to submit personal identification information before you can open your account.
- Step 4: Download your trading software. Though your broker might offer its own proprietary platform, many brokerages require traders to download a 3rd-party software like MetaTrader 4 or 5. Check and see what your broker offers before you download any platform.
- Step 5: Fund your account. When your account is fully-opened, link your bank account to transfer trading funds. Depending on your broker, you might also be able to fund your account with a debit card transfer or a transfer from an electronic wallet.
- Step 6: Make your 1st trade. It may take a few days for your trading funds to appear in your account. Once they arrive, you can officially begin forex trading.
Iraq Forex Trading Strategies
There are 2 major types of trading strategies that forex traders use to determine which currencies to buy and sell: technical analysis and fundamental analysis. The ideal trading strategy for you will vary depending on the currencies you trade, whether you’d like to trade in the short-term or the long-term and your financial goals.
Let’s take a look at a few of the differences between these 2 trading styles and when they’re best used.
Traders who use technical analysis rely on charting patterns and candlestick charts to predict how currencies will shift in value. These traders typically identify a set selection of indicators, buy signals and sell signals and wait for them to form before executing their trades.
Test: The head and shoulders pattern is an example of a charting pattern forex traders may use to determine when to buy or sell.
The majority of traders who rely on technical analysis as their primary trading strategy use a short-term or medium-term approach to trading. They may hold onto their trades for as little as a few seconds, and they may make multiple trades throughout a single day to capitalize on small price movements. Technical analysis traders may also use special charting software and order types to automatically execute trades when predefined signals are reached.
Traders who use fundamental analysis don’t usually look for day-to-day currency movements. Instead, they study the underlying economic and political factors that influence how currencies change value over time. Some examples of primary sources traders who use fundamental analysis might consider include:
- GDP reports
- Unemployment rates
- Inflation rates
- Consumer confidence indexes
- Election data and results
Test: A strong economy means a strong currency. Investors who use fundamental analysis look for indicators that signal the strength of the country issuing the currency.
Most traders who use a fundamental analysis strategy take a long-term approach to trading. They might hold onto their currencies for weeks or longer, capitalizing on larger price movements. Though fundamental analysis strategies don’t usually require complicated charting software, you’ll still need to know how to interpret news and economic reports before you trade.
Forex Trading Example in Iraq
Forex traders in Iraq earn money by capitalizing on changes in a currency’s value. Though most traders don’t fund their accounts with Iraq’s native dinar currency, brokers often allow you to convert your dinars into a reserve currency (like the USD or EUR) to use as a base currency from a dinar-based account. Let’s take a look at an example of how you might be able to earn money trading forex.
Imagine that you believe that the value of the European euro is going to rise in relation to the Japanese yen. You decide to use the euro as your base currency, and you deposit €10,000 into your brokerage account. Your broker offers you 10:1 leverage, which allows you to invest €100,000 into the yen. 1 euro is currently equal to 120 yen. You convert your entire lot of euros into yen, which leaves you with ¥12 million.
Over time, the value of the yen falls — when 1 euro is equal to 115 yen, you decide to cash out. You convert your entire lot of yen back to euros, which leaves you with about €104,347. After accounting for the money you borrowed in leverage and your initial deposit, you’ve profited about €4,347 on this trade. Your broker may be able to help you withdraw this as dinar to your account for an additional fee.
Making Money with Forex in Iraq
Trading forex in Iraq is legal, and you’re free to earn as much profit as you can take from your forex trading. However, forex traders in Iraq are at a number of disadvantages when compared to foreign traders. The forex market of Iraq is still largely unregulated — not every broker operating in Iraq is licensed, and you may find margin rates of up to 1,000:1 with local brokers. This is a very dangerous amount of leverage and can quickly cause you to fall into debt with a single bad trade.
Additionally, Iraqi traders have issues finding reliable brokers due to the high fluctuation of the dinar. Few brokers will allow you to trade with dinar as your base currency due to liquidity issues inherent to the dinar. However, you may be able to convert your dinar to a reserve currency directly through your broker for a small exchange fee.
Forex scams remain common throughout Iraq. There are a few ways that you can protect yourself and your capital as a trader in Iraq. We recommend working with licensed, regulated international forex brokers offering services to traders in Iraq. We also recommend perfecting your trading strategy using a demo account and a reserve base currency before you deposit funds into your brokerage account.
Best Online Forex Brokers in Iraq
It can be very difficult to find a reliable forex broker as a resident or traveler in Iraq. Many brokers do not accept the Iraqi dinar as a base currency due to its high level of risk and volatility. We strongly recommend working with an international broker offering services to Iraqi citizens or to make your base deposits in a more stable currency like the U.S. dollar or the euro.
Consider opening an account with one of our top brokers in Iraq, listed below. These brokers offer enhanced levels of safety and security for forex traders in Iraq.
Before you can trade forex, you’ll need to familiarize yourself with the unique terminology that traders use to discuss currency movements. Below we’ve defined a few of the most common terms you’ll hear on a daily basis when you trade.
Pip: the smallest possible value that a currency can move by. A single pip is usually equal to 0.0001 of any unit of currency. For example, if 1 dinar moves from a value of $0.0008 to a value of $0.0009 in relation to the USD, you could say that the value of the currency has increased by 1 pip.
Lot size: your lot size is equal to the total number of units of currency that you’re exchanging. For example, if you decide to exchange 100,000 د.ع into euros, your total lot size is equal to 100,000.
Orders: a specific set of instructions that you provide to your broker that tells the broker exactly which currency you want to buy at the price you’re willing to pay. You’ll also place an order when you want to sell a currency. There are multiple different types of forex orders, and the order types that you’ll have access to may vary by broker.
Calls: a call (or “margin call”) is a requirement from your broker to deposit more money into your trading account. In most cases, you’ll receive a margin call when you use leverage to trade and the value of your portfolio drops below a certain percentage of its original value. A single margin call can quickly wipe out any profits that you make trading, so be careful when you use leverage.
Making the Most of the Forex Market
Though the Central Bank of Iraq has begun to take steps to regulate the currency market, regulations are still behind the current state of forex trading in Iraq. We recommend working with an international broker and carefully monitoring your leverage usage before you trade forex.
Just a few days of research and comparisons can end up saving you thousands of dollars by the time you get started trading with real money.
Get a Forex Pro on Your Side
FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets plus spot metals with low pricing and fast, quality execution on every trade.
You can also tap into:
- EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
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- Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program
Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.
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