Myanmar, known formerly as Burma, has 2 forex markets in competition with each other — the official exchange and the underground market right beside it. No, literally, the underground market is right beside the building housing the Yangon Stock Exchange. Individual currency dealers do business in an alley behind the Yangon building, transacting through bank transfers made on smartphones.
Believe it or not, this underground market is significant enough to help determine the formal rates of the Myanmar kyat. This tends to add to the volatility of the currency because the informal market sometimes offers better rates than official pricing. Although there is no official way to measure, some experts believe that the official and unofficial markets transact approximately the same amount of currency.
Get Started with Forex in Myanmar
If you want to trade forex from Myanmar, you will need to be especially careful. Regulators do not have much reach in the country because of the influence of alleyway forex dealers. Pay close attention to the companies in your digital financial chain to avoid fraud and theft of information.
- Internet: Despite its unregulated market, Myanmar has relatively good internet in its more developed regions. You will need a connection that maintains its veracity under pressure because you will be connected to multiple sites and many programs simultaneously.
- Broker: It is probably best to choose a broker that is regulated through a well-known financial overseer outside of Myanmar. Many investors coming from the country do business with brokers under the auspices of the EU for a more stable regulatory environment.
- Bank: The regulation that keeps your broker honest will also protect your financial investments. Be sure that you have a good connection between your bank and broker for quick withdrawals and deposits, especially if you plan to use margin on your account.
- Money: Test your banker/broker connection with a few small deposits and withdrawals before fully funding your account.
- Interface: Standard trading interfaces like MetaTrader are probably best for your experience investing in forex from Myanmar.
- Investing: If everything is in place to your liking, you can begin trading in the forex market.
Myanmarese Forex Trading Strategies
The way that you trade forex is first and foremost how you view the market. Take a look at different perspectives to see which one most accurately depicts your investment style.
Day trading is defined by fast-moving investments and quick reaction times. As a day trader, you will probably be much more concerned with the bid/ask spread and daily trading volume than you will with political upheaval and economic downturns. Day traders hold trades for a very small amount of time — minutes or even just seconds. The first opportunity for a profit is likely the one that a day trader will make. Day traders do not give the market a chance to pull back or reverse direction on them.
Swing traders maintain a balance between studying chart patterns and taking heed of the latest news cycle. Because the swing trade develops over the course of days or weeks, the news may affect how the chart pattern plays out. Swing trading also gives a volatile currency like the kyat more time to match its price to its value, although this is not always how a swing trader makes a profit.
The position trader tends to hold a position in the forex market for months or years. This time is meant to let a currency’s position develop into a balanced state. Ideally, the position trader invests in a difference between a currency’s price and value, hoping that it will return to its logical place if enough time passes.
Forex Trading Example in Myanmar
You want to order K5,000,000 when the bid/ask range of MMK/USD is 0.0007/0.0008. The broker you are working through provides an MMK/USD margin rate of 11.71%. This means you can buy K5,000,000 with $439.13 cash.
After 15 hours, the new MMK/USD bid/ask range is 0.0009/0.0010. This is only a 1-point move, but since your order was large, you will profit you (K5,000,000 x 0.0009) – (K5,000,000 x 0.0008), or $500.
Making Money with Forex in Myanmar
Matching your preferred way of trading to a successful investment strategy gives you an optimal chance of success. Here are just a few of the most significant strategies that are commonly used in the forex market.
- Short selling: You can often make money trading a weaker currency if you focus on selling that currency rather than buying strong ones. This strategy is known as short selling, and it is very effective for traders who are used to dealing in weaker currencies.
- CFDs: CFDs are contracts for differences, which allow you to participate in the forex market without taking possession of any currencies. In an unregulated market, CFDs are sometimes fraudulent.
- Binary options: Binary options are another financial vehicle that should be avoided in an unregulated market like Myanmar. Although the investment is simple — a yes or no question — the brokers that offer it often do bad business, cheating investors out of profits or refusing to pay winning bids.
Best Online Forex Brokers in Myanmar
Choose from a list of offshore forex brokers that do business in Myanmar. Be sure to check the financial authority that regulates them as well.
You will need to know the most important terms that every forex trader uses in order to evaluate strategies and communicate with your broker.
- Pip: The smallest baseline of measurement in the forex market, usually pegged to the U.S. $0.0001
- Lot size: Your order size, which is usually 100,000 currency units unless you specify differently (ordering a micro-lot)
- Orders: The full details of your forex investment
- Calls: A contract you can buy or sell that lets you control a certain amount of currency for a limited amount of time
Moving in the Underground
Myanmar is unique in that it cannot upend its underground market without completely upending its official currency. The central bank is moving slowly toward stabilization techniques like futures trading, but progress will likely be slow. The country is struggling to implement its updated Foreign Exchange Management Law (FEML), which is to replace its stagnant FEML from 2012.
The best chance to succeed in the Myanmar forex market is having up-to-date news and strategies. Bookmark this website to stay in touch with what you need to know for your best chance of success.
Benzinga's #1 Breakout Stock Every Month
Looking for stocks that are about to breakout for gains of 10%, 15%, even 20% potentially or more? The only problem is finding these stocks takes hours per day. Fortunately, Benzinga's Breakout Opportunity Newsletter that could potentially break out each and every month. You can today with this special offer: