Qatar has one of the fastest growing economies in the world, the second highest GDP per capita globally and the highest in the Arab world at $124,500. The associated expendable income makes the country fertile ground for those interested in forex trading.
Despite the fact that many Qataris already actively trade currencies, the country does not regulate the forex market and has no local forex brokerages.
Overview: Trading Forex in Qatar
According to some estimates, over 300,000 Qatari residents currently trade forex, stocks, bonds and cryptocurrencies online. Qatar and its capital Doha represent a large center for online forex trading and many of the top online forex brokers accept clients based in the country, as well as provide them with services in the Arabic language.
The Qatari riyal, Qatar’s national currency symbol ر.ق (QAR) is divided into 100 dirham and is issued by the Qatar Central Bank. The riyal is maintained at a fixed peg by the Qatari Central Bank and must be changed to U.S. dollars or another major currency to open a forex trading account.
Due to the fixed exchange rate maintained by the Qatari Central Bank, trading the Qatari riyal against other currencies is only feasible for commercial banks, importers, exporters and currency hedge funds, which buy and sell non-deliverable forward contracts (NDF) to hedge currency risks.
Qatari local brokers, banks, insurance companies, stock market and asset management companies fall under the regulatory authority of the Qatar Central Bank, the QFC Regulatory Authority and the Qatar Financial Markets Authority (QFMA), which are all located in the capital Doha. Besides the large banks that trade in currencies, the regulating agencies only oversee securities brokers, hedge funds and investment firms based in Qatar.
With respect to forex brokerages, regulation and oversight for the best online brokers that open accounts for Qataris correspond to the U.K. Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), the U.S. National Futures Association (NFA) and the Australian Securities and Investment Commission (ASIC) to name only the top four.
Keep in mind that not all forex brokerages are created equal. Be sure to carefully consider your needs before you open an account.
How to Start Trading Forex in Qatar
Due to economic sanctions imposed by countries led by Saudi Arabia in 2017, transfers of foreign currency have been difficult and may cause problems for Qataris if you fund and withdraw funds from a foreign-based forex brokerage. Qatari forex traders generally fund their accounts with riyal and exchange it for U.S. dollars with introducing brokers that represent foreign-based companies.
Another way for Qataris to fund forex trading accounts is to purchase foreign currency for the purpose of trading from designated and authorized exchange banks. Despite the difficulties Qatari forex traders currently have in sourcing foreign currency to fund their accounts, a number of brokers with agents that operate locally can assist Qatari traders in bypassing this obstacle. Below, find a step-by-step guide to trading forex in Qatar.
Step 1: Consider Your Needs
Most major international forex brokerages will accept clients from Qatar. Most also offer their services in Arabic, as well as other major languages, to accommodate traders from the Middle East. Remember, not all forex brokerages are created equal, so you’ll want to make sure to carefully consider your needs before funding a live account.
Picking the best forex broker for your trading requirements depends on your level of experience in the forex market. For example, if you have already traded and have used some of the major trading platforms, such as MetaTrader 4/5, NinjaTrader or another popular trading platform, then you would probably be better off opening an account with a broker that offers the services with which you are already familiar.
Alternatively, if you have no experience or are just beginning to learn about forex, then you should probably find a broker that has an excellent customer service department and offers educational material for novice traders. Most major brokers offer clients a free demo trading account where you put no money at risk so you can practice trading and check out the broker’s services.
Regardless of your level of experience, gauging a broker’s services by opening a demo account could give insight into response time, dealer spreads and slippage during fast markets. For traders with limited trading experience, a demo account is ideal to get a feel for the forex market and to determine if trading forex is right for you.
Step 2: Pick a Broker
Selecting the best online brokerage for your needs is an important element of success in the trading business. Before you choose a broker, certain features offered by online forex brokers make a significant difference in the safety of your funds and your profitability.
The following list contains the most important elements you should consider before deciding on an online forex brokerage.
The most important factor when selecting an online forex broker is the safety of your initial deposit and subsequent profits. The best forex broker for your needs will be duly regulated with oversight from a major regulator, such as the UK’s FCA, Cyprus’ CySEC, the Australian ASIC, or the U.S. NFA or CFTC.
Many forex brokers let clients use their own proprietary trading platform or the MetaTrader 4 or MetaTrader 5 platform by MetaQuotes. The MetaTrader platforms offer a complete technical analysis package, are very customizable and provide you with the ability to automate your trading. The trading software is also supported by a large community of programmers that offer “expert advisors,” or EAs. These consist of third-party software that works with the MetaTrader 4 or 5 platforms to either automate trading or provide trading signals.
Not all brokers do business in the same manner. Since many brokers charge no commission, they make their money by the dealing spread, or the difference between the bid and offer exchange rates they quote. These brokers are known as market makers and generally take the other side of your trade. Other brokers use an electronic communications network (ECN) that takes various bids and offers from a selection of market makers and gives the trader the best price. They usually charge a small commission per trade, and you also have to pay the typically narrower dealing spread.
Leverage dictates how large a position you can hold with the funds available in your account. The amount of leverage you can utilize when trading forex makes a big difference, both in terms of potential profits and losses. Margin represents the amount of money you can leverage to hold a certain forex position. Leverage ratios vary widely among the large forex brokers, with some having maximum leverage ratios of 50:1 and range up to 3,000:1.
If you trade actively, then the cost of your trades will eventually add up, which is why a broker that offers wide dealing spreads will eventually cost active traders. Most traders want to select a broker with competitive spreads to cut down on their dealing costs, and this will usually make you more profitable in the long run.
Type of Account
Brokers generally offer different types of accounts, including a free demo account. If you fund your account with a considerable amount of money, you may qualify for narrower dealing spreads, as well as access to a free virtual private network or server service (VPN/VPS) and other perks not offered to traders with fewer resources.
Educational Material and Customer Service
New traders could greatly benefit from a broker with educational resources and knowledgeable customer service representatives. Also, the availability of a representative in the event of a trading error or other mishap could be important to both seasoned and novice traders.
Step 3: Open an Account and Start Trading
Some of the world’s highest rated online forex brokers will open accounts for traders based in Qatar. Below, you can find some of the top brokers available to Qatari residents. All of the brokers below translate to Arabic and support clients from all over the Middle East including Qatar:
The largest and most reliable forex broker in the United States, Forex.com charges no commissions and offers competitive dealing spreads.
In addition to the broker’s proprietary Advanced Trading Platform, clients can use MetaTrader 4 or 5.
Features for their proprietary trading software include more than 50 technical indicators, minor and exotic currency pairs, and trading in precious metals and futures.
Leverage for forex pairs is 50:1. FOREX.com is overseen by the U.S. NFA and CFTC.
This online forex broker offers four different account types, and lets you open an account with just $1. FBS has regulatory oversight from CySEC and offers trading via the MetaTrader 4 and 5 trading platforms. Commissions are $6 per lot traded, and leverage is unusually high at 3,000:1.
Based in the EU and regulated by the FCA, CySEC and ASIC, this award-winning broker offers interest-free Islamic accounts, and you can open an account with as little as $5. The broker offers trading via the MetaTrader 4 and 5 trading platforms and flexible leverage ratios of 1:1 to 500:1. If you make an initial deposit of $5,000, XM includes a free VPS service with your account.
A host of international brokers extend their services to Qatari-based traders, so trading forex in Qatar is relatively easy. They also generally offer interest-free Islamic accounts.
Furthermore, virtually all major forex brokers doing business in the Middle East have their websites, trading platforms and customer services in Arabic. When choosing a foreign broker, confirm that it has a good reputation and is well-regulated by a major financial authority.