How to Start Forex Trading in the Bahamas

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Contributor, Benzinga
June 25, 2023

Trade forex in the Bahamas with FOREX.com as your online trading platform.

The Bahamas has a reputation as a financial safe haven for investors around the world. The Securities Commission of the Bahamas (SCB) has helped to shape financial policy in the region and has extensive experience with forex and contracts for differences (CFD) brokers. Strict regulation relative to other Caribbean Islands helps to ensure that any broker doing business from the Bahamas has been thoroughly vetted on an international standard. That makes forex trading in the Bahamas a good bet.

The SCB recently updated its standards for online brokers, including a ban on binary options trading. Many experts believe that the overhaul will attract even more traders from Europe who are fleeing constrictive standards imposed by the European Securities and Markets Authority (ESMA). The Bahamas has also taken a tough stance on aggressive and misleading marketing. Many jurisdictions are following the country’s lead, endorsing policies that empower the educated retail trader and balance opportunity and security.

Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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Attribution: Wikipedia

Get Started with Forex in the Bahamas

Although the Bahamas offers many protections, you must still take responsibility for your individual investment platform. Here are the elements you need to ensure the best chance of success in forex while protecting your personal and financial information:

  1. Solid internet: Your connection to the web is your connection to the forex market. You will need a connection with the bandwidth to handle multiple websites open at once and quick movement between sites. Good investing often includes real-time consumption of charts, news and account balances.
  2. Reputable broker: You can find a number of regulated brokers in the Bahamas, or you can go offshore. If you choose an offshore broker, make sure they have a similar level of regulation from a well-known financial authority.
  3. Integrated bank: Your broker should easily integrate with your bank account. You should be able to easily transfer funds to and from your bank. Check the broker’s internal policy and make sure it lines up with the financial authority that is regulating that broker.
  4. Accessible funding: You should be able to easily fund your investment account from an outside source now. Start with a small transfer to test the connection before fully funding the account. Check the reputation of the broker online as well.
  5. Intuitive trading: Your broker may connect you to a trading platform, or you may use one of the reputable 3rd-party choices like MetaTrader. Whatever you choose should be intuitive for you and fully integrated into the rest of your setup.
  6. Logical investing: Your setup is half the battle — it protects your identity and capital from unfair exploitation. The other half is trading with logically sound strategies.

Bahamians Forex Trading Strategies

Many of the same strategies that allow you to trade forex profitably using the Bahamian dollar (BSD) work across the world. Take a look at some of the blueprints that successful traders use to inform their successful strategies.

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Attribution: Eleuthera Times – Bahamas’ Prime Minister Hubert Minnis is known for investor-friendly policy

Short Time Frame Investing

In forex trading, short-term investing usually means you hold a trade for no more than 1 day. Short-term investing includes scalping, day trading and momentum trading. Scalping is an extremely high-frequency form of trading that may include automated aspects. Day trading and momentum trading may not be as fast as scalping, but they are still relatively high frequency.

Mid-Time Frame Investing

The mid-term time frame includes all trades that last from a few days to a few weeks. Some investors may hold a swing trade for a few months to allow it time to develop. Learning how to define trading ranges and follow currency trends becomes very important. Most investors will learn how to interpret price, volume and momentum indicators to enhance their technical assessments. This time frame also includes news trading, which focuses on how significant news events may affect the price of currencies.

Long Time Frame Investing

If you are interested in the fundamentals behind currency prices and values, you’re likely to enjoy investing in the longer term. During this time frame, inefficiencies between the value and the price of a currency have time to correct themselves. Trading indicators and news have less of an impact, and variables such as the reserve rate holdings, exchange rate volatility and gross domestic product (GDP) matter much more. For instance, if you are interested in which mineral products the Bahamas exports to the U.S., Poland and Nicaragua, you may be able to profit from this research in forex. 

Forex Trading Example in the Bahamas

Imagine that the BSD/USD is trading at 1.0100/1.0200. This seems out of place to you, and you look to buy B$40,000 to profit from a price increase. Your broker allows your account to hold a B$40,000 investment with only $2,099.02 cash in your account because this currency pair has a margin rate of 5.17%. 

The new BSD/USD price after 2 hours of trading is 1.0300/1.0400, a 100-point move. Your total profit is (B$40,000 x 1.0300) – (B$40,000 x 1.0200), or $400.

Making Money with Forex in the Bahamas

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Attribution: Pinterest – Atlantis Paradise Island in the Bahamas

Once you have your blueprint in place, you can drill down into the tactics you will use daily. Here are some important profit vehicles that you should know about:

  • Short selling: If you want to sell weaker currencies against the Bahamian dollar, you can profit through short selling. 
  • CFDs: Regulators in the Bahamas have found a good balance between allowing contracts for difference (CFD) brokers without creating an unsafe environment for scammers. Use CFDs if you don’t need to own currencies and you want an opportunity for high-leverage trading.
  • Binary options: One of the regulations the SCB overhauled was access to binary options brokers. These yes or no options seem simple on the surface, but there is actually more room for fraud here. Tread carefully if you do business with a binary options broker while located in the Bahamas because the broker will be offshore.

Best Online Forex Brokers in the Bahamas

There are many reputable and compliant forex brokers in the Bahamas. Choose yours based on the feature list that matches your personal investment needs:

  • securely through Forex.com's website
    securely through Forex.com's website
    Best For:
    Forex Trading in and Outside the U.S.
    Rating:
    Read Review

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

  • securely through eToro Forex's website
    securely through eToro Forex's website
    Best For:
    Demo Accounts
    Rating:
    Read Review

    CFD trading is not available to U.S. users. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • securely through AvaTrade's website
    securely through AvaTrade's website
    Best For:
    Non US Forex Trading
    Rating:
    Read Review

Forex Terminology

You cannot master forex trading without mastering its language.

  • Pip: $0.0001, or the base pricing unit in forex
  • Lot size: 100,000 currency units unless specified in the order
  • Orders: Your buy or sell instruction through the trading platform to your broker
  • Calls: A contract for a future order that has an intrinsic value of its own

Building Wealth on the Beachside

European regulators are now taking cues from the success of the Bahamas in the forex market. Foreign exchange continues to increase in the country and retail forex investors are finding more opportunities without missing out on any safeguards. Financial authorities in the country seem to hold the reputation of the financial infrastructure as a high priority. The Bahamas will likely continue to be a great place to trade forex in the coming years.

Don’t let the beautiful beaches of the Bahamas lull you into complacency — you will need a steady stream of good information to do well in forex. Bookmark this page and visit our website for updated tips and strategies.

Frequently Asked Questions

Q

Is it legal to trade forex in the Bahamas?

A

Yes, it is legal to trade forex in the Bahamas.

Q

Is it safe to trade forex in the Bahamas?

A

Yes, the Bahamas is a well-regulated forex environment, making it safe to trade forex in the Bahamas as long as you use a reputable forex broker.

Q

Where can I find a reputable forex broker in the Bahamas?

A

You can find a reputable forex broker in the Bahamas by consulting the list above.

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