Forex Trading in the Dominican Republic

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Contributor, Benzinga
November 22, 2022

Free trade agreements with major economies and status as a top tourist destination in the Caribbean bolster the Dominican Republic’s foreign exchange activities. The Monetary and Financial Bureau made up of the Superintendent of Banks, the Monetary Board and the Central Bank regulates the local forex market. 

Some experts believe the bureaucracy of a financial trifecta is too complicated for efficient regulation, and the relatively high economic corruption index of the Dominican Republic would seem to agree.

Regardless of the risks inherent in trading currency here, the retail forex market remains available to individuals to trade currency pairs in. The relatively stable Dominican peso and the growing industries of construction, agriculture and tourism have created an expanding middle class that may wish to speculate in the global currency market. 

Unregulated brokers reach out to citizens of the Dominican Republic to gain business outside of U.S. regulation, which should prompt a level of added due diligence for sophisticated traders. 

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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Dominican Republic Currency

Get Started with Forex in the Dominican Republic 

If you want to trade forex safely, you will need a solid digital financial infrastructure. We share tips on how you can build that below.

  1. Internet. The more developed parts of the Dominican Republic may offer the strong internet structure that you need to trade efficiently. You must have a good connection in order to move on opportunities in real-time as they are presented.
  2. Broker. Not all forex brokers are cut the same. It’s essential to choose a broker that is regulated by a well-known financial authority.
  3. Account. This is when you will ID yourself and connect your bank account. Take a hard look at how your chosen broker protects your funds before trusting it with a deposit. 
  4. Funding source. Fund your brokerage account using your bank account or another financial vehicle such as a debit card, credit card or fintech account.
  5. Trading platform. Make sure that your trading platform allows you to initiate timely but accurate trades. Success in forex depends on staying away from input errors.
  6. Investing. You may now begin safely investing in the forex market from the Dominican Republic.

Dominican Republic Forex Trading Strategies

You’ll need a plan before you move into the forex market. These are just a few of the broad strategies that you can implement as a top-level map for your daily movements.

Exchange Rate Action

If you have a fast internet connection with no latency, you may be able to compete against other day traders in the price action strategy. Price action relies on being able to follow and react to short-term exchange rate movements over the course of minutes or seconds. 

You may also use automated trading tools to increase your trading frequency and reduce your input errors. Price action traders look for small profits and short-term trades with the goal of generating profit on a daily basis.

Swing Trading 

Successful swing trading generally involves watching momentum indicators that signal when a market reversal is likely. You should also be willing to hold trades for the appropriate amount of time that allows it to develop, which could be hours, days or even weeks. 

This time frame means that swing traders often trade at a lower frequency than price action traders and day traders. They may have a number of open positions at the same time, however.

Position Trading

Position traders are willing to stay in the market until the trend they are following concludes. This may take a long time. Over this period, however, the fundamentals of a currency tend to weigh much more into its relative value than any individual piece of information during a news cycle.

Forex Trading Example in the Dominican Republic 

Imagine that as you research currency pairs, you believe the current JPY/DOP exchange rate — 0.5400/0.5405 — is too low. You want to purchase ¥80,000 against the Dominican peso, and your broker provides you with leverage of 100 to 1. That leverage ratio means you need only the equivalent of ¥800 in your trading account to control the full ¥80,000 trade you wish to make.

After 8 hours, the JPY/DOP exchange rate moves up. The currency pair is now trading at 0.5500/0.5505. This is a move of 45 pips (0.5500 - 0.5405), so your profit is (¥80,000*0.0045) or RD$360.  

Make Money with Forex in the Dominican Republic

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Dominican Republic Shore

The financial vehicles you use make all the difference in your success rate. 

  • Carry trading. Carry trading attempts to profit both from exchange rate movement and from the difference in the interest rates of the two currencies involved. This strategy often requires you to hold a position for a significant amount of time. 
  • Binary options. Binary options are meant to be a simple speculative investment — a yes/no choice that rewards the correct answer. Make sure you do business only with regulated binary option brokers.
  • Shorting. If you want to sell a currency that you expect to weaken in future against another currency, you can short that currency pair and profit from its fall later on.

Best Online Forex Brokers in South Africa

Choose the forex broker you do business with wisely. Remember that the Dominican Republic does not have the strongest regulatory structure, so it is generally best to choose a well-regulated foreign broker.

  • securely through Plus500's website
    securely through Plus500's website
    Best For:
    Mobile Users
    Rating:
    Read Review
  • 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 AvaTrade's website
    securely through AvaTrade's website
    Best For:
    Non US Forex Trading
    Rating:
    Read Review
  • securely through FxGlory's website
    securely through FxGlory's website
    Best For:
    Fixed Spreads
    Rating:
    Read Review
  • securely through IG Markets's website
    securely through IG Markets's website
    Best For:
    Forex Execution
    Rating:
    Read Review

    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and 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 HYCM Capital Markets's website
    securely through HYCM Capital Markets's website
    Best For:
    Forex Trading
    Rating:
    Read Review

Forex Terminology

Forex has its own language. Here are some of the basic terms:

  • Pip: the smallest exchange rate movement for a particular currency pair
  • Lot size: a standardized trading amount
  • Orders: instruction given to your broker to execute trades
  • Calls: a contract that gives the holder the right but not the obligation to buy a particular currency pair at a specified exchange rate at some point in the future 

Trade Forex in the Dominican Republic

It goes without saying that you must research the companies you are doing business with in the Dominican Republic. If you take the time to do this, the Dominican Republic can be a decent place to trade forex. 

The currency is relatively stable versus the US dollar, and the country itself is experiencing growth in its infrastructure. With a good internet connection and the right online broker, you have as good a chance for trading profitably from here as from anywhere.

Winning in the forex market is also about having the best information to inform your strategies. Here, you can get both. Bookmark us for the latest happenings in the market and how you can profit.

Q

Is it legal to trade Forex in the Dominican Republic?

A

Yes, it is legal to trade Forex in the Dominican Republic?.

Q

Is it safe to trade Forex in the Dominican Republic?

A

As long as you use a qualified broker, it can be safe to trade Forex in the Dominican Republic.

Q

How can I find reputable Forex brokers in the Dominican Republic?

A

You can find reputable Forex brokers in the Dominican Republic by consulting the list above.

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