According to the World Bank, the Solomon Islands is not considered an easy place to do business. The scattered geography includes some incredibly scenic islands but creates huge logistical challenges for foreign industry. Land tenure issues play a part in the high costs of energy and communications, and the government has committed to a constrained tax policy that limits currency movement.
Despite the challenges, those living in the Solomon Islands can still participate in the active forex market. The government can’t do much to stop foreign brokers from offering services, which is a good or bad thing depending on the broker.
If you plan to trade forex from here, make sure that you are willing to put in the time to secure the required facilities and create a strong trading plan.
- Get Started with Forex in the Solomon Islands
- Solomon Islands Forex Trading Strategies
- Forex Trading Example in the Solomon Islands
- Making Money with Forex in the Solomon Islands
- Best Online Forex Brokers in the Solomon Islands
- Forex Terminology
- Trade Forex from the Solomon Islands
Get Started with Forex in the Solomon Islands
Trading forex can now be done from virtually anywhere you can get a stable internet connection. Follow these tips to set yourself up to trade forex:
- Fast Internet. The Solomon Islands is not known for its blazing Internet speeds. Islands in general are known for spotty connections, so be sure you have a solid provider before you initiate any forex trades. .
- Select a regulated online broker. You will find various foreign brokers that are willing to do business with traders in the Solomon Islands. Some of them are regulated, but some are not. It’s good practice to stay away from any broker that is not regulated by a well-known financial regulatory agency.
- Open an account. Open a trading account at the broker you decided to use. Some brokers offer several account types, so choose the best for you. .
- Fund your account. You can usually fund your trading account with a bank wire transfer. Even if your bank does not allow efficient account funding, you can usually still get it done through an eWallet account or your debit card.
- Lag-free trading platform. The trading platform you pick should be efficient, intuitive, fully-functional and supported by your chosen broker. You want to avoid input errors, and you don’t want to add any lag-related delays to your trade execution times. .
- Your 1st trade. Now that you are properly set up to trade forex online, you can begin to trade in the forex market from the Solomon Islands.
Solomon Islands Forex Trading Strategies
A good trading setup can make you money, but educating yourself on how to trade forex means finding strategies that suit your personality and that you can use over and over again. Start with the blueprint before you try to drill down into specific tactics.
The Day Trader
Are you someone who prefers to trade fast and take quick profits? If so, then you may want to focus on day trading. As wild as it seems on the surface, the day trader is actually one of the most disciplined types of trader. Because the decision making process needs to take place quickly, success as a day trader depends on preparation.
Working from the Solomon Islands as a day trader may be difficult if you can’t find a solid internet connection. You will need enough bandwidth to allow you to operate efficiently when you have all of your required charts, news services, websites and your trading platform open.
The Swing Trader
Swing trading may work better for someone without a high-grade internet connection. Swing traders may hold a trade for days or even weeks at a time, so you don’t have to have lightning fast reflexes.
Swing trading requires excellent decision making, a knack for following trends and knowing how to determine when trends are about to correct or reverse entirely. Swing traders typically know how to read momentum technical indicators very well and how they can be used to signal market reversals.
The Position Trader
Position or trend traders are generally patient and often focus on long term valuation analysis. Although many trend traders use technical analysis, they might also look for situations when a currency’s market value against another currency is straying away from its actual value in terms of its purchasing power.
You may not need speed, but you need to have the right market view to profit from it. Over the months or years that they may hold a trade, position traders need to have confidence that their analysis was correct. A wrong marketcall can mean a sustained and substantial loss, so discipline and advance planning is required to cut losing positions when appropriate.
Forex Trading Example in the Solomon Islands
The currency used in the Solomon Islands is the Solomon Islands dollar (SBD) that has the code SI$ to distinguish it from other dollar currencies. A current quote for the USD/SBD exchange rate is 8.1777/8.1787.
If you think the SBD will fall against the USD, you may want to buy $100,000 and sell 817,870 SBD at 8.1787. If your broker offers a leverage ratio of 30:1, then that means you can control that position with an initial margin deposit of $3,333.33 in your trading account.
After 11 hours, the USD/SBD exchange rate moves up to 8.1797/8.1807 and you close out your trade for 10 pips profit at 8.1797. Your realized gain is ($100,000 x 0.00100) or SI$100.
If the market instead stayed stable, and you decided to close the position out at the bid side of 8.1777 for a loss of 10 pips, you would have lost SI$100.
Making Money with Forex in the Solomon Islands
Once you have chosen an overall trading strategy type, you can begin to choose the specific tactics you will use and incorporate them into your trading plan. Here are some common terms that many traders use:
- Going short. When a trader expects a currency pair to fall in value, they may sell the base currency and buy the counter currency. That is called “going short” the currency pair.
- CFDs. Traders can trade contracts for differences (CFDs) that have a currency pair as the underlying asset as a proxy for trading the currency pair itself. These derivative contracts are generally cash settled.
- Binary options. Binary options are an exotic option type that gives the holder a fixed payout in return for an up front premium if a specific market scenario occurs either during its lifetime or at expiration.
Best Online Forex Brokers in the Solomon Islands
There are plenty of international online forex brokers that will accept residents of the Solomon Islands as clients. Be very careful to avoid using any online broker that lacks oversight from a reputable financial regulatory authority.
Billing itself as the world’s 1st eco-friendly broker, CedarFX makes it easy to trade and give back to the planet. You can choose a 0% Commission Account or an Eco Account — or open multiple accounts to meet all your needs.
CedarFX offers access to a wide range of tradable securities, including stocks, futures, major and exotic forex pairs, cryptocurrencies and more. Though CedarFX could introduce a few additional educational resources, the broker remains a unique option for traders invested in giving back.
- Forex investors
- Investors interested in 0% commission or eco conscious trading
- Investors looking for 24/7 customer service
- Allows users to offset their carbon footprint
- 0% commission investing
- Offers demo account access
- 24/7 customer service available through live chat
- Eco Account Option (10 trees planted for each lot traded)
- Fast deposits/withdrawls with Bitcoin
- Limited number of educational resources for new investors
IG is a comprehensive forex broker that offers full access to the currency market and support for over 80 currency pairs. The broker only offers forex trading to its U.S.-based customers, the brokerage does it spectacularly well. Novice traders will love IG’s intuitive mobile and desktop platforms, while advanced traders will revel in the platform’s selection of indicators and charting tools. Though IG could work on its customer service and fees, the broker is an asset to new forex traders and those who prefer a more streamlined interface.
- New forex traders who are still learning the ropes
- Traders who prefer a simple, clean interface
- Forex traders who trade primarily on a tablet
- Easy-to-navigate platform is easy for beginners to master
- Mobile and tablet platforms offer full functionality of the desktop version
- Margin rates are easy to understand and affordable
- Access to over 80 currency pairs
- U.S. traders can currently only trade forex
- Customer service options are lacking
- No 2-factor authentication on mobile
FOREX.com is a one-stop shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker.
- MetaTrader 4 users
- Beginner forex traders
- Active forex traders
- Impressive, easy-to-navigate platform
- Wide range of education and research tools
- Access to over 80 currencies to buy and sell
- Leverage available up to 50:1
- Cannot buy and sell other securities (like stocks and bonds)
Below are some of the most commonly used forex terms that you should get to know before you start trading.
- Pip: the smallest exchange rate movement in a currency pair. Usually represents a move of 0.0001 in the exchange rate.
- Lot size: a standardized trading amount. Usually 100,000 base currency units at online forex brokers.
- Orders: commands given to your broker to execute transactions on your behalf in the market.
- Calls: contracts that give the holders the right, but not the obligation, to purchase an asset at a specific price at or before some specified point in the future. Forex options are always both calls and puts since their underlying asset is an exchange of currencies.
Trade Forex from the Solomon Islands
The Solomon Islands may not provide ideal conditions for trading currencies. The government does very little to make the concept inviting and the required stable internet connection may not be available in your area.
However, those who can access the internet can open a trading account with an online forex broker to trade currencies through while enjoying the incredibly scenic islands of this beautiful country. Take your time to educate yourself about how to trade and to find the right tools and a good broker to trade with.
You might also want to pick a trading style that does not require the fastest internet, if you find internet speeds in your area too slow. Having the best information will also give you an advantage over other traders. Bookmark our website to connect yourself to the latest financial market information.
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
- Powerful, purpose-built currency trading platforms
- 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.