The foreign exchange market is also known as forex and FX and it’s the largest market in the world with billions of dollars’ worth of transactions taking place every day. Because of the international nature of the market, it is open twenty-four hours a day although it closes at the weekend and just as one country shuts for the night others.
Foreign exchange traders make the most of the small fluctuations in the value of currencies against one another. The values of currencies are compared to one another, and traders convert funds from one currency to another depending on which are gaining in value.
Almost anything can have an impact on the value of a country’s currency and traders can speculate as to the expected value of any given currency around the world. While some forex transactions are undertaken by individuals or organisations that need alternative currencies, most forex trades are made to capitalise on these changes in value.
Forex trading in Bangladesh
The advent of the digital age has changed the way international banking works and one of the major differences has been the ability of individuals to engage in trading online. Because of the nature of forex trading, it is a popular choice among those that want to earn some additional money online and the international nature of the market means it has global appeal.
Some countries restrict the degree to which individuals can engage in forex trading, and there are some countries where forex trading is more restricted than others, including:
In these countries, the market is heavily regulated and there are more restrictions on trading with high fees and fines for non-compliance. However, other regions have a more relaxed attitude to the practice, including Bangladesh.
There are some restrictions, however, so anyone that wants to open a forex trading account in Bangladesh will just need:
- Government identification documents
- A local bank account with statements
- Proof of the trader’s earnings (such as a work permit, tax return, or employment certificate)
- Passport photos
The Bangladeshi Central Bank controls the country’s Foreign Exchange Reserves, comprising shares, gold, and foreign currencies. The Bangladeshi Bank monitors all the forex transactions taking place in the country, and only the banks and dealers that have been authorised can make forex transactions.
Trading forex in Bangladesh
For dealers authorised to trade in foreign currencies, the central bank limits the transactions that can be conducted. The minimum sum that the Bangladeshi Bank will sell is $50,000, although money changers are allowed to buy and sell currency to and from tourists.
Other institutions are allowed to accept foreign currencies, including shops in tourist areas and hotels, but they must adhere to the limits imposed by the banks. They must then sell on any foreign currency to an authorised dealer.
Individuals that want to engage in forex trading in Bangladesh should research their options thoroughly and make sure that they use a broker that is licensed and offers an online platform that is easy to use. Traders can check whether a broker is authorised to conduct currency trading as this will indicate that a broker is a reliable option.
Beyond this, each broker will have their own terms and conditions, and potential clients can ask for details of their policies such as complaints procedures, risk management policies, and details of the specific services they offer.
For help choosing a broker, many offer demo accounts to allow investors to test out the software and assess whether it’s suitable for their needs. Demo accounts showcase the features on offer, allowing traders to track virtual investments without risking their own cash.
This is an ideal way to get used to the process of forex trading and learn how to use an online account to manage investments. There are quotes, charts, and indicators available to show how a virtual account would have performed, allowing potential traders to test out their settings and see the results of their research before committing any funds to their account.
The future of trading forex in Bangladesh
The laws governing the forex market include the Foreign Exchange Regulation Act of 1947 which allows licensed brokers to conduct forex trading. Individuals that want to trade on the forex market need to use one of the officially licensed brokers that trade internationally on behalf of their clients.
The Bangladeshi government has stated a desire to encourage foreign direct investments and part of that might involve re-evaluating the forex regulations to bring them up to date. The existing legislation is due for modernisation and traders are hoping that the country will change the legislation to allow easier access to forex trading.