Forex Trading is one of the sectors that is currently growing the most in Latin America, the interest and popularity of this activity is increasing more and more, expanding even to cryptocurrency trading and bringing to trading the important commodities for South and Central America such as Gold, Coffee, Oil, Cotton. Even local currencies such as the Mexican Peso, Colombian Peso, Chilean Peso, Argentine Peso, and Peruvian Sol are having a presence in currency trading internationally. Little by little, the Latino public is starting to learn and become interested in these alternative products, which have already been emerging in other countries with more developed economies for decades.
With the economic and social crises that have occurred regularly in the region (deeper in some countries than in others) throughout history, as well as the different regulations and restrictions on capital management, people have been looking for new sources of income and investment platforms that allow them to generate stable extra income and achieve some financial freedom. Although it is not so simple, with dedication, persistence and constant updating you can become a successful trader.
There are a wide variety of investment options, the most attractive being the foreign exchange and CFD’s market, which offer a reasonable risk and attractive returns for those who venture into this sector, both for beginners and experienced traders.
The first big step to start trading is to choose the right platform, because it is the one that will give us the necessary and appropriate tools to the needs of each trader, avoiding problems and creating an ideal intermediary for the operations that we want to carry out. It is also important to choose a Forex broker that you can trust, and that has internationally accepted regulations, such as the NFA or Commodities and Futures Trading Commission (United States), Financial Conduct Authority (Great Britain), the Cyprus Stock Exchange Commission, CYSEC or the National Securities Market Commission (Spain), to avoid unpleasant surprises and scammers who take advantage of the good faith of those trying to enter this sector. Likewise, if it is listed on the stock exchange, it is a point in favor for choosing the broker.
Each investor has very particular characteristics and needs, so you should choose the broker that can best satisfy them fully, likewise, the platform that we choose should provide us with the appropriate tools. It may be a confusing topic for some, so we clarify it here:
Broker: The one who offers the service and is the intermediary between the investor and the market.
Platform: Means by which the investor transmits his orders to the broker.
The broker is the one who offers the platform to his clients to enter the financial markets, so knowing the best platforms and brokers that allow us to operate in our country comfortably and profitably is the most important thing.
The best brokers usually have characteristics that we should take into account and analyze before deciding to take the step to hire them. Such as:
Regulation: Being subject to internationally accepted regulations, we can rely enough on the activity of this broker and we have a backup to avoid frauds and scams.
Demo Account: Essential especially for beginners, it allows us to understand, practice and test the platform before making the investment, we can verify the behavior of opening orders, stop losses, closures, graphical analysis, study material, access to spreads and commissions to be charged, among others.
Trading Platforms: A very important tool, it must offer ease of use, reliability, and be intuitive. Web-based and app-based platforms are preferred for connectivity.
Available Currencies: Depending on our needs and interests, we must make sure that the broker can offer us the currency pairs that best suit us. Whether they are: Major Pairs (EUR/USD, USD/JPY, USG/GBP, etc.), Minor Pairs (USD/NZD, USD/TRY) or Exotic Currencies (USD/Real, USD/PLN, USD/MX).
Spreads: The spread is the difference between the purchase and sale price of an underlying asset, we must verify that the spread between the purchase and sale price is as small as possible.
Minimum Deposit: Particularly when starting out, we usually do not have many resources, especially in money. So it is important to check how much flexibility is offered to us and for that the minimum deposit is essential.
Overnight Swaps: It is a commission that is paid on a trading account every night after the daily rollover and, especially when trading CFDs, it must be taken into account when keeping the position open for several days.
With this in mind, let’s take a look at the most used platforms in Latin America. They are the following:
MetaTrader: With two versions (MT4 and MT5) this tool can be downloaded to your computer or mobile phone to perform trading operations. It allows you to analyze markets, execute trades and access the catalog of indicators. It includes interactive charts and allows to launch stop loss, pending, and take profit-type orders.
cTrader: The platform created by Spotware Systems Ltd is ideal for working with NDD (Non-Dealing Desk) type brokers. It is an integral platform with built-in graphic systems that allow different investment strategies to be carried out. It also offers the option of managing several accounts simultaneously, which is very attractive.
ProRealTime: Excellent tool for market analysis, it was created and developed by IT-Finance, and it incorporates more than 100 technical analysis indicators. Integrate the tool ProRealTrend, which offers automatic periodically updated charts.
TradingView: Ideal for social trading, it is made up of an extensive community where you can interact, emulate strategies and create personalized tools, it also offers optimal versatility for beginners, with backtesting, interactive charts and an app compatible with iOS and Android.
MetaStock: Used mostly by those who already spend time dedicating themselves to trading, it is accessed through a paid license, and has technical analysis and trading tools for stocks, bonds, forex and other popular markets, as well as a forecaster and 69 recognizers that work automatically.
Among the brokers with the best reputation in the region we have the following:
XTB: Specializing in the financial products market, it was created in 2002 and has been growing to become one of the leaders in online trading and offering positions in more than 1,500 available markets. Widely popular in Europe, it has been expanding in the Spanish-speaking market steadily, developing its activity in more than 14 countries in Europe, Asia and Latin America, including an office in Santiago de Chile.
It offers spot shares with 0% commissions, has excellent 24/5 Customer Service for Spain and Latin America, and is fully regulated by FCA and CNMV, which supports the trust placed in them. In addition to offering the best investment school in Latin America and free trading signals service, it uses the best trading platforms, including MetaTrader and the exclusive xStation 5.
eToro: This online broker specializes in CFDs, especially in Social Trading and Copytrading, which allows sharing investments with other members of the community on the one hand, and also automatically copies the trades of the best investors on the platform. It is regulated by the FCA in the United Kingdom and the CySEC in Cyprus which assures us of reliable and guaranteed operations. It is one of the most recommended for beginners, due to its simple and intuitive interface, and has a huge amount of assets to trade that includes numerous currency pairs, hundreds of stocks from dozens of different countries, dozens of popular cryptocurrencies such as bitcoin, Ethereum, ripple, etc; indices, exchange-traded funds (ETFs) and numerous other instruments. Includes a demo account that allows us to test unlimited investment strategies.
XM: It has been operating since 2009 with a recognized track record endorsed by more than 1.5 million customers in almost 200 different countries, it is regulated by CySEC, ASIC and IFSC. It offers a wide catalog of investment assets with some of the most competitive spreads on the market (from 1 pip) and some of the most interesting registration and welcome bonuses. It also has a high commitment to customers, having Customer Service in 30 languages, 24 hours, 4 days a week. The execution of orders is one of the fastest (99.35% of them being completed in less than a second), it also offers a Loyalty Program and excellent training resources for traders, free of charge.
FXTM: Also known as “ForexTime” has been operating since 2011 and is regulated by CySEC, FCA, FSC Mauritius, and CMA, enjoying a high reputation. It offers a very competitive commission structure that tends to keep the cost of trading low, with access to more than 57 pairs and crosses of currencies, precious metals, major energies, equity indices, large cryptocurrencies and some individual US stocks, offering these with direct trading through real legal ownership, not just wrapped as CFDs, which makes it quite unique and attractive. It also offers the possibility of opening an ECN-type account or one that operates through “direct processing.” All this makes it one of the highest-rated brokers.
Plus500: This online CFD market maker has been having a remarkable growth, increasing its reliability, it is regulated by FCA and CySEC. It allows you to invest in all kinds of financial instruments, including Forex, stocks, indices or cryptocurrencies. With a very simple trading platform that is friendly and intuitive for beginners but retaining the power and functionality that more veteran traders appreciate, it also offers an unlimited demo account that allows you to try various investment strategies to your liking.
Whatever type of investment we want to make, we have access to really interesting platforms and brokers in Latin America that are worth exploring. At VA Inversiones we also offer a wide range of Financial Education to help you navigate safely in this often confusing world of investment.