Forex Trading in Peru • Forex Strategies • Benzinga


Like most South American countries, the world of forex trading is a relatively new sphere of financial market speculation for Peruvian residents and travelers. However, as more and more forex brokers are beginning to offer services to Peruvians, it is now easier to get involved in retail forex trading.

Have you ever wanted to trade forex in Peru? Our comprehensive guide to brokers, trading strategies and opening your first account will make your job easier.

Start with Forex in Peru

Before you can start trading forex, you need to open an account with a broker that provides services to traders in Peru. To start your search, make sure you have a stable internet connection and that your connection is private. Investing from a private and secure internet connection not only ensures that you have access to the most up-to-date price information, it also helps keep your personal and banking information out of the reach of criminals.

Once you are sure your data connection is private, start comparing brokers. There are a number of international forex brokers offering trading capabilities to traders in Peru. Some of the features you may want to consider when comparing brokers include:

  • Trading, Margin and Account Maintenance Fees
  • Currency Availability
  • Customer support in Spanish, if needed
  • Supported trading platforms
  • Supported deposit methods
  • Local and international supervision and regulation

After choosing a broker you would like to work with, open an account using your broker’s website. You may also need to download a third-party trading platform depending on the broker you choose.

Once you’ve opened your brokerage account, it’s time to add your trading funds. You can add trading funds using a variety of methods, including:

  • Direct bank transfers
  • Transfers from electronic wallets
  • Debit card funds

It may take a few days for your trading funds to appear in your account. Once they do, you can officially place your first forex trade.

Peru Forex Trading Strategies

The base currency of Peru is the Peruvian Sol (PEN). Sol is a particularly volatile currency, which makes it more suitable for short to medium term trading with technical analysis (although it is also possible to use fundamental analysis). Technical analysis is a form of market analysis that uses past chart patterns and exchange rate data to predict how the value of a currency pair will change in the future.

There are profitable technical analysis strategies that you can use to make money by trading the sol or another currency. Let’s look at some of the most common technical analysis strategies. While these patterns are not foolproof guarantees that you will make money trading, they can provide you with an excellent starting point for formulating your own unique trading strategy.

Shooting star

The shooting star formation is a unique candlestick pattern that indicates a likely downtrend. When the price is pushed higher and immediately rejected, the candlestick will form a high shadow with a small body. The formation of shooting stars usually indicates that a price is going to fall, which is a signal to sell.

Breakout strategy

The breakout strategy is another simple technical analysis strategy that you can use for beginner trading in the short to medium term. First, establish a resistance range for the currency you are trading. When a candlestick “breaks out” of this range, a buy signal is triggered, as the currency moves above the resistance level.

Example of Forex trading in Peru

Forex traders make money by taking advantage of the fluctuating values ​​of different currency pairs. Let’s take a look at an example of how forex trading works.

Imagine that Pedro is a trader living in Peru who thinks that the value of his native Peruvian soles will soon fall against the value of the euro. He deposits S/5,000 in his brokerage account and his broker offers him 10:1 leverage when trading. The value of 1 PEN is currently equal to EUR 0.2400, which means that Pedro ends up with a controlled position of €1,183.22.

Soon, the value of the Euro begins to rise against the ground. When 1 PEN equals 0.2355 EUR, Pedro decides to take profit by closing his position. Once the trade was completed, Pedro’s controlled position of €1,183.22 became S/5,024.28, Pedro profited approximately S/24.28 on this trade.

Make Money with Forex in Peru

Forex trading is completely legal in Peru and there are no legal limitations on the amount of profit you can make from your trading. Although you are not guaranteed to make a profit from forex trading, it is not against the law. However, you are responsible for documenting the income you earn from trading and declaring it to the Peruvian tax authorities, in accordance with Peruvian income tax law.

The Peruvian government has taken measures since 2016 to limit currency trading in order to combat the financing of terrorist groups and money laundering. The new regulatory system called “Money Laundering and Terrorist Financing Prevention System” requires every broker operating in Peru to register with the Financial Intelligence Unit of the Supervision of Banks, Insurance and Pensions from Peru. Under the new law, traders in Peru must submit identification documents to their broker before making a trade worth between USD 200 and USD 5,000.

For trades over $5,000, you must sign an affidavit with your broker stating that your identification documents are correct and that you do not plan to use the funds for any illegal purpose. The new law also places limits on “politically exposed persons,” which include politicians, heads of international corporations and high-level international executives. Your broker must also record your transactions as “suspicious transactions” if you are a non-resident of Peru engaged in currency trading.

Best Online Forex Brokers in Peru

There is a growing number of international forex brokers offering services to investors in Peru. Choosing the right broker can make trading much easier and even save you money in fees and account charges. If you’re not sure where you want to open your account, consider some of our top picks below.

Claim exclusive offers

  • CedarFX is not regulated by any major financial agency. The brokerage is owned by Cedar LLC and is based in St. Vincent and the Grenadines.

  • Minimum account

    AUD$200 or equivalent

Forex Terminology

Forex traders have their own language which they use to discuss trades and place orders. Familiarize yourself with some of the most common forex trading terms below to give you an edge when learning about the market.

Seed: A pip is the smallest calculable exchange rate movement in a particular currency pair. In most cases, 1 pip corresponds to a 0.0001 movement in the currency pair’s exchange rate.

Lot size: A lot size is a standardized trading amount. Online forex brokers usually have a lot size of 100,000 base currency units for different currency pairs.

Orders: To buy or sell a currency pair, you will place an order through your broker. There are many order types and you can use a combination of order types to limit losses and automatically take profits.

Margin calls: If you use leverage to trade forex, you need to be aware of margin calls. A margin call is a notice from your broker asking you to deposit more trading funds into your account if your trading positions require more margin for you to continue holding them.

Follow the evolution of the Forex world

Money laundering and the financing of illegal activities have long been of concern to Peruvian lawmakers. In 2015, the Peruvian Supervision of Banks, Insurance and Pensions revealed that more than 3,000 suspicious transactions have taken place since 2010 worth more than $8 billion. The majority of these illegal funds have been diverted to illegal mining operations and drug trafficking.

Although forex trading is legal in Peru, be sure to keep an eye on changing laws and your positions. Never risk more money than you are prepared to lose – profits are not guaranteed.

questions and answers

Q

Is Forex trading legal in Peru?

Q

Is Forex trading in Peru safe?

A

Trading in Peru is safe if you use an honest broker. Due to a lack of regulation, some people have lost money trading Forex with unscrupulous brokers.

Q

How to find a credible Forex broker in Peru?

A

You can find a credible Forex broker in Perfu using the list above.


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