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Forex Trading in Venezuela • Forex Strategies • Benzinga

The bolívar soberano (VES) was introduced as Venezuela’s national currency in August 2018. Forex trading is now legal in Venezuela, so you may be able to trade this new currency or any of the major and minor currency pairs by opening up a forex trading margin account at an online broker.

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The bolívar soberano (VES) was introduced as Venezuela’s national currency in August 2018. Forex trading is now legal in Venezuela, so you may be able to trade this new currency or any of the major and minor currency pairs by opening up a forex trading margin account at an online broker. 

Learn more about forex trading in Venezuela with Benzinga’s guide.

Get Started with Forex in Venezuela

Named after Simon Bolivar, the hero of Latin American independence, the bolívar soberano is the official national currency of Venezuela. 

Venezuela has experienced harsh economic climates since the 1980s. Due to hyperinflation, Venezuela has replaced its currency multiple times in less than 50 years. 

As of August 2018, the Venezuelan bolivar soberano (VES) has served as the currency in circulation. It was preceded by the bolivar fuerte. The bolivar soberano has denominations of 2, 5, 10, 20, 50, 100, 200, 500, 10,000, 20,000 and 50,000. These banknotes have images of Venezuela’s national parks and indigenous animals depicted on them. 

Banknotes of Venezuelan Bolivar Soberano

The Central Bank of Venezuela was established in 1939. It was enacted by law to ease social, political and economic tensions in Venezuela at the start of WWII. The Central Bank of Venezuela has the sole right to issue Venezuelan currency. 

Oil is Venezuela’s main export. It is the 6th largest member of the Organization of the Petroleum Exporting Countries (OPEC) by oil production. Beyond oil, Venezuela also manufactures and exports industrial products such as steel, aluminum and cement. 

The Venezuelan government has instilled a currency control board to handle forex procedures. The board offers a limited sum of foreign currency to local merchants to help them pay for foreign goods. 

Since the government limits foreign currency to individuals, merchants in Venezuela resort to the black market to get more foreign currency. This has increased the printing of bolivar notes and has caused inflation over the years.    

Here’s a step-by-step guide to help you get started with forex trading in Venezuela.

Step 1: Get a digital device with fast internet connectivity. 

You can use your desktop, laptop, tablet or smartphone to trade forex. The value of the currency pairs listed frequently fluctuate. Having a personal device to constantly track these changes is often essential to successful forex trading. 

Step 2: Find an online forex broker. 

There are various forex brokers available online. Go through each broker’s website, and choose a broker that lets you trade the currency pairs you are interested in.

Be sure to check the footer of each website for information on the broker’s overseeing regulatory bodies. If you can’t find any such information from the U.S. Securities and Exchange Commission (SEC), the UK’s Financial Conduct Authority (FCA) or other reputable regulatory bodies, then the broker can’t be trusted. 

Step 3: Sign-up for an account. 

You can open a new account with the forex broker on their website. Some forex brokers require a minimum deposit amount to open an account. These brokers also offer different kinds of accounts based on initial deposits and trading strategies. Choose the one that’s right for you. 

Step 4: Transfer funds to your account.

Once you’ve signed up for an account, you need to transfer funds to start trading forex. Depending on the broker you’ve chosen, you can choose your accounting currency and fund your account using several options. Generally, these funding options include bank wire transfers, eWallet transfers and debit cards. 

Step 5: Download a forex trading platform.

You may need to download a forex trading platform supported by your broker onto your computer or smartphone. Take the time to customize the look and feel of the platform to help you have the best chance of identifying forex trading opportunities. 

Step 6: Begin your forex trading journey. 

Before you start trading forex, you might want to open a demo account to trade using virtual money. These demo accounts can help you get used to the interface of the forex broker’s platform without risking your money. After you feel confident using the platform and have developed a decent strategy, you can start trading forex using real money.

Forex Trading Strategies from Venezuela

Experienced forex traders rely on several tried-and-true strategies to increase their chances of making a profit and limiting losses. 

These forex trading strategies can include the following:

Swing trading

Swing traders typically operate by using momentum indicators to identify likely market reversal points. This short- to mid-term forex trading strategy can help you also profit from corrections while following an overall trend. 

Range trading

Range trading is a strategy that involves identifying a set of similar highs and similar lows for a specific forex currency pair. You do this by looking at the past performance of a currency pair and then aiming to either buy on a dip to the lows and sell on a rally near the highs or sell on a rally and buy on a dip. 

Scalping

Scalping is a forex trading strategy that involves quickly entering and exiting the market aiming to profit from small exchange rate movements. This very short-term strategy is typically time-consuming and generally requires access to real-time market data to make it work. If you’re not fast enough with your scalping trades, you may miss opportunities or let profits turn into losses. 

Position trading

Position or trend traders generally have a long-term outlook on the overall direction of the exchange rate of a forex currency pair. This method of trading typically requires you to hold positions in forex currency pairs until there is a significant change in their exchange rate. With this strategy, you can look past minor market changes. It can take months or even years before you close out a profitable position, although the gains tend to be higher when you do compared to scalping, for instance. 

Day trading

Day trading is a forex trading strategy that generally requires you to exit all your positions by the end of the day’s trading session. This strategy is most suitable for short-term traders who have the time to regularly monitor the market. Day traders can trade once or twice per day or more, and they have the benefit of avoiding the major market volatility that occurs overnight. 

Forex Trading Example in Venezuela

Venezuelan merchants often need U.S. dollars to pay for imports and the country receives US dollars for its oil exports. That makes the USD/VES an especially interesting currency pair for some Venezuelans.  

The USD/VES pair is currently trading at 241,365.85, so that means it costs 241,365.85 bolivars to buy 1 U.S. dollar. If your broker allows you to trade VES, then you can take a long $100,000 position against the VES if you have sufficient margin in your trading account. 

If the USD/VES exchange rate has risen to 251,365.85 after 3 months, then you can sell your position for a profit of 1,000,000,000 VES. Of course, you could also lose money if the exchange rate declined instead. 

Make Money with Forex in Venezuela

To counter the collapse of the economy, the Central Bank of Venezuela has allowed local banks to open foreign currency trading platforms. Although the weakening of the series of Venezuelan bolivars has been the subject of many economic reforms in the country, it may have benefitted some lucky forex traders. 

It’s not the 1st time that the national currency of Venezuela has faced hyperinflation. The U.S. dollar was worth 7,518.80 bolivars in June 2019. The price of a USD skyrocketed to 292,167.00 by August 2020. You could have potentially earned $97,426.54 with a $100,000 long USD/VES trade using a 1-year buy-and-hold strategy if you could actually get an online broker to allow you to make that trade.

Best Online Forex Brokers in Venezuela

Online brokers let you instantly track the exchange rate of and trade currency pairs in the forex market. You can sign-up for an account on their website and start trading forex within minutes. These brokers may even give you access to financial data such as 52-week highs and lows, exchange rate forecasts and historical levels on a single platform. 

Many forex brokers also help keep you up-to-date with current events and news that shape the world’s economies. They often provide a plethora of educational resources and expert analysis to help you gain an edge in your trading tactics. 

Forex Terminology

Before you begin trading forex, you should be familiar with certain terms and meanings. A grasp of this financial lingo will help you understand the forex market better. 

  • Pip. The smallest unit of movement in an exchange rate. Generally, forex currency pairs are quoted out to the 4th decimal point. 
  • Lot size. A standardized trading amount, usually 100,000 base currency units at online forex brokers. You can also buy and sell smaller lot sizes at many brokers, such as mini and micro lots.
  • Orders. A command given to your broker to execute a transaction either at the market or based on other conditions you specify. To go long a currency pair, you enter an order to buy the base currency and sell the counter currency. To go short a currency pair, you enter an order to sell the base currency and buy the counter currency. 
  • Margin calls. If your account margin is insufficient to continue to hold your outstanding positions, your broker might issue a margin call. Most online forex brokers will instead automatically close out your positions. 

Trade Forex in Venezuela

Most of Venezuela’s income is generated by oil. The extreme hyperinflation rates in Venezuela have created numerous profitable entry and exit points in the USD/VES exchange rate over the last decade. 

You can trade forex in Venezuela to put your capital at risk speculating on exchange rate movements. Start with our recommended broker to start trading forex in Venezuela today.

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AvaTrade Demo Account Review for Practicing Trading Forex

AvaTrade demo account review
  • Trusted Forex Broker Regulated in 5 Jurisdictions With Monthly Trading Volume Exceeding $60 Billion
  • Broad, Deep Product Palette Spanning Forex Options, Digital Currencies, Stocks, Commodities, ETFs, Bonds, Indices
  • Many Options For Automated Trading Including Mirror Trader, Zulu Trade, MQL 5, Signal Trader
  • Choice of Fixed or Floating Spreads and Leverage up to 400:1
  • Market Analysis and Educational Resources From Reputable Independent Providers Like Autochartist, FXInsights, Dow Jones, and Hushtrade
    • Established –2006
    • Domicile –Ireland
    • Regulation –Ireland – Central Bank of Ireland Reference No.:C53877), Australia – ASIC (License No.: 406684), British Virgin Islands – FSC, Japan – FSA (License No.:1574)
    • Restricted Jurisdictions –United States
    • Ownership –Privately Held
    • Segregated –Yes
    • Broker Type-Market Maker
    • Web Security –McAfee Secure
    • Negative Balance Protection Policy –No

AvaTrade demo account review

Avatrade has great depth and breadth in its range of markets. In additional to forex, Avatrade covers all major areas of the capital markets including equities, fixed income, and commodities.   It offers many more instruments than most of its competitors. Avatrade allows you to trade CFDs on 54 forex pairs, 16 commodities, 20 global indices, 21 ETFs, hundreds of individual shares from US, UK, Spain, Germany, France and Italy.

Avatrade is one of the few brokers to offer bitcoin and litecoin trading. It was awarded the Best European Bitcoin CFD Provider title at the 2014 European Bitcoin Awards. Avatrade also offers forex options for 30 pairs. You can also use options to hedge and alter the risk profile of your open forex CFD positions.

Avatrade provides many choices for automated trading including mirror trading, social trading, expert advisors, trading signals from independent providers like MQL5 and its API Library.  Avatrade offers higher leverage than most other brokers with up to 400:1 leverage for floating spread accounts.

AvaTrade Demo account Review – Market Analysis and Education

Avatrade demo account broker provides a lot of live market analysis to support your trading activity. Customers are given access to technical analysis from Autochartist and fundamental analysis from FXInsights, live news from Dow Jones, and audio commentary from Avatrade’s Chief Market Analyst, Naeem Aslam, a frequent contributor to news outlets like CNBC and Bloomberg.

Customers with deposits of at least $500 are given access to Autochartist free of charge. Autochartist’s pattern recognition features can be a very useful tool to help identify trading opportunities.

Avatrade invests heavily in trader education. It provides clients with ebooks, webinars and videos on a variety of topics, as well as, access to the premium forex education service, Hushtrade. Hushtrade arms you with a solid foundation in the fundamentals of forex trading and technical analysis. For advanced traders, Hushtrade also has cutting edge material covering trading strategy, psychology, and insights from professional forex and commodities traders.

AvaTrade Demo account Review – Trading Features

    • CFD’s –Forex, Commodities, indices, ETFs, Stocks, Bonds
    • Currency Pairs –54
    • Leverage –Up to 400:1 for floating spreads, up to 200:1 for fixed spreads
    • Cryptocurrencies –Yes
    • Options –Forex Options
    • Trading Signals –Yes, API Libary and MQL5 available to accounts with $1000 deposit and more
    • Automated Trading –Yes
    • Social Trading –Yes
    • Phone Trading –No

AvaTrade Demo account Review-Trading Platform

  • Platforms –
  • Metatrader 4 (PC, Mac, Browser), Avatrader (PC, Mac, Browser), Avatrader Options (PC, Browser), Mirror Trader, ZuluTrade, Signal Trader, Metatrader 4 Mobile (android, ios), Avatrader Mobile (android, ios)
  • Metatrader –Yes
  • Mac Software –Yes
  • Mobile Trading –Yes

AvaTrade Demo account Review- Account Options

    • Minimum Initial Deposit –$/€/£/AUD 100
    • Base Currencies –USD, EUR, GBP, AUD
    • Minimum Lot Size –1,000
    • Account Types –Silver, Gold, Platinum, Ava Select
    • Payment Options –Credit Cards, Debit Cards, Neteller, PayPal, Skrill, WebMoney, Wire transfer

AvaTrade Demo account Review- Customer Service

    • Online Support –Live chat and email
    • Phone Support –Yes
    • Multi-Lingual Support –Yes
    • Personal Account Manager –Yes, but dedicated account analyst for Ava Select account only

Safety and Security

Avatrade was acquired by Playtech in June 2015 at a sale price of $105 million.  Playtech is a London Stock Exchange listed FTSE 250 gaming software and services provider and the owner of Markets.com.   Playtech intended to integrate these brokers at some point in the future.  With these recent acquisitions and solid financial backing,  However,Playtech decided to walk away from the acquisition after the Bank of Ireland objected to the merger in October 2015.

Avatrade is a reliable and established forex broker officially regulated in 4 jurisdictions.  Overseen by regulators from Ireland, Australia, British Virgin Islands and Japan, Avatrade is subject to stringent compliance requirements, including how it handles client assets, security of client funds and financial reporting.  At present, there is no record of regulatory fines or settlements

Client funds are held in segregated accounts.  Avatrade secures your information and money with 256-bit SSL encryption across the entire website.  It uses McAfee Secure (HackerSafe) to prevent credit card fraud and identity theft.

Our Best Forex Demo Broker Reviews

Best Forex Demo Resources and usefull Links

Trading Forex, Stocks and CFDs carries risk and could result in the loss of your deposit, please trade wisely.

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Should Correlations Drive Your Investment Decisions?

By Ron DeLegge

Tuesday, May 10, 2016 5:57 PM EDT

Do stock market correlations matter?

Statisticians use correlations (or cross-correlation) to measure the relationship between asset classes or investments. The general idea is to better understand the similarity or dissimilarity in how investments perform against each other and to build a portfolio of investments that can benefit.

The CBOE S&P 500 Implied Correlation Index (ChicagoOptions:^KCJ) also known as the “ICI”  is one such statistical measure that uses options to estimate the average correlation among the largest 50 stocks inside the S&P 500 Index. The ICI recently hit 52-week lows indicating ultra low correlations between individual stocks and sectors.

Should investors use correlations between assets to make investment decisions? Before answering that question, let’s give a brief overview of how correlations work.

A correlation of +1.0 means that two investments have a perfect positive correlation. That simply means a correlation of +1.0 or close to it, is something you would expect from investments that perform and behave similarly.

Here’s an example: The historical performance and behavior of Intel (NasdaqGS:INTC) closely resembles the broader technology sector of stocks (NYSEARCA:XLK), which also happens to be Intel’s peer group. Should it be a surprise that Intel’s return pattern is similar to other technology stocks? Not at all, because individual stocks tend to behave similarly to the industry sectors where they reside.

S&P 500 Financial Crisis Correlation to Treasuries

In contrast, a correlation of -1.0 describes two investments with a perfect negative correlation. This means the return path of the two investments move opposite one another.

Here’s an example: The relationship between the S&P 500 Index (NYSEARCA:SPY) and CBOE S&P 500 Volatility Index (ChicagoOptions: ^VIX) could be described as a nearly perfect negative correlation. Why? Because the historical movements of VIX (NYSEARCA:VXX) have been opposite the S&P 500 around 80% of the time.

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The 5 Stocks that will Increase your Cash Flows – Best Forex Demo

While in the heart of the first-quarter earnings season, investors might find it easy to look for profits and surprises to scoop up big gains. But if you pick stocks just because they are making profits, there’s no guarantee that the money is getting channelized to meet their obligations. A profit making company could have cash flow deficiency and that could lead it to filing for bankruptcy.

So for any potential investment over the long term, one must look at a company’s ability to produce cash – the lifeblood of business, the fuel for growth and the cushion amid downturns.

In any business, money flows in and out, but net cash flow indicates how much money the company is actually generating. Having positive cash flows indicates enhanced liquidity, giving the company more means for debt repayment, expenses, dividend payouts, stock buyback and finally reinvestment in business. On the other hand, a negative cash flow implies that a company’s liquid assets are decreasing, resulting in reduced flexibility to support these moves. So putting your hard earned money in stocks with less cash does not make any sense at all.

However, positive cash flows alone are not sufficient to predict a company’s future growth. If cash flow is increasing over time, it implies management’s efficiency in regulating its cash movements, reaping more money from its business, depending less on outside financing and finally its improving fundamentals.

So for stock picks don’t look at profits only. Make sure to look for stocks with dependable and increasing cash flows.

Screening Parameters:

Let’s look for stocks for which cash flow has been increasing over time. For this, we screen for stocks whose cash flow in the latest reported quarter is at least equal to or greater than the 5-year average cash flow per common share. This points to a positive trend and growing cash over a period of time.

In addition to this, we have added:

Rank 1: No matter whether the market conditions are good or bad, stocks Rank #1 (Strong Buy) have a proven history of outperformance.

Average Broker Rating 1: This indicates that brokers are also highly hopeful about the company’s future performance.

Current Price greater than or equal to $5: This screens out the low priced stocks.

VGM Score of B or better: This score is also of great assistance in nailing down stocks. Importantly, this scoring system helps in picking up the winning stocks in their respective industry categories.

Here are 5 out of 10 stocks that made it through the screen:

Anika Therapeutics Inc.

Emergent BioSolutions, Inc.

John Bean Technologies Corporation 

Norsat International Inc.

Forestar Group Inc. 

You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.

The Research Wizard is a great place to begin. It’s easy to use. Everything is in plain language. And it’s very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

 

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