The battle for Hong Kong’s political status is also a battle for its economic status. The city’s financial authorities are playing down tensions between itself, Washington and Beijing, though investors are worried regarding possible capital outflows. It becomes increasingly difficult to justify the HKD/USD peg if Hong Kong begins to bleed its economic center of white-collar expats. Former US Secretary of State Mike Pompeo has publicly questioned Hong Kong’s special trading status with the United States.
The retail forex market would suffer a lot if Hong Kong lost its economic status to the United States, but that hasn’t stopped forex trading yet. The city maintains its position as the world’s 4th largest foreign exchange market and the world’s largest renminbi foreign exchange market. The war of words and protests continues, but there are still plenty of opportunities in the Hong Kong forex market.
Best Online Forex Brokers in Hong Kong
Everyone wants to do business in Hong Kong, so you won’t be short of forex brokers to choose from. Choose wisely.
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Minimum account
AUD$200 or equivalent
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eToro USA LLC; Investments are subject to market risk, including possible loss of principal.
Get started with Forex in Hong Kong
Hong Kong maintains minimum financial standards and requirements for its brokers through the Securities and Futures Commission (SFC). Consider this and other important factors as you go through the following list.
- Move online. A strong internet connection means a strong connection to the forex market. A poor connection means you may miss investment opportunities that rarely come along.
- Choose a regulated broker. If you choose a forex broker in the United States, make sure they are regulated by the SFC. Offshore brokers should be regulated by a well-known international financial authority. Proper regulation gives you a shield once morest broker fraud.
- Open a forex account. Consider the amount of leverage you can take, the customer service and terms of service your broker provides on your account before committing.
- Finance yourself. You should be able to fund your investment account using fintech, debit card, check, or the bank account you connected in the tip above.
- Get a trading platform. Your broker may have their own trading platform. You can also choose an industry standard platform. Whatever you choose, make sure you don’t add latency to your chain.
- Swap. It is always recommended to test your investment channel with a demo account. After that, you can start trading forex with more confidence.
Forex Trading Strategies in Hong Kong
Now that you have checked your setup for security, you can move on to investment plans which provide a framework for a trading plan.
Negotiation in small groups: If you are good at identifying the end of trends, you can be a good breakout trader. Breakouts occur when trends have ended and a price moves away from a range it previously occupied.
Return to mean: If a price cannot break out of a range, it usually reverts to its mean. This is also known as the “new test”. Investors looking for a return to average trade to profit from the difference between the current price and the average price over a set period of time.
Retracement : A retracement is a pullback that temporarily reverses a directional trend. It usually doesn’t last very long but offers a quick and substantial profit opportunity.
Carry trading : If you hold a currency overnight or longer, you are rewarded with that currency’s interest rate. Carry traders take advantage of exchange rate differences, selling a currency with a higher rate to buy a currency with a lower rate.
Example of Forex trading in Hong Kong
Imagine that HKD/USD is trading at 0.1310/0.1330. This price seems low. You think the price will go up, so you buy. The margin rate of this currency pair is 2.78%. This entitles you to buy HK$100,000 with $366.96 in your brokerage account.
The new HKD/USD price following 4 hours is 0.1370/0.1390. If you exit the trade at this point, your profit is (HK$100,000 x 0.1370) – (HK$100,000 x 0.1330), or $400, on the 40 point move.
Make Money with Forex in Hong Kong
Maximize your profits with these daily strategies following choosing your investment plan.
- Shorting a market: Many investors assume that you only make money when prices rise, but shorting a currency market allows you to take advantage of falling prices.
- Contracts for difference (CFD): CFD trading relieves you of responsibility for ownership, but you still benefit from the price movements of a currency pair. You can also trade high amounts of leverage using CFDs – usually higher than with traditional forex.
- Binary Options: Binary options provide a yes or no result. You can only win or lose a fixed amount because the value of the option does not directly track the price of the currency.
Political unrest and economic opportunity
The Hong Kong dollar is the 8th most traded currency in forex. It is also an important link between the huge Chinese and American economies. If its status were to be seriously challenged, all of these markets would likely be affected. This volatility is exactly what prepared investors are looking for.
With the right flow of information and appropriate strategies, you have the opportunity to take advantage of price irregularities between the Hong Kong dollar and other global currencies. Bookmark this website and check back often for the latest strategies and news in this essential economic and political development.
Q
Is forex trading in Hong Kong legal?
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Yes, forex trading in Hong Kong is legal.
Q
Is forex trading in Hong Kong regulated?
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Forex is regulated in Hong Kong by the Securities and Futures Commission (SFC).
Q
Where can I find forex traders in Hong Kong?
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You can find forex brokers in Hong Kong by looking at the list above.
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