Forex trading in Nepal has become easier to get involved in over recent years, which have mostly seen strong economic growth and the increasing availability of fast internet.
Nepalese Forex traders can learn here how to get started trading Forex, the correct approach to learning how to trade and deciding upon a profitable trading strategy for use, and which Forex brokers are most suitable.
Nepal’s Financial Situation
Nepal is home to over 28 million people, and in the middle of a rebuilding phase following the civil war, which saw the last Hindu monarchy replaced with a secular republic in 2008. The Nepalese Constitution was adopted in 2015.
In approximately twenty years, the country is forecast to eradicate poverty, but today about one-third lives just above it in a vulnerable financial condition. One of the fastest-growing economies in the world, it ranks today at 165th in nominal GDP per capita, with a per capita income of just above $1,000 per year.
The Nepalese labor force is the 37th largest in the world, with three-quarters employed in the agricultural sector. Nepal ranks 19th globally in total foreign exchange remittances, which account for as much as 28% of GDP. Many adults are working in foreign countries and sending their earnings back to their families. Foreign exchange is, therefore, something well understood in Nepal.
One encouraging sign for Nepal’s development is the fast spread of internet accessibility. Trading is in the DNA of this landlocked country, which has historically been a key trading post along the ancient Silk Road and a strategic location between China and India.
Is Forex Trading Legal in Nepal?
Forex trading is perfectly legal in Nepal and is supervised by the Securities Board of Nepal (“SEBON”) under the Securities Act 2063, which was published on January 14th, 2007. An amendment regarding directives, bylaws, merchant banker guidelines and associated laws related to the securities market was submitted to parliament in September 2019 with the intent of modernizing the law. Forex trading is completely legal, as long as traders remain compliant with local tax laws, which include a capital gains tax on Forex profits.
How to Start Forex Trading in Nepal?
The challenging fiscal situation of most households makes trading Forex in Nepal more appealing, as it requires relatively low capital and other resources to get started. A computer or mobile device, trading capital, and a stable internet connection are required.
Trading Equipment & Infrastructure
Given the vast availability of affordable mobile devices, most Nepalese Forex traders are likely to opt for mobile trading. Internet access and excellent coverage, per TKP data, over 95% of the population is within range of a mobile tower, allowing traders to manage their portfolios free of outages. Nepal had electricity issues in the past but is on a path towards full energy independence due to renewable energy sources. Over 99% of urban Nepalese have an energy connection, and nearly 20% retrieve it from solar panels.
Forex Brokers & Trading Strategies
While the above items can be compared to the required hardware, the “software” consists of a good Forex broker and a suitable trading strategy. Residents of Nepal have a wide range of choice of well-resourced and regulated Forex brokers as there is nothing stopping them from opening an account almost anywhere.
Some successful traders open accounts at more than one broker, which reduces overall risk and may allow for more effective trading of different asset classes at different brokers. New traders must not rush the selection process and perform proper due diligence once it is understood how to choose a Forex broker.
At the core of each successful Forex trader is at least one trading strategy which works well and suits the trader’s personality, ability, and level of understanding of Forex. There is no universal approach that is suitable for everyone. Learning how to trade Forex requires practice, best accomplished in a demo account and the with an initially small deposit of real funds. Forex trading without an effective strategy is simply gambling with the odds against you.
Finding, building, and fine-tuning profitable trading strategies for beginners is worth a considerable investment of time and effort. Profitable traders also need to cultivate the correct psychological approach to trading as most people find it very difficult to stick to their trading plan when the inevitable tougher trading times arrive. While mastering a strong psychological approach to trading does not guarantee profit, it is very hard to make money without having the psychological strength to keep calm when losing trades happen, as they happen to all traders, even profitable ones.
The Best Forex Brokers in Nepal
There are no international Forex / CFD broker with a physical presence in Nepal, and there are no such brokers anywhere in the world currently accepting deposits in Nepalese Rupees. This means that effectively, anyone in Nepal looking for a broker has a very wide variety of choice, as there are very few Forex / CFD brokers who place any restrictions on accepting a new client resident in Nepal, and there are no unique geographical issues driving choice of best broker.
One issue many Nepalese resident Forex traders may need to consider is that there are some brokers offering a better service to traders depositing relatively small amounts of money, and many Nepalese traders will be in this category. If you are, be assured that it is possible to start trading Forex successfully with a deposit as low as $100, especially if you use a broker that offers trading in nano-lots such as FXTM or Exness.
While it may be tempting to select a broker based upon how close it is to Nepal, most good brokers have customer support open 24 hours every weekday. However, language may be more of an issue, and good language support may be found most easily in Forex brokers which have offices in Mauritius.
It is recommended to proceed carefully in choosing the right Forex / CFD broker for you.
Forex Training in Nepal
At the time of this article, over 128 Forex training courses were advertised in Nepal. While some offers may be genuine, most represent an unnecessary capital drain, and will exist primarily to exploiting new traders. Everything you need to know about trading Forex and CFDs can be acquired completely free of charge on the internet. The money you might spend on a Forex training course will almost certainly be better spent elsewhere. Thanks to demo accounts, and the fact that accounts can now be opened with very small deposits of real money, there are relatively painless ways to learn by doing, too.
Forex training centers or other courses may seem attractive and logical investments, but they are extremely likely to leave you dissatisfied with what you would get in return for your investment.
Best Time to Trade Forex in Nepal
A key factor in Forex trading in any country is the position of that country’s time zone and how it relates to the key Forex trading centers of London and New York.
Nepal is 4 hours and 45 minutes ahead of London on almost every day of the year. As it is well established that intraday trading (day trading) is best done at times of relatively high volatility, you should consider that peak Forex volatility tends to happen from Noon to 4pm London time. This means that the best time to trade Forex in Nepal is in the late afternoons and evenings after work or education, as these times correspond to the period between 4:45pm and 8:45pm at local time in Nepal.
- Forex trading will continue to become more popular in Nepal as GDP grows and disposable incomes rise.
- Forex trading is legal in Nepal and can represent an opportunity to profit if done correctly and responsibly.
- Nepalese residents have a wide choice of Forex / CFD brokers to use but might face account currency issues as deposits in Nepalese Rupees are not accepted. However, it is possible to find brokers allowing deposits in the Indian Rupee, which has a pegged exchange rate to the Nepalese Rupee.
- Forex training services are available in Nepal but are all very likely to be a waste of money.
- Nepal is in a well-positioned time zone for Forex traders, as the peak hours of the Forex market fall in the early evening local time.
Can I trade Forex with $10?
There are Forex brokers which will allow you to start trading with a deposit of $10 or even less. However, unless they offer trading in nano lots, you will only afford a maximum loss of 100 pips before your whole account would be gone.
How do professional traders trade Forex?
Professional traders working for themselves may trade Forex in any way. Professional traders employed by banks and hedge funds tend to trade without any leverage and take more trades than retail Forex traders would be wise to. Usually, they will use a combination of trend following, mean reversion, support and resistance, and market sentiment trading strategies.
Is Forex trading really profitable?
Data suggests that while about 72% of retail Forex traders fail to generate profit, the 28% who are profitable achieve this by using leverage carefully and by utilizing proven, profitable trading strategies in a disciplined way.