Massive Guide to Forex Trading in Dubai (UAE)

Dubai is a major financial center in the Middle East and the United Arab Emirates, offering one of the largest concentrations of forex brokerages locally and internationally. Dubai forex brokers are regulated by the Central Bank of the United Arab Emirates (UAE) with a license issued by the Securities and Commodities Authority (SCA). This ensures financial security from the broker.

Trading currencies in Dubai is easy because you can pick from local and foreign brokers. One of the biggest advantages for residents using a local broker is the guarantee that they are overseen by one of the major regulators in the country.

Are you in Dubai and ready to start forex trading?

Below we give you all the information you need to start whether you’re a novice or a seasoned trader.

How to Start Trading Forex in Dubai

Before you can start trading forex in Dubai, you need to know the trading risks. Not all forex brokerages are the same, so you need to be aware of your needs and how well they are regulated before making a financial commitment. Understanding market analysis and taking advantage of available educational resources on trading forex can help you make informed decisions.

It’s strongly recommended that you practice using free demo accounts before committing funds to a live account on the market to gauge the broker’s service quality.

Continue reading to learn about the three steps you need to follow before trading.

Step One: Know Your Needs

Your needs as a trader will vary depending on your goals and level of experience. If you already have experience with the stock market, then you most likely have an understanding of how to analyze the market and know how to make informed decisions based on information about individual stocks.

Knowing the different platforms and which ones best suit your needs are essential for making lucrative choices. If you are new to trading, it’s best to choose a broker who offers a simple platform with a surplus of educational tools to help you learn. The key to success is choosing a broker that meets your needs.

Step Two: Picking a Forex Broker

Once you have evaluated your needs, it’s time to evaluate some characteristics of the broker before making a decision. Below are the most important characteristics to consider.

Are They Regulated?

Their regulation status is one of the most important considerations when choosing a forex broker wherever you are. They should be strictly regulated by a government agency. If they are foreign-based, the agency could be the U.K’s Financial Conduct Authority (FCA) or Cyprus’ CySEC. If you choose a Dubai-based broker, then the regulator will either be the DFSA or SCA.

A broker who doesn’t adhere to strict regulations could cause you to lose your entire margin deposit or other money when they are unable to hold up their financial obligations.

Are They an ECN or Market Maker?

An ECN forex broker displays the best bid and offer rates available. They fill your order with the best exchange rates and some may charge a commission in addition to the dealer spread. If the broker is a market maker, your order is filled by the broker who takes the other side of the trade at their price.

What is the Leverage?

Leverage is the process of borrowing an amount of money from the broker needed to invest. The amount of leverage can have an impact on your profits and losses. The maximum leverage rates can vary.

What is the Margin?

The margin is the amount of money or deposit required to leverage. Trading with leveraged positions can help you make money on profitable trades, but the risk is substantial.

Do They Use Dealer Spreads?

The difference in the exchange rate at which instruments are bought and sold, known as the bid/offer or dealing spreads, is how they make money. Rather than charging a commission, they widen the dealing spreads. A broker that offers narrow spreads will save you more money if you’re actively trading.

What Trading Platform do They Use?

Many forex brokers offer proprietary platforms, but MetaTrader4 and MetaTrader5 platforms are two of the best in the industry. These platforms use state-of-the-art software with analytical features that help you make the most informed decisions. Use the one that best suits your needs.

Do They Offer a Demo Account?

Demo accounts are free and give you an idea of how efficiently the broker operates. Take advantage of this to practice trading with a live account, especially if you’re a novice trader.

How is Their Customer Service?

You want a broker that offers 24/7 customer service. These services can be offered by telephone, live chat, or e-mail in case there is an issue or you need an answer to a simple question.

Do They Offer Educational Resources?

If you’re a new trader, you want a wide range of educational resources to help you make the best decisions. These resources can include articles, videos, and other tools to guide you through your options.

Step Three: Opening an Account and Trading

After deciding on a broker, you can practice using a demo account or open a live account to start trading. Don’t forget that your experience practicing on a demo account will be different than when you use a live account. Start with small amounts to trade with until you get used to the new platform.

Create a strategy that gives you the confidence to help you navigate the volatility of the forex market. Using a strategy that incorporates money management principles will help you become a profitable trader.

Final Thoughts

Your experience with the forex in Dubai will depend on your level of experience and the type of brokerage you choose for trading. Opening an account with a reputable brokerage that meets your needs as a trader will increase your chances of having a successful experience. If you are a seasoned trader, making a decision should be easy.

Finding a good broker is only part of the journey to success. Your trading strategy and level of preparation to do business on the platform of your choice are the two biggest influences on your chances of being successful.