Forex Trading in Jersey

The Bailiwick of Jersey (as it is officially called), a small island in the English Channel near the coast of Normandy, is one of the most prosperous countries in Europe. Jersey, a Crown dependency, is afforded the same benefits and protections of a British territory including the use of the pound sterling (GBP) as official currency — on the island they will use their own currency, the Jersey pound, which is exchanged at par with the pound sterling. However, it is a self-governing country with control over its own legal, judicial, and financial systems, and Jersey is not a part of the EU.

The cornerstone of the Jersey economy is its financial services industry. By leveraging its relationship with the U.K., Jersey offers a decent base of operations for forex traders who can have confidence in its strong official currency and British territory status.

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Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Get Started with Forex in Jersey

The technology available to forex traders today makes it easy to participate in this global financial market. However, before making an initial trade, a forex trader should be confident that they have the right elements in place to begin trading. 

1. Connect to the web: Having a reliable and fast internet connection is a must for optimized trading. As a highly developed nation, Jersey’s internet capabilities are considered top-notch. Therefore, if you plan on trading the GBP while in Jersey, finding a suitable internet connection should be relatively easy. 
2. Get a fully regulated broker: To place a forex trade with a broker based in Jersey, the broker must be regulated by the Jersey Financial Services Committee. Most international online forex brokers will also accept clients from Jersey, so make sure they are regulated by their local authorities before opening an account with them. 
3. Fund your account: There are typically various ways to fund your forex trading account. Bank wire transfers, debit cards, and ewallet transfers are acceptable ways for most brokers to receive your initial margin deposit.
4. Choose your trading platform: There are numerous trading platforms that can provide you with access to the forex market if they are supported by your chosen broker. Ensure your platform provides access through any devices you plan on using, including your smartphone, computer, and tablet.
5. Make your first trade: Once you have completed the steps outlined above, you can begin making forex trades in your trading account.

Jersey Forex Trading Strategies

There are several types of trading strategies that a trader can use to potentially make profits in the forex market, although be aware that you can also lose all your funds regardless of your strategy. To help you become more successful as a forex trader, determine which trading strategy best matches your personality. Another technique is to trade in a demo account funded with virtual money first to make sure your chosen strategy is reasonably profitable. 

Day Trading

Day traders focus on making frequent trades that yield quick but often smaller profits. A major strategy of the day trader is to not wait for the market to move against them. Some day traders accept the first profitable opportunity to close a position, while others hold positions as long as the trade remains profitable. This strategy relies on the trader’s ability to capture profits frequently throughout the day. Day traders may only hold a trading position for seconds or for several hours depending on the market. Compared to the positional or swing investor, the frequency of trading is generally higher for day traders. 

Swing Trading

Swing traders typically use momentum technical indicators to find trading opportunities in currency pairs that they can exploit for potential profits. Market swings that traders aim to profit from may happen frequently or over longer periods of time. So, swing traders could hold their positions for a few hours or a few weeks before exiting a trade. Being able to distinguish between a ranging, a correcting and a directional market is helpful for this strategy, although swing traders can profit from all of those market types. While the swing trader does not have the same high trading frequency as the typical day trader, they may take on several trades at one time and hold overnight positions. 

Position Trading

How would a trade embargo on a particular country affect the forex market? How would the election of a particular party or individual manifest itself in the movement of that country’s currency in the market? These are types of political and economic questions that position or trend traders try to anticipate the answer to profit from the movements they can create in the forex market. By understanding how political and economic decisions of countries affect the forex market, this trader can profit from currency moves affected by fundamental events. Unlike the day trader, the position trader is willing to wait for an extended period to act on a trading opportunity. In fact, it’s common for these traders to wait for months or even years before executing or exiting a trade.

Forex Trading Example in Jersey

The UK’s pound sterling (currency code GBP and symbol £) is one of the most actively traded currencies in the forex market. The current exchange rate quote for GBP/USD is 1.3000/1.3005. You are ready to enter an order with your online broker to buy a micro lot of £1,000 versus the U.S. dollar at 1.3005. To make that trade using a leverage ratio of 30 to 1, you will need to have at least £33.33 or $43.35 deposited in your margin account. 

After 4 hours, the GBP/USD exchange rate quote at your broker is 1.3200/1.3205, so you decide to sell your position at 1.3200. This results in a 295 pip gain that means your total profit on the trade was (£1,000 x 0.0295) or $29.50.

Making Money with Forex in Jersey

Travel Feeder

Once you have familiarized yourself with the basics of forex trading, you can begin to learn other strategies and about trading other forex market derivatives: 

• Going short: Selling a currency pair. In the forex market, one currency is sold against another, so when going short the pound sterling against the dollar, the GBP base currency would be sold, while the USD counter currency would be bought. When going short, the difference between the market sale exchange rate and the buy-back exchange rate times the amount traded in GBP equals the trader’s gross profit in USD. 
• CFDs: The short way of saying “contracts for difference,” which allows a trader to trade contracts on a variety of underlying assets without actually taking positions in those assets.
• Binary options: Exotic derivatives where the holder pays a fixed premium to get a fixed payout if a specific market condition is met at or before expiration. 

Compare Online Forex Brokers in Jersey

Choose between a number of reputable forex brokers currently licensed by the Jersey Financial Services Commission and/or their local regulatory agency.

Forex Terminology

If you’re going to trade forex, you should learn to understand the market’s jargon.

• Pip: Meaning “percentage in point,” pip is the smallest exchange rate movement for a particular currency pair. A pip is equal to a 0.0001 move in most exchange rates.
• Lot size: A standardized trading amount. The standard lot size is 100,000 base currency units at most online brokers. 
• Orders: Instructions you give to your broker to execute trades on your behalf. 
• Calls: Contracts that provide their holders with the right — not the obligation — to purchase an asset at a given price (strike price) within or at the end of a predetermined time frame. Currency options are both calls and puts since they are based on an exchange of currencies. 

The Original Jersey Shore

The Bailiwick of Jersey is an international financial services hub that is actively looking to grow. Forex traders can operate from Jersey using local or international online brokers, although they should make sure that any broker they decide to use is duly regulated in their local jurisdiction by a reputable agency. 

If you are based in Jersey, bookmark this page and this website as your primary source for information on forex trading.