Forex Trading in Jordan

Since 2017, the Regulating Dealings with Foreign Stock Exchanges law has created the framework for Jordan’s relationship with the foreign exchange market. Jordan currently imposes unprecedented limitations on forex brokers, requiring a Jordan Securities Commission (JSC) license to mediate or promote any financial mediation service in the country. Penalties for noncompliance are strict, maxing out at 100,000 Jordanian dinars and a year in jail. Keep reading to learn more information about trading forex in Jordan.

For those looking to dive into forex trading in Jordan, it is important to understand the regulatory environment, the local market dynamics and the best practices for trading. This article will provide you with insights and tips on how to navigate the world off forex trading in Jordan effectively.

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Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% to 76% 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. The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account

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Attribution: Leftover Currency

Despite these limitations, Jordan remains a relatively advantageous place to trade in the forex market. For the past 20 years, the Jordanian dinar has been strictly pegged to the USD at a rate of 0.709 JOD = USD$1 without experiencing the weakness of many fixed-rate currencies. Its strength comes partly from its ability to stay in circulation around the Middle East alongside the Israeli shekel. The Central Bank of Jordan (CBJ) has been a generally risk-averse yet prudent investor, stabilizing the country’s reserves while enjoying many successful investments.

Get Started with Forex in Jordan

Consider the following steps to get started with forex trading in Jordan:

• Your internet connection: A low latency connection with the internet will improve your chances of success in forex. The market moves quickly, and you need to be able to move with it.
• Your broker: The broker you choose is very important to your financial security and access. Although Jordan takes its regulations seriously, the government cannot protect you from offshore brokers. If you choose to work offshore, make sure that your broker is properly regulated.
• Your bank: Your broker should connect to your bank easily. Full integration is necessary for easy access to your funds. Check this connection with small transactions before committing a large amount of money.
• Your funding: Most brokers will allow you to fund your investment account with a payment card or through a direct deposit from your bank.
• Your interface: Choose between the trading interface of your broker or industry standard choices like MetaTrader. Make sure the interface does not add to the latency of your chain.
• Your plan: Now that you have your infrastructure in place, you are ready to begin investing safely in the forex market.

Jordanian Forex Trading Strategies

You can trade forex a number of different ways. Successful investors match their strategies to their personalities. 

Trading the News

Short-term news events sometimes affect the price relations between currency pairs. If you focus your efforts on hourly and daily charts, you can zoom into these changes and profit from them. News trading requires quick reflexes, because you must react to unexpected events. You need a fast internet connection with low latency because you’ll compete with the world’s biggest financial institutions.

Trading the Charts

If you trade according to chart patterns, you’re a technical investor. Technical investors have expert knowledge of trading indicators and historical chart movements. You should be prepared to hold an investment for a few days to a few weeks to allow the patterns to develop. Chart traders are less concerned with the fundamentals behind the price of a currency, so they can move freely between currency pairs.

Trading the Fundamentals

If you are trading fundamentals, you are likely a long term trader. Most successful investors in this space focus their efforts on a few currency pairs. Some may only trade a single pair because they are experts in how those 2 countries relate to each other. Short term news items do not matter much to these investors. Large scale macroeconomic events are much more important — trade deals, GDP expansion rates, import/export ratios and so forth.

Forex Trading Example in Jordan

Imagine that you want to take advantage of the current JPY/JOD exchange rate of 0.00660/0.00680. You want to buy in now because you believe the price is low. Your broker only requires you to have JOD6.51 cash in your investment account for a 25,000 yen investment, because the JPY/JOD currency pair has a margin rate of 4.34%. 

After 4 hours, the JOD/JPY price is 0.00700/0.00720. This is a 2-point move. Your total profit is JOD5 [(50,000 yen x 0.00700) – (50,000 yen x 0.00680)].

Making Money with Forex in Jordan

Attribution: Iris.xyz

Here are some of the tactics you can use to profit in the forex market.

• Short selling: Because the Jordanian dollar is pegged to the dollar, other currencies often fall against it. You can profit from the fall through short selling rather than buying. 
• CFDs: Jordan regulates the contract for difference (CFD) broker more harshly than forex brokers. You will likely have to work through an offshore broker if you want to deal in this high-leverage market technique.
• Binary options: Binary options involve an investor choosing between a “yes” or “no” scenario. The right answer produces a profit, while the wrong answer means a substantial loss.

Best Online Forex Brokers in Jordan

There are many forex brokers in Jordan that have earned a license from the JSC. You can also do business through reputable offshore brokers.

Forex Terminology

Learning the most important terminology in forex puts you at an advantage in the market.

• Pip: The smallest unit of movement in the forex market with a value — $0.0001.
• Lot size: The amount of the order that you execute through your brokerage with a default size of 100,000 currency units.
• Orders: Your instruction to the broker through your trading platform to trade a currency pair.
• Calls: A contract for an order that allows you to call away a certain amount of currency on or before a specific date.

A Solid Base of Operations

Jordan’s forex market has flourished under a relatively strict regulatory structure. This may seem illogical to traditional economists, but it speaks to the belief that the country has in its own financial infrastructure. If you are using the Jordanian dollar as a baseline for your foreign exchange investments, you are beginning from a stable and advantageous place.

Forex investing also relies on your information intake. Bookmark us for important strategies that you can use directly in your market trading.

Frequently Asked Questions