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Are you a newbie to forex trading in Canada? Do you want to know how to trade forex in Canada with the best Canadian Forex Brokers?
Do you want to know how to create a trading account in forex? If your answer is yes, you are at the right place. We will provide a detailed explanation of all your questions as it deals with trading forex in Canada.
To make it easier, we have compiled how to trade forex in Canada using a step-by-step process that even a kindergarten will understand. Trading forex isn’t complicated, as many people assume.
All you need is dedication and discipline. Furthermore, the particular broker you choose for your trading plays a crucial role in your success. Today, we wil focus on guiding you on how to trade forex in Canada. If you are ready, let’s get started.
How to trade Forex in Canada
Trading forex in Canada is not different from trading from the United States or any part of the world. You have access to the same market; however, there are some requirements or restrictions to trading forex in certain areas. It depends on your particular location in Canada, while for others, it can be age or regulatory authorities.
For instance, if you live in Alberta, you might face certain regulatory restrictions. The Alberta Securities Commission has included strict rules for Albertans, which makes it harder to trade forex. Because of this, most brokers don’t allow traders in Alberta to register on their platforms. You can read more about how to trade forex in Alberta to know more about the restrictions.
Choose a Forex Broker
To start trading, you need to choose the best Canadian forex brokers. There are several things to consider when choosing a forex broker. You can start with regulations, customer service, payment system, and financial instrument availability to trade. These can serve as a baseline for choosing the best forex broker in Canada.
However, you need to check if such a broker is IIROC regulated. It is not mandatory to choose an IIROC regulated broker. Nevertheless, if the broker isn’t IIROC regulated or doesn’t have the permit to operate in your country, you cannot register with it. Therefore, if you reside within Ontario or British Columbia, you should ensure the broker you want to use is IIROC regulated.
Once you sort out the regulation issue, you can move to the next step.
Open a Demo Account First
After choosing the forex broker that meets your requirement, the next step is to start the registration process, which will give you access to the trading platform. First, you need to provide relevant information such as first name, last name, email, telephone, and username. During this process, you will choose a unique password and username that allows you to log into the platform. Most forex brokers use an email address as the username.
Immediately you complete the registration, you will receive an activation email to activate your registration. Remember, you are not under any obligation to deposit money into the trading account. You can leverage the demo account, especially if you are a new trader. The demo account allows you to learn how to trade the market, test run your strategy and set up your plan.
Furthermore, you can upgrade to a live account whenever you feel you have perfected your skill.
Confirm your Live Account in Canada
To upgrade your demo account into a live trading account, you need to provide additional information and documents. During the initial opening, there is no requirement for any document. However, to operate a live account, you need to provide proof of identity (driving license, ID card, or passport) and proof of address (bank statement or utility bill). Besides these, you can also provide other personal information such as investment objectives, income, and risk tolerance.
All of this information is needed because of two reasons:
- To avoid money laundering activities – to ensure you are a real person
- Understand the kind of customer to serve them better. Furthermore, it also helps to know the trading level of the trader
Deposit your Funds
After confirmation of your document, you can deposit funds into your trading account. However, the particular deposit option will depend on the broker. Nowadays, brokers offer traders several deposit options, including direct bank transfer, credit card, Skrill, PayPal, etc.
Depositing money to your forex account involves a straightforward process. All you need to do is log into your account and look for the payment section. On the payment section, you select the option that best fits your need. However, pay attention to your broker base currency; for instance, avoid depositing USD to an account with CAD as base currency if you don’t want to pay a conversion fee.
Download your Trading Platform
Once you have deposited it into your trading account, the next step is to choose your trading platform. While you have an option here, it depends on what platform your broker offers. Most broker allows traders to use third-party platforms such as cTrader and MetaTrader. If your broker has their platform, you don’t have to download third-party platforms.
How to check if a broker is Available in Canada
Here, you don’t have much to do because the broker will inform you if they are available in Canada or not. You can jumpstart the process of researching which broker is available in Canada by going through our Canada Forex brokers article. Another option is to check if a broker is available in Canada by visiting the IIROC website. The website can serve as a way to double-check regulated brokers so as not to deposit money in an illegal broker.
Are there fees for starting a Forex Account in Canada?
When using a demo account, there are no fees attached to your trading. However, when using a real trading account, you will pay fees depending on the broker. In most situation, there are 3 types of fees you will pay:
- Minimum deposit
- Broker charges (Not compulsory)
- Conversion fees
How to Trade Forex in Canada FAQs
Is forex trading illegal in Canada?
Forex trading in Canada is legal. Nevertheless, you have to choose a regulated broker by the national regulatory body – IIROC. IIROC acts as a security layer for the trader to ensure these brokers are legitimate. Besides this, you can also check if your province regulatory body accepts such a broker.
Is forex trading tax-free in Canada?
In Canada, forex trading is subject to taxes. It means traders must keep track of their trades, including profits and losses throughout the year. Taxes for traders in Canada can be as high as 50% on profits.