A guide to trading Forex with top brokers in Colombia

The Republic of Colombia is a country located in the north of South America, and stretching over to North America, bordering Panama, Brazil, Ecuador, Peru, Venezuela, and Brazil. The overall territory reaches 1,141,748 square kilometers, making it the 25th largest country in the world.

Colombia is one of the most linguistically and ethnically diverse countries, both in the region and around the world. Such diversity is merely a reflection of the country’s rich history, which is why the Colombian cultural heritage and historical sights are attracting many visitors from all over the world.

With a total population of over 51, million people, the Colombian economy has demonstrated significant development over the last few years. As a result, interest in financial investing and trading has increased at a rapid speed. Colombia is rich in natural resources, and its exports range from mineral fuels, oils, precious stones metals, and forestry to agricultural products ( such as fruits and sugar) and manufactured goods, that primarily include clothes, electronics, confectionary, perfumes, textile, fabrics, vehicles, software and military products.

Although poverty and unemployment remain the main challenges that the country is facing, investing in global financial markets can help residents of Colombia create an additional source of income, or a full-time employment opportunity for themselves.

Top Forex brokers in Colombia

Financial trading is gaining popularity around the globe, with increases in the number of brokers that offer their services. However, this makes finding the most suitable broker very difficult, as traders need to compare trading conditions of multiple brokers to find the one with best offer. To make this task easier for you, we have assessed many different brokers worldwide and picked the ones that offer great trading conditions for the residents of Colombia.

Forex market regulations in Colombia

Forex and CFD (Contract for Difference) trading is fully legal in Colombia. Financial trading is regulated by the Financial Superintendence of Colombia (Superintendencia Financiera de Colombia, SFC). The SFC’s goal is to create a transparent and fair financial system that protects investors and helps the financial environment improve within the country.

The key regulations related to forex in Colombia include:

• The SFC licenses financial institutions that operate within the country. However, residents of Colombia can register with globally regulated brokers.
• The SFC is monitoring the exchange rate mechanism of the Colombian peso (COP) to maintain stability and prevent market manipulation. However, it should be mentioned that COP is available for trading in the Forex market.

To increase the level of safety, brokers need to have segregated accounts from their clients, and offer negative balance protection.

The financial markets in Colombia are sufficiently regulated, however, it does not mean that all scam brokers are eliminated for good. In order to make sure that you do not fall victim to the fraud brokers, we recommend that you always look for a regulated one. It’s worth mentioning that there is a very limited amount of brokers that hold SFC license. However, global reputable brokers that are licensed by well-established regulatory bodies such as: ASIC (Australian Securities and Investment Commission), FCA (the Financial Conduct Authority) in the UK, etc. are to be trusted.

What is the national currency of Colombia?

The national currency of Colombia is the Colombian peso, coded as COP. The COP was introduced in 1810, and it currently actively traded by the local traders, in a pair with the USD. However, this currency is less popular outside the country, as it is considered Exotic and is usually avoided by professionals and beginners alike.

While it’s true that USD vs COP is actively traded, the pair lacks liquidity and has wide spreads, which makes this currency pair unprofitable for intraday traders, scalpers, high frequency traders, and algorithmic traders. Moreover, it should be mentioned that very limited number of brokers offer USD/COP pair in their portfolio.

The most popular trading platforms in Colombia

Choosing a trading platform correctly is an essential component for success in trading. If you are planning to trade automate your trading, you need a platform that enables algorithmic trading. Day traders and swing traders have different requirements. Day traders need trading platforms that are fast and reliable, while swing and position traders can place orders from one platform and conduct market analysis using another platform.

The most popular platforms in Colombia for trading Forex and CFDs (Contracts for Difference) are:

• MetaTrader 4 (MT4) – the MT4 is the most popular Forex trading platform that offers simple and reliable design that enables traders to conduct a comprehensive market analysis and use Expert Advisors (EAs) for trade automation.
• MetaTrader 5 (MT5) – the MT5 is a multi asset platform that enables you to trade not only currency pairs, but also stocks, bonds, futures, and ETFs (Exchange-Traded Funds).
• cTrader – this platform is less popular than MetaTrader platforms, however, highly capable. cTrader offers a level 2 pricing model that enables traders to analysis bid and ask prices, and ECN (Electronic Communications Network) trade execution. ECN trading is ideal for traders that are looking for raw spreads. This software has modern and slick design. On the downside, cTrader is not a multi-asset platform.

Popular payment options in Colombia

The most popular payment options in Colombia are: bank wire transfers, Debit/Credit card payments such as: Visa, Mastercard, and American Express, PSE (Pagos Seguros en Línea), Mobile payments, and payment gateways. Be noted that when making deposits to your trading account, most online payments options are instant, deposits made by bank wire method take a couple of business days.

Summary

Overall, financial trading in Colombia is regulated and supervised by the Financial Superintendence of Colombia. However, the regulator is not highly experienced and there are limited number of local brokers that hold the license from the regulator. On the upside, residents of Colombia can open trading accounts with internationally regulated reputable Forex and CFD brokers. In fact, all the brokers that we have included in our list are operating globally. International brokers offer better trading conditions due to increased competition.

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