USD/MXN Trading Tutorial

Borders are opening after the isolation that was a result of the worldwide Corona pandemic. With Mexico and the United States of America sharing borders, cross-border travel will be increasing. Now is the time to learn about how your dollar will behave if you visit and how profitable the Forex pair USD/MXN could be if you are an investor. 

Strategies for trading usdmxn

Part-time traders do not have the time or the focus to spend on their trading. There are “watchdogs” they could employ to keep track while they are not actively involved. 

Different Strategies for trading


You may choose to be a scalper. If this is your path you will need nerves of steel and be prepared to hop in and out of your trades within tiny time frames. Scalping requires fast reaction times and can become stressful.

Your aim as a scalper is to make a lot of transactions in a short time frame – sometimes as little as a minute. The anticipated outcome is to make many small profits quickly which will add up to a substantial day’s trading. Usually a scalper will play with a small percentage of their funds as scalping is a risky strategy. It is normal to set up a stop-loss system to close potential losses before they become troublesome.

This can be quite stressful as even a bathroom break may result in a lost opportunity so scalpers tend to rely on automated processes and apps to keep an eye on their progress. Scalpers need to be unemotional in their trading

Day trading

Decide if you want to restrict your trade to trading when you are awake. To do this you will close all your trading before retiring. This way you will not get surprises (fortunate or unfortunate) when you wake up.

Day trading involves active trading over a short time frame. Day traders will often have several currency pairs in the mix. Day traders get involved with many currency pairs in a day. They need to analyze which ones will give them the best return at the end of the day. Typically a day trader is calm and unhurried in his decisions. He will use technology to help him analyze the market.

Swing trading:

Swing traders watch to see which currency pair is trending. They will generally select a pair and then let it rest for hours, days or maybe even weeks, taking dips and peaks in their stride, hoping that it will all even out in their favor. They like to buy when it is low and sell when it is high. 

They will also automate stop-loss on their account to safeguard themselves from losing too much. 

A swing trader tends to be an analytical type of person who has time to spend watching their investment.

Position trading: 

Position traders are in it for the long haul. Once they have selected their Forex pair they let it ride for days, weeks and in some cases, even months. They will not be concerned about minor changes which means that they do not have to watch the Forex pair minutely every day. Position trading does not require detailed time management so it is ideal for the person who has available cash and limited time.

You will not be attracted to this form of trading if you need a rapid access to your cash. It is essential that the money you are trading can be left alone, that it will not be required to trade in any other Forex pair. The typical positon trader will rely on technology to help them decide on their entries and exits from the market. 

Trend trading

Trend traders watch the trends in the market. They will follow a strong movement and will trade in the direction of the trend. They will need to spend a lot of time analyzing trends before deciding on the Forex pair that is right for them. The Forex pair will be left for months absorbing the fluctuations of the market. 

The typical trend trader has an analytic mind and supreme patience to allow the trend to develop. 

Is $100 a lot of money in Mexico?

Money is a strange commodity. To some people, $100 (USD) is small change, but to others, $100 (USD) can buy the few necessities needed to keep body and soul together. In comparison, $100 (USD) to approx. $2,000 (MXN) (usdmxn Forex) you can achieve a lot more in Mexico than you can in the States. 

In Mexico, $100 (USD) is the weekly wage of most laborers, so it can certainly keep a family going for the week. Taken item for item, $100 (USD) goes a lot further in Mexico than it will last in the States. If we look at the average expenses a person faces like food, accommodation, clothing, and transport, what USA citizens pay averages out at approximately 100% more than Mexicans pay. 

This dollar/peso exchange paints a good picture for the tourist industry in Mexico as Americans can holiday more luxuriously than they could at home. Buying power in Mexico will, however, fluctuate from place to place. High-level tourist centers will eat up your $100 (USD) quickly. But if you stay in a self-catering facility and buy your food and drinks at a supermarket, you will have a pleasant holiday. 

Excursions, tourist purchases, and daily living expenses depend on personal taste. Your tourist destination also influences how far your $100 (USD) can stretch as Mexico is a colorful mixture of 1st, 2nd, and 3rd world areas.  

If you choose the luxury tourist destinations, $100 (USD) has a lot less buying power than if you had chosen a cheaper alternative. Dinner for four in an upmarket restaurant will eat up your $100 (USD) faster than you can eat your meal. If you chose an eating house with local flavor, your $100 (USD) could satisfy a group of eight diners. 

If you give the local cuisine a chance, you will be surprised at how far your money will go. Why travel to places outside the United States of America if you do not want to experience things unique to that destination? Broaden your mind; try Mexican beer instead of your normal brew. It will come a lot cheaper as well.

$100 USD will get you about four doctor’s visits in Mexico. Do not pooh-pooh this fact. Anyone can get sick while enjoying their foreign travel. Your insides sometimes are not a match for local cuisine. An interesting fact is that you can circumvent doctor’s visits by a visit to the local pharmacy. Most medication is available over the counter, even those meds that will need a prescription in the good old US of A. If you know the name of the medication, it will very likely be freely available in Mexico. 

Before you leave the comfort of your home, think about curtailing your spending if you are traveling on a shoestring. What works for you at home may need careful reconsideration to get the best value for your American dollar. 

When you travel in Mexico, use local transport rather than hiring the make of car you would drive at home. Local transport will take you to areas that are hidden from the ordinary traveler, broadening your experience. 

Turn your focus to experiencing the local people and the local festivals. Absorb the essence of Mexico. Your dollar will stretch as well as making your holiday experience more meaningful, giving you lots to share with your stay-at-home friends.

Mexico can give you a cheap, enjoyable holiday if you are prepared to forgo your home comforts and sink yourself into the local cuisine and the local festivities. Meet the locals on their home turf. Do things you would never consider doing in your comfort zone. 

All of this will stretch your American dollar and will give you a satisfying experience to take home with you.

Is it a good time to buy Mexican peso?

If you are considering usdmxn Forex investment, the peso, at the moment, is on an upward incline which indicates that it is a good time to invest. The people in the know have estimated that usdmxn will continue to rise against the dollar for the next five years. The increase is not all that great, but serious investors could expect an increase of nearly 12% over time. 

Investors must be patient and just let this investment lie. Just as with all investments, the investor must keep a wary eye to focus on it frequently as this is just a prognostication by brokers.

As usdmxn tends to dip and then climb, it is not an investment for the nervous Forex financier. This type of investor may become jumpy and terminate his investment too early. He will be kicking himself when the peso’s value increases.

The seasoned investor will keep an eye on his investment. He will allow the usdmxn to mature, resulting in a profitable outcome at the end of the recommended five-year period.

Brokers have observed the trends with usdmxn since November last year. The graph that they use indicates that the peso is gaining in value against the dollar. There have been small dips since May, but each dip has been followed by an increase, an increase that moves a point higher up the graph scale. This steady increase leads the brokers to believe that there will be an overall incline in the peso’s value.

Mexico is showing growth in its economy. This growth is a positive indicator to brokers of the usdmxn pairs. As a growth in the economy occurs, the value of the Mexican peso will rise.

Some serious investors are recommending that a trader gives a stop-loss order to their brokers. Stop-loss is refuted by the more involved traders. They do not like the idea of turning their investment over to a computer. A computer will watch the fluctuations, and it will not be affected emotionally but may also make a preemptive decision. This decision could affect the serious investor critically by minimizing his expected profit in his usdmxn investment.

A stop-loss order will help the nervous investor. It will terminate the investment and limit the loss incurred by the trader. In issuing a stop-loss order, the trader will set a limit on how much he will lose on his investment. A wily broker will assist you in choosing the ideal percentage for the stop-loss order. 

A stop-loss order is there to protect a trader from a market crash. The order will probably be used by traders who have many investments to oversee. It will also be beneficial to the beginner or nervous trader. 

Just a word: – Traders should be able to shoulder adverse situations without succumbing to nerves. Nerves have no place in trading.

What affects Usdmxn?

Many factors affect usdmxn as well as any other Forex pairs. All Forex pairs are very vulnerable to the changing state of the economy in the two countries concerned. 

When unemployment rises in one of the countries there is going to be a dip/rise in the transactions. The rate of unemployment is an active indicator of the stability of the country. 

Fluctuating interest rates will also factor in when considering trading in usdmxn. As Mexico’s debt lowered, the peso gained ground which affected the interest rates and gave more confidence in trading the usdmxn Forex pairs. Traders and brokers in the usdmxn pair watch two banks – the US Federal Reserve Bank and Mexico Central Bank. The movement in these banks clarifies the exchange rates between these two countries.

Inflation also ties in with the state of the country and the interest rates that are applied. In a snowball effect, this will impact on usdmxn exchange.

Mexico produces oil from an oil field in the Gulf of Mexico. The Mexican peso is closely linked to the fluctuations in the price of crude oil. As the price of crude oil fluctuates, the currency pair usdmxn is going to be affected. 

The stability of the two countries will also affect the exchange rate of usdmxn. Factors such as the elections in the United States of America last year impacted the exchange rates of usdmxn. Any other major news items regarding riots, unemployment, and even natural disasters will cause a panic in traders of the usdmxn pair of currencies.

The borders between the United States of America and Mexico were closed due to Covid. Mexico relies quite heavily on the tourist trade. The drop in tourist figures meant that less external money was being spent in Mexico. A drop in money coming into a country has a negative impact on the financial status of that country. The bad financial status impacted the usdmxn pair of currencies.  Passage through the borders still has restrictions even though there has been some relaxation at the border between Mexico and the United States of America. Tourists are still not permitted, but essential travelers are allowed to cross the border. These restrictions are to be reviewed at the end of October 2021. When tourists are allowed to cross the borders, the Mexican peso will be advantageously affected. The usdmxn will improve when tourist trade increases.

A trader who has invested in the usdmxn currency pair needs to watch the news to catch anything vital that impacts their investment. A trader will not need to do their own internet searches for news. Fortunately, most of the Forex platforms have a permanent link to news that will affect their transactions. 

The Banco de México has introduced a stricter monetary policy. This policy will help the economy recover and grow. In turn, this will lead to a better option for traders who want to trade in usdmxn. It is interesting to note that Mexico’s debts are lower than Japan, Greece, and even the United States of America. 

Although usdmxn is not a major currency pair, it is an emerging currency pair and is amongst the top ten trading pairs.

Where is Peso used?

Everyone knows that the peso is used in Mexico, but surprisingly it is not the only country to use pesos. The history behind the peso is important. It has influenced many currency names and types in many countries.

We need to travel back in time to the time of the Spanish doubloons and the Spanish dollar. Everyone with any pirate knowledge is familiar with the term “pieces of eight”. Pieces of eight was another term for the Spanish dollar. The Spanish dollar was equal to 8 pesos. The sign for the peso was $. So now we know how the symbol for the American dollar originated. The United States of America is a world-leading power. Their right to the $ symbol transcended Mexico’s right. Mexico then adopted the symbol MX$.

Mexico was originally under Spanish rule, and when they became independent, they kept the historical monetary system. Soon the Spanish dollar was phased out. 

Originally the peso was made out of gold and silver. The coins were measured by weight. Peso is Spanish for weight. As time went on these pricey commodities were replaced with cheaper materials. 

The peso was one of the more stable South American currencies until the oil crisis in the ’70s. Mexico is still trying to recover but is become more stable in its finances.

Mexico was one of the first countries to instigate a process that makes counterfeiting their banknotes very hard. The new notes are made of a plastic compound. The notes contain watermarks, holograms, and micro prints. 

You can use the pesos when shopping in the United States of America, Canada, and some Eastern countries. 

Because there is a strong Spanish influence in South American countries, the peso is a currency in some South American countries. It is also used in the Philippines.

Argentina uses the Argentine peso. The symbol that Argentina uses is $a. $100 is almost 1,000 $a. A week of living in Argentina will cost you just over $120.

Chile uses the Chilean peso. The Chilean peso symbol is $CLP. $100 will buy you more than $80,000 CLP. $150 will see you living comfortably for a week.

Columbia also uses the peso is also used in with the symbol $COP. $100 converts to nearly $400,000 COP. Your $100 USD will keep you in the simple life for a week, and you may come out with a bit of savings.

Should you wish to visit Cuba, you will find the familiar $ symbol representing the Cuban peso ($ CUP). When you travel to Cuba, your $100 will buy you over $2500 CUP. IF we look at the cost of living in Cuba, a single person can survive on about $150 USD.

Let us now examine the last South American country to use pesos, Uruguay ($ UYU). Your $100 American dollar converts to approximately $4,300 UYU. You can live quite comfortably on under $200 USD per week.

The small island in the Caribbean Sea, the Dominican Republic, has also been influenced by the Spanish pieces of eight. This influence means that the currency here is also measured in pesos ($ DOP). Life is more expensive here than in Mexico. Your $100 will not go far. In Mexico, you could live comfortably for a week on $100. In the Dominican Republic, a week of simple living will cost you about $300. 

The last country that still uses pesos today is the Philippines. $100 in the United States comes out at over $5000 PHP. You can live quite comfortably in the Philippines on $200 USD per week.

Please remember that the prices that I have quoted are correct at the time of writing, but as currencies do not have a stable life, you will need to check before you book your holiday to any of the above places. If you are considering investing in the above-mentioned currency pairs, you will also need to check at the time of investment.

Steps in Forex trading the USD/MXN pair

  1. Find a forex broker that will answer your queries and help you along the way. In other words, one that you have confidence taking into your corner.
  2. Sort out which currencies you want to trade. With Forex pairs, you are buying one currency with another currency. So usdmxn means that you are using USD to buy MXN.
  3. Watch the market and keep a journal of what is happening with your chosen Forex pair. It will help you decide if you want to trade. 
  4. Check that the quoted exchange rate suits you. Remember, the broker has his cut. His cut is the difference between the two currencies quoted. 
  5. There are two ways that you can take with Forex pairs. These ways are known as a position. The first in the Forex pair is called the base currency, and the second one is the quote currency.
  • If you think that USD will move up, you are in what is known as a buy position. This is a bullish trade.
  • A sell position is the reverse. You are banking that the base currency will drop. This type of trade is called a bearish trade. 

Stop-Loss orders

Traders could implement a stop-loss order. This order will prevent you, the trader from running into debt should the Forex pair start to behave badly. You could set this up when you start to trade the pair or you could step in and do it later if you are worried about the performance of usdmxn. 


You need to research your Forex pair. Keep track of it for as long as necessary. It will help establish whether or not usdmxn is going to be profitable for you. Watch for trends.  Choose a trend that is moving forward, rather than wait for it to reach a peak. 


You cannot afford to be an emotional trader. Don’t deal with too many or too few trading pairs. Don’t let your nerves cause you to be trigger happy which will cause you to sell too early. A few Forex pairs can consolidate your place in the market. Let your pair rest. The market is volatile, and a dip at noon may be converted to a gain at 3 pm. 

Do not be attracted to markets that everyone else is going for without doing your research. It is so easy to be swept away on a tidal wave of investments.

Demo Account

A demo account is useful. Once you have selected usdmxn, run it on a demo account to observe look how it is trading. As soon as you are confident that usdmxn is the Forex pair for you start trading for real. Don’t operate a demo account for ages a maximum of a month should clarify your choice.

Protect your trade 

Because your trade could plummet while you sleep, you need to take precautions to protect your investment. A stop-loss order will slam the door closed on your trading if there is a possibility that you will lose more than you can afford. Keep an eye on the news for Mexico and the United States. Bad news or good news will cause fluctuations in the market.


Be aware that leverage will help you make a better profit, but it can also put you in a position where you lose more than you can afford to lose. So use leverage wisely. 


Mexico is an emerging economy and is looking good for investment in the Forex pair USD/MXN. The situation will improve even more as the borders open to tourists. Money coming in to Mexico will stabilize the economy.

Forex trading needs a clear, unemotional standpoint as it is a risky business for those who are not careful. Do not regard Forex as an investment. Rather think of it as trading. So what is the difference? Investment usually means that you can rest on your laurels, nothing much is going to happen to your chosen investments in the short term. With Forex you need to be actively keeping a continuous eye on your pair.