Albania will gain quick access to the foreign exchange market as a future member of the European Union and a new economy. With more and more forex brokers offering services in Albania, residents and regular travelers now have the opportunity to earn money by trading currency. This is why it is important to learn about forex trading in Albania.
Our forex trading crash course for beginners will help you enter the market safely if you want to learn more about how to trade forex in Albania.
Get started with Forex in Albania
Forex trading starts with opening a brokerage account with a reliable and reputable broker. Let’s take a look at the basic steps you can expect to follow when opening a brokerage account and making your first trade:
- Step 1: Connect to the Internet. You need to find a stable internet connection before you can open a forex trading account. Although you can shop on a variety of devices, your internet connection must be fast, stable and private.
- Step 2: Choose a broker and open an account. As a trader in Albania, you can open an account with a local national broker or an international broker offering access in Albania. Although the Central Bank of Albania is responsible for supervising brokerage firms, the supervisory body is currently in a transition period as Albania prepares to join the European Union. This means that not all brokers you come across are registered. Be sure to inquire about regulatory status and oversight before opening an account.
- Step 3: Download the trading software. Depending on the brokerage you choose, you may need to download third-party trading software such as MetaTrader 4 or 5 before you can execute a trade. Check the list of software options supported by your broker before downloading.
- Step 4: fund your account. Once your account is fully opened, transfer trading funds using your preferred method. Most brokers in Albania support a variety of transfer methods, from direct bank transfers to debit payments.
- Step 5: Make your first trade. It may take a few days before your deposit is credited to your account. As soon as you see your money in your account, you can officially place your first forex trade.
Albania Forex Trading Strategies
There are a wide variety of trading strategies used by forex investors in Albania. Most traders rank themselves based on how long they hold their positions. There are 3 main types of forex traders: short-term forex traders, medium-term forex traders and long-term forex traders. Let’s see how your ideal trading strategy might change depending on how long you want to hold your trades.
Short term investment
Short-term traders typically use technical analysis to determine which currencies to buy or sell. Technical analysis uses charting software and candlestick formations to predict future price movements based on past patterns. Many short-term traders rely on “reversing candlesticks” which indicate that a currency will quickly change in value. You can hold your position as a short-term trader for just a few seconds and take advantage of many small price fluctuations throughout the day.
A reversal candlestick indicates that a currency will change its value trend.
Traders using a medium-term strategy generally take a more hands-on approach to their technical analysis. These traders generally look for long-term pattern formations like the rounded bottom pattern or the breakout pattern when identifying buy or sell signals. A medium-term trader can hold positions for anywhere from a few days to a few months depending on their currency and market conditions.
The rounded bottom pattern is commonly used by intermediate traders.
Long-term traders generally use another strategy called “fundamental analysis” when doing their forex research. Fundamental analysis is not about chart patterns or minute-to-minute price movements. Instead, traders using fundamental analysis look at the underlying economic and political factors that influence a currency’s price movement. It is common for long-term traders to hold positions for weeks or months on a single trade.
Long-term traders look at factors like GDP and unemployment when deciding their investments.
Example of Forex trading in Albania
Forex traders make money by taking advantage of currency fluctuations. They sell their base lek when they predict the value of the lek will fall in the near future, then they sell their intermediate currency at a profit. Let’s take an example.
Imagine that you believe that the value of the USD will increase against ALL in the near future. You open a brokerage account with a deposit of L100,000. Your broker offers you 10:1 leverage so you can invest up to L1 million in the currency of your choice. You decide to convert your entire party and mine it for dollars.
L1 ALL is currently equal to $0.0092. When you convert your base currency to dollars, you are left with $9,200. Soon you see the value of ALL falling against the USD; when L1 equals $0.0089, you decide to cash out. When you convert your ALT back to USD, you are left with about L1,033M. When you factor in the money you borrowed as leverage, you made a profit of about L33,000 on this trade.
Make money with Forex in Albania
It is completely legal and possible to make money with forex trading in Albania. It doesn’t matter if you are a citizen or a traveler, there are no legal restrictions on the amount you can deposit into an international brokerage account or convert to foreign currency. As long as you keep track of your transactions for tax purposes, you can earn as much as you can earn.
Albania is in a transition period as it prepares to join the European Union. This means that financial and currency laws are likely to change rapidly over the next few years. For this reason, we recommend that you open an account with an international broker with policies that follow the framework defined by the Markets in Financial Instruments Directive. This directive helps to harmonize regulations and leverage limits in EU countries, which Albania will soon join.
Best online forex brokers in Albania
Although Albania is currently in the process of becoming a member of the European Union, the country has not yet fully integrated EU currency rules into its market. This means that you have to be very selective when comparing brokers. Not all brokers operating in the country are licensed.
You can open an account with a national or international currency broker as a resident of Albania. If you’re not sure where to start, consider some of our top picks below.
eToro USA LLC; Investments are subject to market risk, including possible loss of principal.
When you start learning how to trade forex, it is normal to be intimidated by the unique language and terminology that experienced traders use. Familiarize yourself with some of the more common terms below.
- Frog: A pip is the smallest calculable unit of a currency, usually rounded up to 4e decimal. If the value of a currency goes from 1.0001 to 1.0002, the value of the currency has increased by 1 pip.
- Lot size: Your lot size is equal to the number of currency units you move in a single trade. For example, if you want to convert 1 million L to its Euro equivalent, your lot size is 1 million. Most currency traders consider 100,000 currency units to be a standard lot.
- Order: % s: When you want to buy or sell a currency, you place an order through your broker. Your forex broker will then execute the transaction on your behalf. There are multiple order types and you can combine multiple order types to limit your losses and automatically take profits.
- Call: A call is a risk in using leverage to trade. If you use leverage to trade and your portfolio value falls, your broker can issue a margin call that forces you to deposit more money into your account. A single margin call can quickly wipe out any profit you make from trading. So be careful when using leverage.
A developing currency market
Albania is about to become a member of the European Union. This means that lawmakers are currently scrambling to adjust currency and leverage regulations to comply with the EU’s Markets in Financial Instruments Directive. Although you can find local brokers offering very high leverage now, it is very likely that these caps will be lowered in the coming years as Albanian restrictions tighten as a new member of the EU. Follow new regulations, licensing requirements and restrictions to keep track of changing market conditions.
Is it legal to trade forex in Albania?
Yes, it is legal to trade forex in Albania.
Is it safe to trade forex in Albania?
It is safe to trade forex in Albania as long as you use a licensed forex broker.
Where can I find a licensed forex broker in Albania?
You can find a licensed forex broker in Albania by checking the list above.
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