Forex Trading in Albania

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Contributor, Benzinga
December 6, 2022

Albania is quickly gaining access to the forex market as an upcoming member of the European Union and a budding economy. As more and more forex brokers offer services in Albania, everyday residents and travelers now have the opportunity to make a profit exchanging currency. That's why it's important to learn about forex trading in Albania.

Our crash course on beginner forex trading will help you enter the market safely if you’d like to learn more about how to trade forex in Albania. 

Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% 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.

Get Started with Forex in Albania

Trading forex starts by opening a brokerage account with a reliable, reputable broker. Let’s take a look at the basic steps you can expect to go through when you open a brokerage account and make your first trade:

  • Step 1: Connect to the internet. You’ll need to find a stable connection to the internet before you can open a forex trading account. Though you can trade 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 either a local domestic broker or an international broker offering access in Albania. Though the Central Bank of Albania is responsible for overseeing brokerage firms, the regulatory body is currently in a transitional period as Albania prepares to join the European Union. This means that not every broker you’ll encounter is registered. Be sure to ask about regulatory status and oversight before you open an account.
  • Step 3: Download trading software. Depending on which brokerage you choose, you might need to download a 3rd-party trading software like MetaTrader 4 or 5 before you can place a trade. Check your broker’s list of supported software options before you download.
  • Step 4: Fund your account. After your account has been opened in full, you’ll need to transfer trading funds using your method of choice. Most brokers in Albania support a variety of transfer methods, ranging from direct bank transfers to debit payments.
  • Step 5: Make your first trade. It might take a few days for your deposit to be cleared into your account. As soon as you see your funds in your account, you can officially place your first forex trade. 

Albania Forex Trading Strategies

There is a wide range of trading strategies used by forex investors in Albania. Most traders categorize themselves based on how long they hold their positions. There are 3 major types of forex traders: short-term traders, medium-term traders and long-term traders. Let’s take a look at how your ideal trading strategy might change based on how long you want to hold your trades.   

Short-Term Investing

Short-term traders typically use technical analysis to determine which currencies they should buy or sell. Technical analysis uses charting software and candlestick formations to predict future price movements based on previous patterns. Many short-term traders rely on “reversal candlesticks,” which indicate that a currency will quickly change in value. You might hold your position as a short-term trader for as little as a few seconds, capitalizing on many small price fluctuations throughout the day. 

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A reversal candlestick indicates that a currency will change its value trend. 

Medium-Term Investing

Traders who use a medium-term strategy typically take a more involved approach to their technical analysis. These traders typically look for longer-term pattern formations like the rounding bottom pattern or breakout pattern when identifying buy or sell signals. A medium-term trader might hold onto their positions for as little as a few days to as long as a few months depending on their currency and market conditions.  

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The rounding bottom pattern is commonly used by medium-term traders. 

Long-Term Investing

Long-term traders typically use a different strategy called “fundamental analysis” when doing their currency research. Fundamental analysis doesn’t look at charting patterns or minute-to-minute price movements. Instead, traders using fundamental analysis examine the underlying economic and political factors that influence a currency’s price movement. It’s normal for long-term traders to hold onto their positions for weeks or months on a single trade.   

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Long-term traders look at factors like GDP and unemployment rates when determining their investments. 

Forex Trading Example in Albania

Forex traders earn money by taking advantage of currency fluctuations. They sell their base leks when they predict that the value of the lek will fall in the near future, then they sell their intermediary currency for a profit. Let’s take a look at an example.

Imagine that you believe that the value of the USD is going to rise in relation to the ALL in the near future. You open a brokerage account with a deposit of L100,000. Your broker offers you 10:1 leverage, which allows you to invest up to L1 million in your currency of choice. You decide to convert your entire lot and leverage it to dollars.

L1 ALL is currently equal to $0.0092. When you convert your base currency into dollars, you’re left with $9,200. Soon, you see that the value of the ALL is falling in comparison to the USD; when L1 is equal to $0.0089, you decide to cash out. When you convert your ALL back to USD, you’re left with about L1.033 million. When you account for the money you borrowed in leverage, you made a profit of about L33,000 on this trade. 

Making Money with Forex in Albania 

It’s completely legal and possible to earn money forex trading in Albania. No matter if you’re a citizen or a traveler, there are no legal limitations on the amount of money you can deposit into an international brokerage account or convert into foreign currency. As long as you keep track of your trades for tax purposes, you can take as much profit as you can earn trading.

Albania is in a transitory period as it prepares to join the European Union. This means that financial and forex laws are likely to change rapidly throughout the upcoming years. For this reason, we recommend opening an account with an international broker with policies that follow the framework set forth by the Markets in Financial Instruments Directive. This directive helps harmonize regulations and leverage caps across EU countries, which Albania will be joining soon.

Best Online Forex Brokers in Albania

Though Albania is currently in the process of becoming a member of the European Union, it has not yet fully integrated the EU’s forex regulations into its market. This means that you should be very selective when you compare brokers. Not every broker operating in the country is licensed.

You can open an account with either a domestic or an international forex broker as a resident of Albania. If you aren’t sure where you’d like to begin, consider a few of our top choices below. 

  • Forex.com
    Best For:
    Forex Trading in and Outside the U.S.
    securely through Forex.com's website

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% 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

  • IFC Markets
    Best For:
    Best for Leverage Trading with Many Instruments
    securely through IFC Markets's website
  • Pepperstone FX
    Best For:
    Trading Experience
    securely through Pepperstone FX's website

    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.6% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

  • AvaTrade
    Best For:
    Non U.S. Forex & CFD Traders
    securely through AvaTrade's website

Forex Terminology

When you’re first getting started learning how to trade forex, it’s normal to be intimidated by the unique language and terminology that seasoned traders use. Familiarize yourself with a few of the most common terms below.

  • Pip: A pip is the smallest calculatable unit of a currency, usually rounded to the 4th decimal place. If the value of a currency moves from 1.0001 to 1.0002, the currency’s value has increased by 1 pip.
  • Lot size: Your lot size is equal to the number of units of currency that you’re moving on a single trade. For example, if you want to convert L1 million to its equivalent in euros, your lot size is equal to 1 million. Most forex traders consider 100,000 currency units to be a standard lot.
  • Orders: When you want to buy or sell a currency, you’ll place an order through your broker. Your forex broker will then carry out the trade on your behalf. There are multiple types of orders, and you can combine multiple order types to limit your losses and automatically take profits.
  • Calls: A call is a risk of using leverage to trade. If you use leverage to trade and the value of your portfolio falls, your broker might put out a margin call requiring you to deposit more money into your account. A single margin call can quickly wipe out any profits you earn trading — so be careful when using leverage. 

A Changing Currency Market

Albania is in the process of joining the European Union. This means that lawmakers are currently making efforts to adjust forex and leverage regulations to fit in line with the European Union’s Markets in Financial Instruments Directive. Though you might find local brokers offering very high leverage now, it’s very likely that these caps will be decreased in the coming years as Albanian restrictions tighten as a new member of the EU. Keep up with changing rules, licensure requirements and restrictions to stay on top of changing market conditions. 

Frequently Asked Questions

Q

Is it legal to trade forex in Albania?

A

Yes, it is legal to trade forex in Albania.

Q

Is it safe to trade forex in Albania?

A

It is safe to trade forex in Albania as long as you use a liscensed forex broker.

Q

Where can I find a liscensed forex broker in Albania?

A

You can find a liscensed forex broker in Albania by looking at the list above.

Get a Forex Pro on Your Side

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  • EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
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About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.