Forex‌ ‌Trading‌ ‌in‌ ‌Austria‌

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Contributor, Benzinga
March 22, 2024

According to the GDP per capita, Austria is one of the 14th richest country in the world. The picturesque landscapes of Austria and its boutique novelty stores make it a top tourist destination for travelers from around the world. 

Austria has much to offer forex traders as well. In this article, Benzinga explores the world of forex trading in Austria, including regulations, opportunities and challenges faced by traders in this market. Whether you are a beginner looking to get started or an experienced trader seeking new insights, this guide is designed to help you navigate the forex trading landscape in Austria.

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.

Understanding Forex Trading in Austria

Austria became a member of the European Union (EU) in 1995. The EU membership brought with it some economic benefits, including a surge of foreign investors. In 2002, the euro officially replaced the schilling in Austria. The euro’s banknotes include 5, 10, 20, 50, 100 and 200 euro denominations. 

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Euro Banknotes

Austria’s free market economy and strong social focus are favorable conditions for many investors. The leading industrial sectors in Austria include food, luxury commodities, mechanical engineering and steel construction. Organic farming also contributes to a good chunk of Austria’s GDP. 

The mountains of Austria are natural reserves of metals such as iron ore. The country also contains petroleum and natural gas resources and Austria is a leading producer of hydroelectric energy in the EU.

Getting Started with Forex in Austria 

Here’s a step-by-step guide to help you get started with forex trading in Austria.

  • Get a digital device with fast internet: You can use your desktop, laptop, tablet or smartphone to trade forex. The exchange rates of the currency pairs listed frequently fluctuate. A personal device to track the changes is essential to successful forex trading. 
  • Find an online forex broker: You can find numerous forex brokers available online. Go through websites and choose a broker that lets you trade the currency pairs you want. Be sure to check the footer of the website for information on the regulatory bodies that oversee trading activities. If you can’t find any information from the Securities Exchange Commission (SEC), the Financial Conduct Authority (FCA) or other reputable regulatory bodies, don’t trust the broker. 
  • Sign up for an account: You can open a new account with the forex broker on its website. Some forex brokers require a minimum deposit amount to open an account. Brokers also offer different kinds of accounts based on your initial deposit, trading volume and other factors. Choose the one that’s right for you. 
  • Transfer funds to your account: Once you’ve signed up for an account, you need to transfer funds to start trading forex. Depending on the broker you’ve chosen, you can choose your accounting currency and fund your account using several options. Generally, these funding options include wire transfers, debit cards and online payments. 
  • Download a forex trading platform: You may need to download a supported forex trading platform onto your computer or smartphone. Take the time to customize the look and feel of the platform to help you spot good forex trading opportunities. 
  • Begin your forex trading journey: Before you start trading forex, open some demo accounts using virtual money. These accounts can help you get used to the trading interface of the forex broker without taking any actual losses. After you feel confident using the platform, you can start trading forex using real money in a live account.

Austrian Forex Trading Strategies

Forex traders often rely on variations of certain basic strategies to make a profit trading currency pairs. These forex trading strategies can be quite easy to understand but difficult to master in practice to the point where you can be a consistently profitable trader. Take a look at some of the major forex trading strategies described below. 

Position Trading

Position, or trend trading, is a strategy that generally involves holding your trading positions open as long as an identified market trend you aim to profit from persists. These trades can stay open for anywhere between a week to several months or even years. This method lets you take advantage of major shifts in the exchange rate of currency pairs without stressing over microchanges in the market. 

You can set your preferred entry and exit levels for lengthier durations with position trading. Keeping a watchful eye over current events and socioeconomic policies that affect the relevant currencies that help make this type of trading work. In some cases, you can casually sign in to your account once or twice a week. 

Day Trading

As the name suggests, day trading involves opening and closing trades on the same day. These trades can stay open anywhere between a few minutes to a couple of hours. You can avoid taking unanticipated losses due to overnight exchange rate volatility. 

If you’re new to forex trading, day trading can be a simple and straightforward method to start speculating on currency pair movements. While day trading can reduce your risk somewhat, it can also reduce your profits.  

Scalping

Scalping is a forex trading strategy you can make small profits with trades entered and exited quickly. You will want to keep tight stop-losses, so avoiding slippage is important to scalpers, as is keeping transaction costs low and dealing spreads tight. Scalping also requires quick execution times and fast trading reflexes. 

These are extremely short-term trades that can stay open anywhere between a few seconds and a few minutes. Discipline, a focus on the market and specific news releases can impact your ability to engage in successful scalping.  

Swing Trading

Swing trading involves trading forex currency pairs based on momentum indicators as their exchange rate rises and falls. This method requires an understanding of technical analysis and how momentum indicators signal market reversals. Swing traders may take overnight positions and they tend to trade more frequently than position traders but less frequently than day traders. 

Forex Trading Example in Austria

You can consider trading the EUR/USD forex currency pair. If the EUR/USD currency pair is trading at 1.1315, that means that it will cost you $1.1315 to buy a euro. 

You can buy 100,000 euros on margin via your online forex broker, which will require a deposit of at least 3,333.33 euros in your trading account, given a leverage ratio of 30 to 1. 

After 1 month, if the exchange rate of EUR/USD has risen to 1.1785, then you can sell your 100,000-euro position and you will have made $4,700 over that time period. If the market instead fell by that same amount to 1.0845, then you would have lost the same amount of dollars if your broker did not automatically close out your position earlier for lack of margin.

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EUR/USD exchange rates over the last 1 year.

Making Money with Forex in Austria

Generally, the forex currency pairs that involve euros have relatively tight dealing spreads. Since the euro is backed by the EU and is 1 of the major currencies traded in the forex market, Austrian traders can operate in their local currency with the clear advantage of an unusually liquid market.

The EUR/USD forex currency pair has shown a year-to-date rise of 5.16%. With respect to its 52-week trading range, the  EUR/USD has dipped to a low of 1.0636 and risen to a peak of 1.1806. These significant exchange rate fluctuations provide forex traders with an opportunity to buy and sell the currency pair for a profit. 

Best Online Forex Brokers in Austria

Good online brokers offer reliable trading platforms that allow you to trade forex at your convenience during market hours. You can gain instant access to dozens of currency pairs and live updates on their exchange rate movements. 

These platforms are designed to give you a competitive edge, but you’ll still lack the information, order and transaction flow that major Interbank forex traders can profit from. Online brokers also offer an array of technologies and market analysis tools to enhance your trading. 

Whether you’re a beginner or a full-time forex trader, online brokers provide fast and easy methods to track your trades and manage your positions. You can also take advantage of tight dealing spreads on leading forex currency pairs to achieve greater profits or smaller losses.

Here’s a rundown of some of the best online forex brokers to get you started. 

  • Capital.com
    Best For:
    Market-Leading Spreads
    Disclaimer: 84% of retail CFD accounts lose money.

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.84% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

  • Tickmill Forex
    Best For:
    Low Deposit Requirement
    securely through Tickmill Forex'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.

  • 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

Forex Terminology

You’ll probably want to learn a few basic terms and their definitions before you make your 1st forex trade. These forex jargon terms are used daily by traders across the globe:

  • Pip: A pip is the smallest unit of movement in a currency pair’s exchange rate. In most cases, the exchange rates of currency pairs are quoted to the 4th decimal point. 
  • Lot size: A standardized trading amount. The standard lot size at online forex brokers typically consists of 100,000 base currency units. Smaller units are known as mini- and micro-lots that consist of 10,000 and 1,000 base currency units, respectively. 
  • Orders: You can execute a trade by placing an order with an online broker. When you want to buy a forex currency pair, you place a buy order. Similarly, when you want to sell a forex currency pair, you place a sell order. 
  • Margin calls: Notifications sent out by a broker asking you to deposit more money into your margin account or allow your trading positions to be closed out instead. Some online forex brokers will close out trading positions automatically when that situation arises rather than make margin calls. 

Euros: Among the Top-Traded Currencies

Euros are accepted as payment by 19 out of 27 countries within the EU. The consolidated currency has helped maintain stability and reduce the costs and risks of doing business within the European economy. As a result of its prominence and widespread usage, the euro has become a top currency traded in the forex market since its launch in January 1999.

If you’re interested in trading forex from Austria, then currency pairs involving the euro and other major currencies tend to be highly liquid and available at almost all online forex brokers. Start with our recommended brokers to start trading forex in Austria today.

Frequently Asked Questions

Q

Is forex trading legal in Austria?

A

Yes, forex trading is legal in Austria. The country’s financial regulatory authority, the Financial Market Authority (FMA), oversees and regulates forex trading to ensure fair practices and protect investors.

Q

Is it safe to trade forex in Austria?

A

Austria is well-regulated, so yes, it is safe to trade forex in Austria.

Q

Do you need a license to trade forex?

A

No, you do not need a specific license to trade forex as an individual. However, it is important to ensure you are using a reputable and regulated broker to protect your investments.

Get a Forex Pro on Your Side

FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets with low pricing and fast, quality execution on every trade. 

You can also tap into:

  • EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
  • Powerful, purpose-built currency trading platforms
  • Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program

Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.