Forex Trading in Cyprus

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Contributor, Benzinga
October 19, 2022

The Cyprus forex market is one of the world’s most balanced and stable. The Cyprus Securities and Exchange Commission (CySEC) is one of the most well-respected forex licensing institutions on the globe, prompting well-known brokers like FXTM and Markets.com to set up shop on the island. Foreign exchange trading may be taking off, but are the financial markets in Benin strong enough to serve individual investors.

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.
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Attribution: Just About Cyprus – The Cyprus forex market benefits from Cyprus’ use of the euro as its main form of currency.

Brokers have many advantages for doing business in Cyprus, and one of the most important is the extremely low business tax rates. Cyprus is also a member of the European Union (EU), the European Economic Area (EEA) and is accredited through the Markets in Financial Instruments Directive (MiFID). Companies get cheap residence, investors get a high regulatory standard and the forex market in Cyprus wins.

Get Started with Forex in Cyprus

If you want to trade forex from Cyprus, you’ll have easy access to some of the most reputable names in the business. You also trade under the protection of the EU. There are some tips you should keep in mind, however. Every investor is ultimately responsible for his own safety in the ultimately unregulated, decentralized forex marketplace.

  1. Your internet: Good internet protects you from missing out on investment opportunities. You could run multiple sites and programs at once when investing in forex live, so make sure your connection is fast enough to handle them all.
  2. Selecting a broker: You have plenty of choices of reputable brokers doing business from Cyprus. Make sure any broker you pick is regulated through CySEC. You may also choose an offshore broker. If so, that broker should work under the auspices of MiFID.
  3. Connecting your bank: Connect an outside account from Cyprus or other banks in the EU for the best results. There should be no problem with offshore accounts, though.
  4. Funding your account: Test the connection between your broker and your bank account with a few small transactions before committing yourself fully. You need a solid connection that you can count on.
  5. Choosing a trading interface: Many of the brokers doing business out of Cyprus will have their own trading interfaces. There are 3rd-party solutions to choose from such as MetaTrader.
  6. Beginning to invest: With everything in place, you can begin to place your forex investments with confidence. Remember, foreign exchange transactions are just one type of investment, and you may diversify with other investments.

Cyprusese Forex Trading Strategies

Your investment personality informs the way that you trade forex. Take a look at some of the profiles that are commonly associated with trading styles.

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Attribution: Global Banking

The Day Trading Profile

If you gravitate toward day trading in the forex market, you may be more interested in chart patterns than individual currencies. When you are dealing with seconds and minutes in a trade, currencies react in a similar way. The news on any individual currency does not matter very much in this timeframe. To be successful, you’ll need to understand trading indicators and react very quickly to market conditions.

The Swing Trading Profile

Swing traders have a balance of watching news and charts. Because swing traders hold investments for weeks at a time, the chart patterns are sometimes influenced by changes in the ways that countries interact with one another. However, short-term chart patterns still play out in purely technical ways as well. There is a balance that these traders must walk, and it can be confusing for people without a clear understanding of how individual trading and market movements overlap.

The Position Trading Profile

The position trader is known for being patient and understanding the long-term ramifications of news items and macroeconomic statistics. Chart patterns are less important and may actually serve to provide the position trader with a red flag rather than a trading opportunity. Over the duration, short-term chart patterns balance themselves into a more logical pattern between the price and value of a currency.

Forex Trading Example in Cyprus

You want to order €90,000 when the trading range of EUR/USD is 1.1410/1.1450. Your Cyprus broker provides a margin rate of 2.14% for the EUR/USD pair. You can buy €90,000 if you hold $2,201.42 cash in your account. 

After 11 hours, the new EUR/USD trading range is 1.1470/1.1490. If you sell on this 20-point move, you will profit you (€90,000 x 1.1470) – (€90,000 x 1.1450), or $180.

Making Money with Forex in Cyprus

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Attribution: Wikimedia – Kingstown Harbor of Cyprus

When you match your investment personality to the right strategy, you give yourself the greatest chance of success. Here are a few of the most significant strategies that are commonly used in the forex market.

  • Short selling: The euro is a strong currency, so you can make money short selling weaker currencies against it. Instead of making money from the strength of a currency, you make money when its value goes down against a stronger one.
  • CFDs: CFDs are contracts for differences, a type of investment that allows a trader to benefit (or lose) from the gain or loss in value of a currency without ever owning that currency.
  • Binary options: Binary options offer an easy binary choice for traders — a yes or no answer for a question about a currency price target.

Best Online Forex Brokers in Cyprus

There are plenty of forex brokers licensed directly through Cyprus. When you have an overload of choices, you can pick the one that is truly best suited for you.

  • 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.

  • Plus500
    Best For:
    Mobile Users
    securely through Plus500's website
  • IG Markets
    Best For:
    Forex Execution
    securely through IG Markets's website

    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% 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.

  • FxGlory
    Best For:
    Fixed Spreads
    securely through FxGlory's website
  • AvaTrade
    Best For:
    Non U.S. Forex Traders
    securely through AvaTrade's website
  • eToro Forex
    Best For:
    Demo Accounts
    securely through eToro Forex's website

    CFD trading is not available to U.S. users. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

  • HYCM Capital Markets
    Best For:
    Straightforward MetaTrader Platform Experience
    securely through HYCM Capital Markets's website

Forex Terminology

If you know the terms that most forex investors use, you can more easily understand their strategies.

  • Pip: The forex measurement baseline, equal to $0.0001 
  • Lot size: Your order size
  • Orders: Your investment details
  • Calls: A contract for currency

A Clear Path to the Market

Trading forex in Cyprus is easy to set up, but profiting in the marketplace is no easier than it is anywhere else in the world. Yes, your personal and financial information is safer from fraud in Cyprus than in other places. Bad trading, however, is just as much of a risk here.

To succeed in the forex market, you need real-time news, up-to-date charts and a solid strategy. This comes from a great setup and a great knowledge of the market. Bookmark our website for everything that you need to have the best chance of success in forex.

Q

What does a Forex license in Cyprus give you?

A

A Forex license in Cyprus gives you complete access to the EU market.

Q

What do Forex brokers in Cyprus need?

A

Before a Forex broker in Cyprus can accept clients, they must be authorized by the Cyprus Securities and Exhange Commision (CySEC).

Q

Why do Forex brokers choose Cyprus as their home?

A

Cyprus has more than 40 firms domicilled on the island, making it a great place to be a Forex broker.

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.