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Forex Trading in Lithuania

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If you want to operate in a well regulated and straightforward retail forex market, you can do so from Lithuania. As a member of the European Union (EU), forex trading and broking activities in Lithuania are regulated through the EU’s European Securities and Markets Authority (ESMA), the Markets in Financial Instruments Directive II (MiFID II), the Markets in Financial Instruments and Amending Regulation (MiFIR) and the Central Bank of Lithuania itself. The country keeps an official list of the companies that have been given the privilege to do business within its borders. If a company is not listed, the country strongly recommends “not making use of its services.”

History.com – The euro replaced the Lithuanian lita as the official currency in 2015.

The Lithuanian government also took the time to produce an in-depth guide of warnings for retail forex traders, especially since most such traders lose money. The Bank of Lithuania advises that investors steer clear of opaque investments, do business only with properly licensed companies and steer away from “easy money” and no-risk proposals from brokers.

Get Started with Forex in Lithuania

There are plenty of resources available within Lithuania for the beginner currency trader. All traders are advised to look through the Central Bank of Lithuania’s website and follow the suggestions below for opening a forex trading account.

  1. Connect to the web.  The internet infrastructure in Lithuania is quite good in the country’s developed areas. Forex traders should be able to access sufficient affordable bandwidth to handle the trading platform, websites and trading tools that sophisticated forex traders may need to use.
  2. Connect to your broker.  Located in the Baltic area of Eastern Europe, Lithuania is a member of the European Union (EU). Forex brokers that accept Lithuanian clients must abide by the MiFID regulations of the EU. Pay close attention and stick to trading through major brokers that are overseen by a reputable regulatory agency and have a good online track record regarding dealing fairly with their clients.
  3. Choose an appropriate account type.  Most brokers offer several different account types. Choose one that best fits your initial deposit amount and trading needs. 
  4. Fund your trading account.  To fund your trading account, you will typically need to transfer money from your bank through a bank wire, make a credit or debit card payment or use an electronic payment service provider such as PayPal or Skrill.  
  5. Connect your trading platform.  You’ll need to download your broker’s proprietary trading platform or a 3rd-party trading platform your broker supports, such as MetaTrader or cTrader. Many forex brokers now offer a mobile trading option and a web-based platform that doesn’t require you to download software. 
  6. Make your first trade.  Now you’re ready to make your forex trade. You may want to practice trading in a demo account first to test out your trading strategy before operating in a live account. 

Lithuania Forex Trading Strategies

The way that you trade forex is unique to you. Be aware of how you react to stressful situations before committing large amounts of money to the market. Your personality will often determine what kind of trader you become. Take a look at the following profiles to see which one you match.

Day Trading 

Day traders usually need to take advantage of market opportunities quickly. Typically they trade in and out of positions throughout the trading “day” or session, although the forex market trades around the clock from 5 p.m. Sunday EST to 5 p.m. Friday EST, so the forex day trader must select the session they trade in. The London, New York and Tokyo trading sessions are typically selected by day traders and each have time slots corresponding to the standard business hours in those key money centers. While day trading covers a wide variety of trading strategies, these traders typically close out all positions before the end of the trading session. This means that they hold a position for a few minutes or a few hours but not overnight.

Swing Trading

Swing traders aim to profit from trends, corrections and ranges in a currency pair to determine optimum entry and exit points for their trades. They generally watch technical momentum indicators for signals of a market reversal that they might profit from. Many swing traders also watch for chart patterns and key levels of support and resistance to appear on the chart of a currency pair’s exchange rate to inform their trading. Unlike day traders, swing traders often take positions overnight that can be held for days or weeks in some cases. 

Position Trading 

Position traders take the long view on the direction of a currency or pair against a basket of other currencies. For example, a position trader that has a bullish view on the U.S. dollar might sell the EU euro, the British pound sterling and the Japanese yen against the U.S. dollar to reflect their view. Position traders can patiently hold positions for months or even years depending on whether their view of a currency pair remains firm. Position traders typically trade less frequently than swing or day traders due to their long-term trading horizon, and they tend to be more focused on a currency pair’s fundamentals to inform their position-taking. 

Forex Trading Example in Lithuania

The bid/ask spread for the EUR/USD currency pair currency stands at 1.1800/1.1805. You decide to take a long €45,000 position in the pair at 1.1805 to wait on a short-term move up. Your online broker allows you to use leverage of 30:1 in EUR/USD and requires you to have at least €1,500 in cash in your trading account as collateral in case you lose money. 

After 15 hours, the EUR/USD bid/ask quote is 1.1825/1.1830. The exchange rate for the pair increased by 20 pips allowing you to sell out your position at 1.1825. You get (€45,000 x 0.0020)  or $90. Had the market instead fallen by 20 pips, you would have lost that same amount of dollars. 

Making Money with Forex in Lithuania

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There are a number of strategies and trading vehicles that you should know about when considering operating in the forex market, starting with those listed below. 

  • Short selling: Taking a position in which you have net sold the base currency in a currency pair because you think its exchange rate will decline. For example, if you want to go short the EUR/USD currency pair, you would establish a trading position in which you have sold the euro against the U.S. dollar. If you instead want to buy the euro against the dollar, then you could go long the EUR/USD currency pair. 
  • CFDs: Contracts for difference (CFDs) consist of contracts whose value depends on that of underlying assets and which lets traders avoid taking positions in the underlying market itself. Some online brokers let you trade forex CFDs, as well as CFDs on other assets like stocks, indexes and commodities.  
  • Binary options: Binary options consist of exotic derivative contracts that give the holder the opportunity to pay a fixed premium in exchange for a fixed payout if some specific market condition occurs on or before the option expires. The European Securities Market Authority, the regulator for financial markets in the EU, put in place “product intervention measures” that effectively ban brokers based in the EU from offering binary options trading to residents. As a result of these changes, traders based in Lithuania looking to trade binary options will probably need to find a binary options broker based outside of the EU. 

Best Online Forex Brokers in Lithuania

Forex traders in Lithuania and the EU have access to some of the best online forex brokers in the business. The retail forex market is well regulated and trading opportunities are numerous.  Choose from among brokers that are licensed by reputable regulatory bodies to avoid losing your margin deposit to fraud.

Account Minimum
100 of your selected base currency
Pairs Offered
80+
Get started securely through FOREX.com’s website
Account Minimum
100 of your selected base currency
Pairs Offered
80+
1 Minute Review

FOREX.com is a one-stop-shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker. You can’t invest in the stock or bond market through your FOREX.com and you cannot open an account with tax advantages. The confusing pricing and margin structures may also be overwhelming for new forex traders.

Best For
  • MetaTrader 4 users
  • Beginner forex traders
  • Active forex traders
Pros
  • Impressive, easy-to-navigate platform
  • Wide range of education and research tools
  • Access to over 80 currencies to buy and sell
  • Leverage available up to 50:1
Cons
  • Cannot buy and sell other securities (like stocks and bonds)
  • Confusing margin requirements that vary by currency
  • Limited customer support options
  • Cannot open an IRA or other retirement account
Commissions
$10 value per pip
Account Minimum
$0
Get started securely through IG Group’s website
Commissions
$10 value per pip
Account Minimum
$0
1 Minute Review

IG is a comprehensive forex broker that offers full access to the currency market and support for over 80 currency pairs. The broker only offers forex trading to its U.S.-based customers, the brokerage does it spectacularly well. Novice traders will love IG’s intuitive mobile and desktop platforms, while advanced traders will revel in the platform’s selection of indicators and charting tools. Though IG could work on its customer service and fees, the broker is an asset to new forex traders and those who prefer a more streamlined interface.  

Best For
  • New forex traders who are still learning the ropes
  • Traders who prefer a simple, clean interface
  • Forex traders who trade primarily on a tablet
Pros
  • Easy-to-navigate platform is easy for beginners to master
  • Mobile and tablet platforms offer full functionality of the desktop version
  • Margin rates are easy to understand and affordable
  • Access to over 80 currency pairs
Cons
  • U.S. traders can currently only trade forex
  • Customer service options are lacking
  • No 2-factor authentication on mobile
Account Minimum
$50 USD
Pairs Offered
47
Get started securely through eToro’s website
Account Minimum
$50 USD
Pairs Offered
47
1 Minute Review

Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).

eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.

Best For
  • International Forex/CFD Traders
  • New cryptocurrency traders looking for an easy-to-use platform
  • Traders who want to buy and sell cryptocurrencies on-the-go
Pros
  • Simple platform that is easy to master
  • CopyTrader feature that allows new traders to copy the same strategies used by professionals
  • Virtual dummy account that gives you $100,000 to practice trades
Cons
  • U.S. traders currently limited to cryptocurrencies
  • Only 15 major coins available to trade
Account Minimum
$100 USD (or equivalent)
Pairs Offered
69
Get started securely through HYCM’s website
Account Minimum
$100 USD (or equivalent)
Pairs Offered
69
1 Minute Review

HYCM is 1 of the world’s leading forex brokers, offering investors access to over 69 unique currency pairs. However, forex isn’t the only thing the broker offers — HYCM also offers high rates of leverage, stock and ETF trading, commodity investing and much more. Getting started with HYCM is quick and easy, and most investors can open an account in as little as 10 minutes.

HYCM offers a varying fee structure, which allows investors to choose the spread option that’s best for them. A wide range of educational and investing tools are available, which can be equally beneficial to both experienced and novice traders. Though HYCM isn’t currently available in the United States, it can be a great choice for residents of the other 140 countries where it offers service. 

Best For
  • Investors who want a customizable fee schedule
  • Traders comfortable using the MetaTrader platform
  • Islamic traders who need swap-free accounts that don’t build interest
Pros
  • Wide range of currency pairs available
  • Excellent selection of educational tools
  • $0 deposit and withdrawal fees
Cons
  • Not currently available to traders based in the U.S.
Account Minimum
100 EURO
Pairs Offered
50+
Get started securely through AvaTrade’s website
Account Minimum
100 EURO
Pairs Offered
50+
1 Minute Review

A fully regulated broker with a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan, Avatrade deals with mainly forex and CFDs on stocks, commodities, indexes, forex, cryptocurrencies, etc. This brokerage is headquartered in Dublin, Ireland and began offering its services in 2006. It offers multiple trading platforms and earns mainly through spreads.

Best For
  • Beginners
  • Advanced traders
  • Traders looking for a well-diversified portfolio
Pros
  • Controlled by regulatory agencies of multiple countries
  • Choice offered in terms of trading platforms
  • Support available in 14 languages and trading platforms in 20 languages
  • Practice/demo account available for trying out
  • Breadth of trading assets
Cons
  • Does not accept customers from the U.S. as it isn’t regulated in the U.S.
  • Transferring funds to the account may take up to five days; withdrawals could take up to 10 days

Forex Terminology

It makes sense for most traders to learn the basic jargon of the currency marketplace before starting to operate in the market. 

  • Pip: Stands for “percentage in point” and is the minimum movement in an exchange rate of a particular currency pair. Corresponds to a shift of 0.0001 for most pairs. 
  • Lot size: A standardized unit for trading. The standard lot size at most online forex brokers is 100,000 base currency units. 
  • Orders: Instructions to a broker that detail the specifics of a trade you want to make so that they can execute it on your behalf.
  • Calls: Derivative option contracts that give you the choice to buy an asset at a specific price on or before a future expiration date, although you don’t have the obligation to do so. Puts, on the other hand, give you the right to sell an asset. Because of the nature of currency pairs, where the underlying asset consists of an exchange of currencies, currency options are all both calls and puts. 

Is Trading Forex from Lithuania for You?

The Lithuanian economy is growing steadily, in part because of its inclusion in the Eurozone, and residents of the country have the security of using a major currency like the euro. Forex trading is available to residents of Lithuania, so you should be able to find an online broker who will take you on as a client. 

While learning how to trade forex may seem relatively easy, profitably trading forex currency pairs can take a lifetime to master, so trading in a demo account to develop a consistently profitable trading strategy makes sense before putting real money at risk. For more information about forex trading, bookmark our website. We pride ourselves on bringing you actionable and up-to-date advice relevant to forex traders.

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