Forex trading in Romania is regulated and legal. Though Romania doesn’t have the largest forex market in Europe, growing access to the market through international brokers has made it easier than ever before to trade forex. If you’ve ever been interested in entering the forex market, our guide to trading in Romania will make getting started less complicated.
Get Started with Forex in Romania
You’ll need to open an account with a forex broker before you can trade forex. Thankfully, there are many different forex brokers in Romania that offer access to margin trading and nearly every country’s currency. Here’s how you can get started by opening your first account:
- Step 1: Connect to the internet. The most important tool that a forex trader can have at their disposal is a solid, stable internet connection. Run a speed test on your device of choice before you open your account.
- Step 2: Choose a broker. All brokers operating in Romania must submit to a number of regulatory bodies, including the Financial Supervisory Authority. Research each broker’s licensure status, fees and available currencies before you open an account.
- Step 3: Download a trading platform. Your broker may offer a proprietary platform or you might need to download a 3rd-party trading platform like MetaTrader 4 before you can get started. Check and see which platforms your broker supports before you download a trading platform.
- Step: 4: Fund your account. After your account has been opened in full, you’ll need to add trading funds. Most Romanian brokers allow you to fund your account using a debit card, direct bank transfer or transfer from an electronic wallet service like Skrill or PayPal. It may take a few days for your funds to clear before you can see them in your brokerage account.
- Step 5: Make your first trade. As soon as your funds clear, you can place your first forex trade.
Romania Forex Trading Strategies
Though Romania is a member of the European Union, the country still uses the Romanian leu as its base currency. The leu shows more volatility than reserve currencies like the U.S. dollar and the euro. Forex traders often take advantage of this volatility by using a technical analysis-based strategy.
Technical analysis is a type of currency analysis that relies on the use of charts and patterns to predict how the currency will move in the future. Traders who use technical analysis as their primary trading strategy typically choose a select number of patterns and formations, allowing specific pattern formations to trigger “buy” or “sell” signals.
Let’s take a look at a few of the most common technical analysis strategies that Romanian traders use to capitalize on the leu’s volatility. Though these indicators aren’t guarantees that you’ll earn money trading, they can act as a solid basis around which you can form your own unique trading strategy.
A triple bottom pattern is a bullish indicator that establishes a lower resistance line and signals that the currency you’re trading may show a price trend reversal soon. To act as a true triple bottom, the formation must have an existing downtrend, establish 3 lows roughly equal in price and a significant volume drop as these lows are formed. When trading the triple bottom, you may want to execute up to 3 short-term trades or a single long-term trade, selling when the pattern is complete and the currency shows a new, bullish pattern.
Reversal candlesticks are formations that indicate that a currency may reverse its trend. A reversal candlestick can be bullish or bearish depending on its placement and strength. Most traders consider the length of a candlestick’s tail to be an indicator of how strong the signal is — the longer the tail, the more likely that the reversal candlestick will be confirmed.
Forex Trading Example in Romania
How does forex trading work exactly? Let’s take a look at an example of how you might be able to earn money by taking advantage of discrepancies between currencies.
You open an account with L10,000. Your broker offers you 10:1 leverage, which means that you can trade with the power of L100,000 despite only having L10,000 in your account.
You believe that the RON will fall in value in relation to the EUR, so you convert your entire lot of RON into EUR. The euro is currently trading at 1 RON to 0.21 EUR — when you use your entire leverage and initial deposit, you’ve left with 21,000 EUR.
A few days pass and you see that your assumption is correct — the value of the 1 RON has fallen to just 0.20 EUR. You decide to convert your entire lot of EUR back to RON, which leaves you with L105,000. On this trade, you’ve made a profit of L5,000 by strategically converting your currencies when the value of the RON was set to fall.
Making Money with Forex in Romania
Earning money by trading forex in Romania is completely legal and there are no limitations on the amount of profit that you can take from your trading. The forex trading market of Romania is also exceptionally well regulated when compared to other developing nations. Every broker legally operating in Romania is required to register with the Financial Supervisory Authority (ASF in Romanian). The ASF is responsible for fighting against market manipulation and ensuring that every broker’s credit rating is high enough to ensure that the brokerage firm has enough money to refund all traders’ deposits should the broker go out of business.
Romanian brokers are also subject to a wide range of trader protections under the European Union’s European Securities and Markets Authority. This authority directs EU trading activities, imposes a leverage cap on trading and investigates insider trading. Working together, these authorities greatly reduce the instances of forex scams both in Romania and throughout Europe.
There are a few steps that you can take to protect yourself and your capital when you trade. Be sure that your broker is registered before you open an account and be very mindful of your leverage usage. You should also keep careful records of your profits and the amount of money you move on each trade so you can accurately report your income during tax season.
Best Online Forex Brokers in Romania
The forex broker you choose will determine which currencies you have access to, how much you’ll pay to trade, which trading platforms you can use and much more. If you aren’t sure where you’d like to open an account, consider a few of our top choices below.
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.
- MetaTrader 4 users
- Beginner forex traders
- Active forex traders
- 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
- Cannot buy and sell other securities (like stocks and bonds)
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.
- Advanced traders
- Traders looking for a well-diversified portfolio
- 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
- 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
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.
- 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
- 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
- U.S. traders currently limited to cryptocurrencies
- Only 15 major coins available to trade
Understanding the unique terminology used by forex traders and brokers will give you an advantage when planning your trades and doing your research. Here are a few of the most common terms you’ll hear when you trade forex:
- Pip: A pip is the smallest unit by which a currency can change in value. In most cases, 1 pip is equal to 0.0001 of any currency’s value. The only exception to this is the Japanese yen, which is rounded to 2 decimal places.
- Lot size: Your lot size is the number of units of any currency you’re buying or selling. For example, if you decide to sell L10,000, your lot size is equal to 10,000. Most forex traders consider 100,000 units to be a “standard lot.”
- Orders: When you place an order through your broker, you tell your broker how many units of currency you want to trade, the price the order should be executed at and which currencies you want to exchange. There are multiple different types of orders, and each order type presents its own challenges and advantages when it comes to liquidity and loss prevention.
- Call: A call (or a “margin call”) is a risk that comes along with using leverage to trade. If your forex portfolio falls below a certain percentage of its original value when using leverage, your broker will subject you to a call. When you receive a call, you must deposit more capital into your account in order to maintain your position.
Getting Ready to Make Your First Trade
Though forex trading in Romania is safe and well-regulated, this doesn’t mean that you’re guaranteed to make money exchanging currencies. Be sure to practice your trading strategy using a demo account or paper trading account before you invest. This will help you avoid losses while also sharpening your skills before you enter the market with real money.
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 plus spot metals 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.
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