Forex Trading in Slovakia

Slovakia may not be the first country you think of when you imagine a forex trading hub, but it is certainly no slouch. Connecting to the retail forex market is as easy as connecting to the internet, and Slovakia has coverage from four pan-European operators. Since 2018, the country has been preparing for 5G and building out its banking sector with a wide variety of digital-only banks.

Here's what you need to know about trading Forex in Slovakia. Foreign exchange trading can be a profitable endeavor for you, but remember that foreign currencies are volatile and every country has a slightly different financial market.

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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: 123rf

The retail forex market has grown alongside the expansion of the country’s financial and technical infrastructure. Some experts argue that the decentralized nature of forex works especially well with digital finance because money can move and change forms quickly. With Slovakia taking an active role in banking, we can expect the forex market to continue its upward trajectory. However, exchange rates could dampen some sentiments. Make sure that your foreign exchange trading plan involves a look at the overall economic picture.

Get Started with Forex in Slovakia

There are plenty of reasons to get involved in the Slovakian forex market, but there are plenty of reasons to be careful as well. The NBS offers some protection, but it can’t catch every fraud. Here are some ways to protect yourself while trading forex in Slovakia.

1. Your web connection: The growing infrastructure in Slovakia makes it easier than ever to find a good internet connection. You’ll need 1 that can handle a broker, digital bank and trading interface at once.
2. Your broker: Your forex broker is perhaps the most important aspect of your digital connection to the market. Choose a regulated broker with a reputation for good customer service.
3. Your account: Set up your investment account with your broker after vetting it for the proper regulation. Your broker should provide features such as transaction guarantees and funds separation, among other protections for your money.
4. Your funding: If you have found a broker with the right money protections, you can begin funding that investment account. You can usually fund yourself through a bank, credit card or app.
5. Your trading interface: Your money and broker are set. All you need now is a way to connect your order book to the market. You do this through an interface, which can be provided through a broker or by a third party.
6. Your first trade: Begin with a virtual (fake money) account to test your digital chain. After that, you can begin trading in the foreign exchange space.

Slovakia Forex Trading Strategies

Attribution: The Slovakia Times

Now that you are safely set up with a digital chain in Slovakia, you can move into the strategies that will inform your daily market movements. 

Breakout trading: Breakouts literally break a pattern in a currency’s chart. Breakouts happen quickly and provide substantial moves in the price. Day traders often use the breakout to turn quick profits using a technique known as scalping.

Return to the mean: Moving around an average price is what a price does when it is in a range. Investors who find this average can often trade around it because the price will oscillate around it.

Retracement: This chart pattern provides a chance to profit from a temporary reversal in a long-term trend. They also offer a chance for an investor to “get in” on a trend that otherwise seems unstoppable.

Carry trading: If you hold a currency in the forex market overnight, they earn interest as though you were holding it in a commercial bank. Some currencies have higher interest rates than others. The carry trader knows how to profit from the differences in these rates.

Forex Trading Example in Slovakia

Imagine that EUR/USD is trading at 1.1310/1.1330. You think the price will go up, so you buy €64,000 with $2412.52 in your brokerage account. Your broker allows this because of the 3.33% margin rate on this currency pair.

EUR/USD is trading at 1.1350/1.1370 after a few hours. Your profit on a sell is (€64,000*1.1350) - (€64,000*1.1330) or $128, on the 20-point move.

Making Money with Forex in Slovakia 

Attribution: Vault.com

Your vision is now in place. You can start looking at the tactics and financial vehicles that will help you take advantage of the opportunities you see. Here are a few techniques to know.

• Shorting a market: You can play the long side or the short side of a currency pair. Playing the short side is also known as “shorting the market” and profits when you buy back a currency that you’ve borrowed money to sell 1st.
• Contract for differences (CFDs): Contrary to popular belief, you do not have to own a currency to trade it. The CFD is the financial vehicle you use to do this.
• Binary options: Binary options have a fixed choice and a fixed return on investment. You can only choose yes or no, and you either win or lose cleanly based on your choice.

Best Online Forex Brokers in Slovakia 

There are many forex brokers to choose from in Slovakia. Check out our recommended brokerages.

Forex Terminology

Give yourself the best chance of success in the forex market by learning the most important language that everyone uses.

Pip: the value of U.S. $0.0001, also known as the forex “basis unit”

Lot size: the size of the deal you want to trade

Orders: the full description of what you want to trade

Calls: a contract on a currency pair that you can either execute on a predetermined date or sell beforehand (hopefully at a profit)

Growing in a Growing Economy

The Slovakian government is ahead of the curve in its region in terms of banking. The infrastructure they are preparing is great for forex investors. If you want to learn the market from Slovakia, there has never been a better opportunity.

Plug yourself into a consistent flow of information so that you can more quickly identify opportunities in the market. Bookmark this page for the latest strategies and news in forex.