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Forex Trading in Spain

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As 1 of Europe’s top financial powerhouses, Spain offers forex traders both a strong base currency and a wealth of forex broker regulations to exchanging currencies. 

Are you curious about forex trading in Spain? Our guide to the Spanish forex market, regulations and more will make it easier to get started. 

Get Started with Forex in Spain

No matter which forex broker you choose, you’ll go through a similar process when you open an account. Let’s take a look at the basic steps you can expect to take when you open your 1st forex trading account.

  • Step 1: Find a stable internet connection. Forex trading often capitalizes on quick, minute-to-minute price movements. This means that a stable, consistent internet connection is the most important tool a trader can have. Test your internet connection and be sure that your connection is stable before moving forward.
  • Step 2: Choose a broker. You cannot buy and sell currencies directly — you must work through a broker to execute your trades on your behalf. The forex broker you choose will play a direct role in the currencies you have access to, the fees you pay and the platforms you can use. Be sure to take plenty of time to compare brokers before you choose where you want to open an account.
  • Step 3: Open a brokerage account. After you select a broker, open your account. You’ll usually be required to submit a bit of personal information and a scan of your photo ID before you can finish opening your brokerage account.
  • Step 4: Download your trading platform. Though some brokerages do provide a proprietary platform, you might also want to work with a 3rd-party platform like MetaTrader 4 or 5. Check and see which platforms your broker supports before you download.
  • Step 5: Fund your account. After your account is open, it’s time to fund your brokerage account. Most brokers in Spain support bank transfers, wire transfers and even credit card deposits.
  • Step 6: Place your 1st order. Once your account is funded, you can officially trade forex and place your 1st order. 

Spain Forex Trading Strategies

Most Spanish traders trade the EUR-USD currency pair when they get started forex trading. This is because both the euro and the dollar are considered to be safe reserve currencies, which means that fast price fluctuations are unlikely to cause you to lose excessive amounts of money in a short period of time.

Let’s take a look at a few of the most common trading strategies traders in Spain use to capitalize on price movements between the euro and the dollar. Though these strategies aren’t foolproof guarantees you’ll make money, they can provide a strong starting point to build your own trading strategy. 

Reversal Candlesticks

One of the 1st things traders look for when deciding when to buy or sell a currency is a reversal candlestick. When a reversal candlestick is triggered, it indicates that the general trend of a currency’s movement may change. A reversal candlestick might indicate a buy signal or a sell signal depending on its placement.  

Breakout Strategy

The breakout strategy is most commonly used by traders who trade when market volatility is the lowest. Traders using the breakout strategy look for periods when their currency pair is following a sideways pattern. They track this pattern until a “breakout” candlestick forms — that is, a candlestick with boundaries that go outside of the standard pattern. This breakout candlestick may indicate the beginning of a trend movement, which may act as a buy or sell signal depending on its form.   

Forex Trading Example in Spain

How exactly does forex trading work — and is it really possible to make money on the forex market? Let’s take a look at a basic example of how you might earn money trading forex as a resident of Spain or a traveler.

Imagine that you open a brokerage account and fund it with €10,000. Your broker offers you 10:1 leverage, which means that you have the power to trade with €100,000 if you choose to use it.

You believe that the value of the USD will rise in comparison to the EUR soon. You use all of your leverage to convert your EUR to USD, which is currently trading at a rate of 1:1.12. This means that when you use all of your capital and your leverage, you’re left with $112,000 USD.

A few days later, you see that you were correct — 1 EUR is now worth only 1.09 USD. You decide that now is the right time to convert your entire lot of USD back to your base currency. After your conversion, you’re left with about €102,752 EUR. After you account for what you borrowed in leverage, you made a profit of about €2,752 EUR on this transaction. 

Making Money with Forex in Spain

It’s legal and safe to earn money trading forex in Spain. Spanish traders are at an advantage over traders in other countries because the Spanish forex industry is well-regulated. Spanish investors enjoy protections from the Comision Nacional del Mercado de Valores and the Ministry of Economy and Finance of Spain as well as the Markets in Financial Instruments Directive that controls the forex markets of the European Union. 

The euro is also an exceptionally strong base currency, as the world’s second most popular base currency. This means that the euro showcases a stronger sense of liquidity and maintains its value well when compared to other currencies.

There are a few steps that forex traders should take to protect themselves when trading for the 1st time. Be sure that you only work through a licensed broker — though Spain enjoys a very high level of oversight, forex scams do still exist. You should also be very careful when using leverage, especially when trading minor currency pairs.

Best Online Forex Brokers in Spain

When you trade forex, you’ll place your orders through a licensed broker. The broker you choose will make a major impact on the amount you pay when you trade — so it’s worth taking the time to interview a few brokers before you choose which 1 is right for you. If you aren’t where to begin, consider a few of our favorite brokers below. 

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 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
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
Commissions
$0.02 per share
Account Minimum
$200
Get started securely through Pepperstone’s website
Commissions
$0.02 per share
Account Minimum
$200
1 Minute Review

Pepperstone is an Australian broker focused on providing international forex, CFD and cryptocurrency trading. Though U.S. traders currently cannot open an account with Pepperstone, the broker remains an affordable and comprehensive option for international traders. 

Pepperstone offers traders access to over 61 forex markets, over 60 CFDs for index funds and stocks and 5 cryptocurrencies. Leverage options with Pepperstone are extensive; you may qualify for up to 500:1 leverage when trading currencies and up to 5:1 leverage when trading cryptocurrencies, for example.

There are a few areas where Pepperstone can afford to improve. We’d love to see Pepperstone add its own trading platform in the future instead of relying entirely on 3rd-party platforms. We’d also love to see direct stock and fund purchase options in the future. Despite these flaws, Pepperstone remains a very strong choice for international traders.

Best For
  • International traders interested in trading CFDs from foreign markets and currencies
  • Traders who are already familiar with the MetaTrader or cTrader platforms
  • Traders who are looking for leverage when trading cryptocurrencies
Pros
  • Access to over 61 forex pairs and over 60 stock CFDs
  • Leverage available for both forex and cryptocurrency trading
  • Wide range of educational tools and courses that both beginners and experts can use
  • 24/7 customer service
Cons
  • Not currently available to U.S. traders
  • No option to purchase stocks, bonds or mutual funds directly; only CFDs are available
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

Understanding a bit of the unique language that forex brokers and traders use when discussing the market can make it easier to execute profitable trades. Here are a few of the most common forex trading terms you’ll hear when you trade currencies.

Pip: a pip is the lowest possible denomination of any currency. In most cases, 1 pip is equal to 0.0001 of the currency’s value. For example, if the USD moves in value from 1.0000 to 1.0001, we’d say that the currency has moved by the value of a single pip.

Lot size: your lot size is the total number of units of any currency that you’re trading on a single order. For example, if you’re converting $100,000 USD into the equivalent in Japanese yen, your lot size is equal to 100,000.

Orders: an order is a specific set of instructions you provide to your broker in regard to the currency you want to buy or sell. Your order tells your broker how many units of currency you want to buy or sell, the price point at which you’re buying or selling and when the order should be executed.

Calls: if you use leverage to trade, your broker might subject you to a “margin call” if your lot value drops below a certain percentage of its original value. If you receive a margin call, you must deposit more money into your brokerage account in order to maintain your position. Margin calls can quickly wipe out any profit you make forex trading — so be very careful when using leverage to trade. 

Take Your 1st Steps Into Forex

With more than $5 trillion moving in and out of the market on a daily basis and near around-the-clock availability, there’s little question why forex trading is so popular. However, this doesn’t mean that you’re guaranteed to make money forex trading — especially as a 1st-time trader. Be sure to practice your trading strategy using a demo account or paper trading account before you invest any of your own money.  

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