How to Start Forex Trading in Sweden

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Contributor, Benzinga
May 19, 2023

The forex market in Sweden is strong and well-regulated because Sweden is one of the wealthiest countries in the European Union (and the world). Use our comprehensive guide to get started if you’re interested in learning more about how you can trade forex as a resident of Sweden. 

Disclosure: 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 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.

Get Started with Forex in Sweden

As a trader, you cannot buy and sell forex currencies directly. Instead, you’ll need to open a special account with a forex broker that offers services to clients in Sweden. No matter which broker you choose, you’ll go through a very similar process when you open your account. Here’s how to begin:

Step 1: Find a Stable Internet Connection

Before you begin comparing brokers, be sure that your internet connection is stable, secure and private. You may want to run a speed test on your device before you begin to ensure consistency.

Step 2: Open a Brokerage Account

The forex broker you choose will determine what you pay in fees, which currencies you have access to and the tools you’ll use when trading. Don’t be afraid to “shop around” for a trading platform that fits your individual needs before you open an account.

Step 3: Download a Trading Platform

Depending on the broker you choose, you might need to download a 3rd-party trading platform like MetaTrader 4 or 5. Find out which platforms are compatible with your broker before you download a platform.

Step 4: Fund Your Account

As soon as your account is fully open, you’ll need to deposit funds before you can trade. Most Swedish traders accomplish this by directly linking their bank account and transferring money between their bank and brokerage accounts as needed. Many Swedish brokers also accept deposits made via debit card or electronic wallet.

Step 5: Place Your First Order

Once your deposit clears, you can officially begin placing forex trades. 

Step 6: Monitor Your Portfolio

Monitor your portfolio to ensure that it is performing well. Without careful monitoring, your portfolio may not give you the profits you’re looking for.

Sweden Forex Trading Strategies

Most Swedish traders use a strategy called technical analysis to determine which currencies to buy and sell. Technical analysis involves the use of charts and patterns to predict how currencies will change in value. Most traders who use technical analysis buy and sell currencies within a matter of hours or days, which allows you to take profits more quickly.

Let’s take a look at a few common trading strategies you can use to earn money while trading forex. Though these strategies aren’t guaranteed to earn money, they can provide an excellent basis for formulating your own unique trading strategy.   

Breakout Strategy 

The breakout trading strategy is an excellent strategy for beginners because it doesn’t involve complex math or formulas. Traders who use the breakout strategy trade during periods of low volatility, when their base currency is moving in a sideways pattern. These traders look for candlesticks that break out of the standard sideways range, which may indicate a change in the direction that the currency moves and triggers a buy or sell signal.    

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Head and Shoulders Trading Pattern

The head and shoulders trading pattern is a charting pattern characterized by a baseline and 3 subsequent peaks. The charting pattern gets its name from its visual similarity to a neck and a pair of shoulders, with the highest peak located in the middle.

Traders who trade the head and shoulders pattern often wait for the pattern to begin forming, then use the formation of the head and final shoulder as a bearish indicator. You may want to execute 2 or more trades in a short period of time and sell your lot before the pattern is completely formed. 

Reversal Candlesticks

A reversal candlestick is a charting formation that indicates that a currency is likely to reverse directions. Reversal candlesticks may be bullish or bearish depending on their placement and form. Traders who search for reversal candlesticks often wait for a confirmation candlestick after the reversal signal is triggered to ensure that the direction will really change. The length of the candlestick’s tail is often considered to be an indicator of how strong the reversal signal is.  

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Forex Trading Example in Sweden

Forex trading is completely legal in Sweden and Swedish traders have very few limitations on the amount of profit that you can earn exchanging currencies. But how exactly does forex trading work? Let’s take a look at a practical example of how you might earn money exchanging currencies at strategic times.

Imagine that you believe that the value of the Swedish krona will fall in relation to the euro. Because of this, you decide to deposit 10,000 kronor into your forex broker account. Your broker also offers you 10:1 leverage, which allows you to invest 100,000 kronor despite only having 10,000 kronor in your account. You convert your entire lot of krona to EUR, which is currently trading at a rate of 1:0.095. This leaves you with a total balance of 9,500 euros.

Soon, you see that the value of the EUR is rising, and 1 SEK is now equal to only 0.092 EUR. You decide that now is the time to sell, so you convert your entire lot of 9,500 euros back to Kronor. This leaves you with a total of about 103,261 kronor. After accounting for the leverage you used and your initial investment, you profited about 3,261 kronor on this trade. 

Making Money with Forex in Sweden

It’s legal and safe to earn money when forex trading in Sweden. Though Sweden doesn’t use the euro as its base currency, the country is still a member of the European Union. This means that traders enjoy protections from the EU’s Markets in Financial Instruments Directive.

The forex market in Sweden is also regulated by the “Finansinspektionen,” or the Financial Supervisory Authority of Sweden. The Financial Supervisory Authority of Sweden is a watchdog group that ensures that brokers offer margin and negative-balance protections to forex traders as required by law. Though both domestic and internationally based brokerages may operate in Sweden, all brokers must be licensed by the Financial Supervisory Authority of Sweden. This means that forex trading in Sweden is exceptionally safe compared to unregulated markets.

Though the Swedish currency market enjoys a high level of oversight, forex scams still exist. Be sure to ask about licensure status and thoroughly understand each broker’s fees and margin rates before opening an account. 

Best Online Forex Brokers in Sweden

Licensed brokers in Sweden allow you to trade forex safely and securely. Choosing the right broker can mean the difference between a profitable trading career and getting scammed. If you aren’t sure where to begin your brokerage search, consider a few of our top picks below. 

  • Axi
    Best For:
    MT4 Traders
    securely through Axi's website

    Over-the-counter derivatives are leveraged products that carry a high level of risk to your capital. Trading is not suitable for everyone and may result in you losing substantially more than your initial investment. You do not own, or have any rights to, the underlying assets. You should only trade with money you can afford to lose.

  • BlackBull Markets
    Best For:
    Lightning Fast Execution Speed
    securely through BlackBull Markets's website
  • Pepperstone FX
    Best For:
    Trading Experience
    securely through Pepperstone FX's website

    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.6% 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.

  • Forex.com NON US
    Best For:
    Forex Trading in and Outside the U.S.
    securely through Forex.com NON US's website

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% to 77.7% 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.

    The products and services available to you at FOREX.com will depend on your location and on which of its regulated entities holds your account

  • AvaTrade
    Best For:
    Non U.S. Forex & CFD Traders
    securely through AvaTrade's website
  • eToro Forex
    Best For:
    Copy Trading
    securely through eToro Forex's website

    CFD trading is not available to U.S. users. 51% 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.

  • IFC Markets
    Best For:
    Best for Leverage Trading from Canada
    securely through IFC Markets's website

Forex Terminology

The forex market has its own language, which forex traders use to talk about trades and execute orders. Familiarize yourself with a few of the most common international terms below before you make your first trade.

  • Pip: A pip is the smallest calculatable unit of currency. For most currencies, a single pip is valued at 0.0001 of that currency’s denomination.
  • Lot size: Your lot size is the total number of units of currency you’re buying or selling. For example, if you decide to sell 10,000 kronor, your lot size is 10,000.
  • Orders: An order is a set of directions you provide to your broker that lays out which currency you want to buy or sell, your lot size, the price that the order should be executed at and more. There are multiple types of orders, and you can combine more than 1 order type to limit your losses when trading.
  • Calls: A call is a risk of buying and selling currencies on margin. If your broker subjects you to a margin call, it’s usually because the value of your portfolio has dropped below a certain percentage of your original balance. If this occurs, you’ll be required to close out of your position or deposit more money into your brokerage account to compensate for the difference. Margin calls are one of the reasons why EU trading regulations limit the amount of leverage you can use when you trade. 

Master the Swedish Forex Market

Though the Swedish forex market is well regulated, this doesn’t mean that trading currency pairs comes without risk. It’s your responsibility as a trader to educate yourself and develop your trading strategy before you place your first order to buy or sell currency. Limit your amount of leverage and always perfect your trading strategy on a demo account before you begin trading in a live account with your brokerage of choice.  

Frequently Asked Questions

Q

Can forex investing help you make money?

A

Forex investing can help you make money, but you must research your investments and only spend money you can afford to invest.

Q

Are forex investments a good idea?

A

Forex investments are a good idea, but they only work out if you have done your research and spent wisely.

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.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.