How to start trading in the Baltic states

  • 2024-05-10

The Baltic states are rapidly becoming a hub for European forex trading. Their robust economies, coupled with strong regulatory frameworks, are attracting a growing number of traders, both seasoned and new. This guide will equip you with the knowledge and steps you need to take to confidently begin your forex trading journey in this exciting region.

Understand the regulations

Before diving into the world of forex trading, it’s crucial you familiarise yourself with the regulatory landscape. 

Each Baltic state has its own financial authority overseeing forex brokers: the Estonian Financial Supervision Authority (EFSA), the Bank of Lithuania, and Latvia’s Financial and Capital Market Commission (FCMC)

These authorities hold brokers accountable for adhering to regulations, so choose a broker licensed by one of these bodies to ensure you're trading with a legitimate and compliant company. 

In accordance with EU regulations, brokers in the Baltic states can only offer up to 30:1 leverage for major currency pairs, helping protect you from losing too much money quickly. Bear this in mind to spot untrustworthy and stay safe against scams.

Select a broker

The next step is to consider the different brokers you might like to work with. While there’s a limited number of brokers local to the Baltic states, there are plenty of international firms like Tradu offering services to Baltic investors

In addition to making sure that the brokers you choose from are licensed by a recognised authority, you should consider:

- Experience level: Intuitive platforms with clear layouts are well suited to beginners, while more advanced platforms typically cater better to seasoned traders.

- Product offering: Not all brokers offer the same currency pairs, so make sure you choose one that offers the pairs you're interested in, such as the EUR/USD, GBP/USD, or EUR/NOK.

- Commissions and Spreads: Brokers typically charge fees in the form of commissions or spreads. You should compare fees across different brokers to find the most cost-effective choice for you.

- Customer Support: Reliable customer support is essential, so look for brokers offering multiple support channels, such as live chat, email, and phone lines.

By carefully evaluating these factors, you'll be well-equipped to select a broker who aligns with your trading goals and provides the tools you need for success.

Develop a strategy

A well-defined trading strategy is your roadmap to navigating the markets. After outlining your trading goals, you’ll need to learn how to use technical and fundamental analysis to inform your decisions. 

As with any financial endeavour, forex trading carries inherent risks. It’s crucial you learn how to manage them effectively by using tools like stop-loss orders before you make your first trade. You should also learn forex risk management principles like never investing more than you can afford to lose, so you can have peace of mind that your trades aren’t jeopardising your financial security.

As a beginner, it's wise to centre your strategy around smaller trades, as this will allow you to manage your risk and gain experience before venturing into larger trades. Then you can gradually increase your trade sizes as your confidence and competence grow.

If you want an even safer way to start trading, most brokers offer demo accounts with virtual funds you can use to test your strategies, get comfortable with the platform, and develop your skills before risking real capital.

Getting started in the Baltic forex market 

The Baltic states offer a well-regulated environment in which to begin forex trading. After reading this article, you should have more of the foundational knowledge you need to enter the Baltic forex market with a calculated and confident mindset. While the allure of forex trading can be strong, remember it's not a get-rich-quick scheme. Success requires dedication, continuous learning, a well-defined strategy, and most importantly, responsible risk management.