Forex Trading in Albania • Forex Strategies

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Albania is quickly gaining access to the forex market as an upcoming member of the European Union and a budding economy. As more and more forex brokers offer services in Albania, everyday residents and travelers now have the opportunity to make a profit exchanging currency.

Our crash-course on beginner forex trading will help you enter the market safely if you’d like to learn more about how to trade forex in Albania.

Get Started with Forex in Albania

Trading forex starts by opening a brokerage account with a reliable, reputable broker. Let’s take a look at the basic steps you can expect to go through when you open a brokerage account and make your first trade:

  • Step 1: Connect to the internet. You’ll need to find a stable connection to the internet before you can open a forex trading account. Though you can trade on a variety of devices, your internet connection must be fast, stable and private.
  • Step 2: Choose a broker and open an account. As a trader in Albania, you can open an account with either a local domestic broker or an international broker offering access in Albania. Though the Central Bank of Albania is responsible for overseeing brokerage firms, the regulatory body is currently in a transitional period as Albania prepares to join the European Union. This means that not every broker you’ll encounter is registered. Be sure to ask about regulatory status and oversight before you open an account.
  • Step 3: Download trading software. Depending on which brokerage you choose, you might need to download a 3rd-party trading software like MetaTrader 4 or 5 before you can place a trade. Check your broker’s list of supported software options before you download.
  • Step 4: Fund your account. After your account has been opened in full, you’ll need to transfer trading funds using your method of choice. Most brokers in Albania support a variety of transfer methods, ranging from direct bank transfers to debit payments.
  • Step 5: Make your first trade. It might take a few days for your deposit to be cleared into your account. As soon as you see your funds in your account, you can officially place your first forex trade.

Albania Forex Trading Strategies

There are a wide range of trading strategies used by forex investors in Albania. Most traders categorize themselves based on how long they hold their positions. There are 3 major types of forex traders: short-term traders, medium-term traders and long-term traders. Let’s take a look at how your ideal trading strategy might change based on how long you want to hold your trades.

Short-Term Investing

Short-term traders typically use technical analysis to determine which currencies they should buy or sell. Technical analysis uses charting software and candlestick formations to predict future price movements based on previous patterns. Many short-term traders rely on “reversal candlesticks,” which indicate that a currency will quickly change in value. You might hold your position as a short-term trader for as little as a few seconds, capitalizing on many small price fluctuations throughout the day.

A reversal candlestick indicates that a currency will change its value trend. 

Medium-Term Investing

Traders who use a medium-term strategy typically take a more involved approach to their technical analysis. These traders typically look for longer-term pattern formations like the rounding bottom pattern or breakout pattern when identifying buy or sell signals. A medium-term trader might hold onto their positions for as little as a few days to as long as a few months depending on their currency and market conditions.

The rounding bottom pattern is commonly used by medium-term traders. 

Long-Term Investing

Long-term traders typically use a different strategy called “fundamental analysis” when doing their currency research. Fundamental analysis doesn’t look at charting patterns or minute-to-minute price movements. Instead, traders using fundamental analysis examine the underlying economic and political factors that influence a currency’s price movement. It’s normal for long-term traders to hold onto their positions for weeks or months on a single trade.

Long-term traders look at factors like GDP and unemployment rates when determining their investments.

Forex Trading Example in Albania

Forex traders earn money by taking advantage of currency fluctuations. They sell their base leks when they predict that the value of the lek will fall in the near future, then they sell their intermediary currency for a profit. Let’s take a look at an example.

Imagine that you believe that the value of the USD is going to rise in relation to the ALL in the near future. You open a brokerage account with a deposit of L100,000. Your broker offers you 10:1 leverage, which allows you to invest up to L1 million in your currency of choice. You decide to convert your entire lot and leverage to dollars.

L1 ALL is currently equal to $0.0092. When you convert your base currency into dollars, you’re left with $9,200. Soon, you see that the value of the ALL is falling in comparison to the USD; when L1 is equal to $0.0089, you decide to cash out. When you convert your ALL back to USD, you’re left with about L1.033 million. When you account for the money you borrowed in leverage, you made a profit of about L33,000 on this trade.

Making Money with Forex in Albania

It’s completely legal and possible to earn money forex trading in Albania. No matter if you’re a citizen or a traveler, there are no legal limitations on the amount of money you can deposit into an international brokerage account or convert into foreign currency. As long as you keep track of your trades for tax purposes, you can take as much profit as you can earn trading.

Albania is in a transitory period as it prepares to join the European Union. This means that financial and forex laws are likely to change rapidly throughout the upcoming years. For this reason, we recommend opening an account with an international broker with policies that follow the framework set forth by the Markets in Financial Instruments Directive. This directive helps harmonize regulations and leverage caps across EU countries, which Albania will be joining soon.

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