Finland boasts 1 of the richest economies in Europe, but the Finnish economy is set to contract by 1.5% to 5.5% in 2020. Experts predict a fast recovery with 2021 seeing expansion again around 4%.
The economic contraction doesn’t bode well for the Finnish forex market. Finland currently has no in-country forex brokers. However, Finnish forex investors enjoy the regulation of the Finnish Financial Supervisory Authority (FIN-FSA), which collaborates with the European Central Bank and the Bank of Finland to ensure an equitable trading environment.
Still interested in trading forex in Finland? Take a look at our guide to get started.
Get Started with Forex in Finland
The fact that Finland has no forex brokers within its borders does not stop you from trading. You can access the market through an offshore broker. Consider the following tips to ensure your financial safety:
- Your web connection: Finland’s infrastructure is 1 of the best in the world, so you should have no trouble finding and maintaining a good web connection.
- Your forex broker: choose a broker regulated through 1 of Europe’s many financial authorities. All national regulators are licensed through the Markets in Financial Instruments Directive (MiFID) and maintain compliance to MiFID rules.
- Your bank connection: connecting with an MiFID accredited broker ensures your money is protected from broker bankruptcy. You still need to check the individual broker for deposit and withdrawal reliability. Brokers must also keep your money separate from theirs. Check the terms of service to make sure.
- Your funding source: with a reputable broker, you can feel confident putting money into your investment account through your bank, debit card or fintech app.
- Your forex trading interface: choose a trading interface that works with your preferred devices. If you have a home setup with 4 screens, you may be able to work with a more sophisticated setup. If you like to trade from your phone, you need simplicity.
- Your investment strategies: with your setup personalized to you and properly regulated, you can begin to invest properly in the forex market.
Finnish Forex Trading Strategies
Learn your personal trading style if you want to trade forex successfully. Your personality plays into your success just as much as your research and investment strategies.
Day trading is for people who don’t mind high-frequency, lightning-fast trading that occurs in a matter of minutes or even seconds. You’ll need to learn how to read charts in real time, which will require an excellent internet connection.
Day traders are usually looking for the 1st opportunity to profit from a trade, and this window of opportunity may only last a few seconds. Day traders also consume information in real time. Make sure your broker has access to the appropriate news feeds.
Swing traders use the price charts like day traders, but swing traders usually let a position develop over a longer period. In many cases, the shape of the chart will resemble a swing because of a price reversal. Swing trades last from hours to weeks. The frequency of these traders are lower, but investors may open multiple trades at once.
Positional investing uses short-term charts much less than day trading and swing trading. Positional investing is about the actual position of the currency as opposed to its value. When these 2 things are misaligned, long-term investors can profit as the currency corrects itself. Corrections take time, so positional investors may hold a position for months or years.
Forex Trading Example in Finland
1.1210/1.1250 is the EUR/USD bid/ask price. You want to order €30,000. The margin rate is 4.07%, so your broker will let you buy a full €30,000 investment with $1371.18 cash in your account.
After 5 hours, the EUR/USD bid/ask price has risen to 1.1270/1.1310. This 20-point move gives you a total profit of (€30,000 x 1.1270) – (€30,000 x 1.1250) or $60.
Making Money with Forex in Finland
Now that you have matched your personality to your trading style, you can think about the actual strategies you will use to profit in the forex market. Here are a few of the best:
- Short selling: Because the euro is a strong currency, Finnish investors can make money selling currencies against it. When the other currency falls, the short seller profits.
- CFDs: Contracts for differences let an investor trade currency without owning it.
- Binary options: A yes or no investment option that ideally simplifies the process of investing.