The Best Forex Brokers in Portugal
The Republic of Portugal, a nation with 10.3 million inhabitants, is a member of the European Union (EU). As with many other EU members, its economy went into recession during the Covid-19 pandemic but has recovered nicely to pre-Covid conditions. According to the OECD, GDP growth is forecast to rise by 2.5% in 2023, after modest growth of 6.7% in 2022.
Forex trading in Portugal is popular, and nearly 40,000 traders are active in the market today. Portugal is a small country with a burgeoning middle and wealthy class that is well-informed when it comes to investing. When the Covid lockdowns occurred in 2020, many individuals actively searched for new ways to earn income from home, and forex trading became a logical choice for many Portuguese residents.
The global brokerage community has also shown interest in this market. In this article, you will learn about the legality of forex trading in Portugal, how this activity is regulated, how to get started, and who the best forex brokers in Portugal are today.
Is it Legal to Trade Forex in Portugal?
As it is a member of the EU, forex trading is legal in Portugal. Rules and regulations follow the dictates of the European Securities and Markets Authority (ESMA). The actual law that establishes the rules and regulations across the EU is the Markets in Financial Instruments Directive (MiFID II). This directive also states that any broker licensed to operate by a regulatory body within the EU may solicit customers in any other EU member state.
Forex Regulation in Portugal
The regulatory body responsible for administering these regulations in Portugal is the Comissao do Mercado de Valores Mobiliarios, or CMVM for short. The CMVM presides over all financial markets in Portugal and is regarded in the industry as a regulator in a Tier-1 jurisdiction, on par with BaFIN in Germany and CySEC in Cyprus. Its licence adds credibility since the agency is strict in its enforcement of ESMA guidelines.
How to Start Forex Trading in Portugal
Trading foreign currency pairs can be fun and exciting, but the activity is high risk. If you are new to this trading medium, there is a recommended process for starting out before putting any real capital on the line. We have summarised this getting-started process in forex trading in the following five steps:
- Build Awareness – The world of forex is complex and high-risk, so specialised training is essential to understand the hazards involved. First, build a level of understanding of the terminology and what is required to win at this game. We can help you with many insightful articles. Your objective is to develop a strategy that will guard against risks and tilt the odds in your favour to realise a consistent winning percentage.
- Select Your Broker – To access the forex market, you will need a reliable broker that performs at a high level. Your best bet is to choose a heavily regulated broker in the EU or the UK. The selection process can be daunting, but we have done the heavy lifting by providing a list of the best brokers in the next section.
- Open and Fund a Trading Account – Each broker presented below will direct you to a registration process to open an account and give you access to a free demo trading system. The documentation procedures are dictated by international law. When it comes time to fund your account, choose the method that works best for you.
- Invest Hours in Practice Trading – There is no substitute for experience. Veterans will tell you that their success is due to hours of practice trading on a demo system. Take the time to develop a strategy that works for you. We can help with our articles about forex strategy.
- Open Your First Position – Start with the “EUR/USD” pair. Establish a small position based on your entry strategy. Monitor your progress and close your position. When confident, you may broaden your activity as you deem appropriate.
The Best Forex Brokers in Portugal
When selecting a broker to be your business partner, choosing a regulated broker with an excellent track record and a solid reputation established over the years is always best. With so many brokers to consider, the task can seem overwhelming. To help you, we have compiled this list of the best forex brokers in Portugal as a guide.
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Trading foreign currency pairs in Portugal is legal and growing in popularity. The CMVM, the local financial regulator, has licensed several brokers to operate locally; however, several other qualified brokers comply with EU regulations and can serve your needs. Getting started is an easy 5-step online process, and within minutes, you can begin your journey in the exciting foreign exchange trading market.