Forex Trading in Israel

The Israel Securities Authority (ISA) oversees the domestic forex market as one of the leading tier-2 regulators. It enforces robust standards, including a maximum forex leverage of 1:100, negative balance protection, and strict segregation of client funds from corporate accounts to ensure trader security and market integrity.

What sets Israel apart is its blend of advanced fintech solutions and localized services. Both international and homegrown brokers cater to Israeli traders, offering platforms in Hebrew, tailored educational resources, and dedicated customer support. However, verifying a broker's regulatory compliance is crucial to avoiding potential pitfalls. For those ready to dive into forex trading, understanding Israel's unique market dynamics is key to unlocking its potential.

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Disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% to 76% 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.

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Needless to say, if you want to trade forex from Israel or with an Israeli brokerage, you should engage proper due diligence. The Israeli Securities Authority has issued guidance that it will hold forex companies to a higher standard of transparency, but the final responsibility falls on the individual investor.

Get Started with Forex in Israel

Get started investing in forex in Israel through the following steps:

1. Connect to the Internet: You improve your chances of success and protect yourself from bad actors through a solid internet connection. Your web connection ensures that you have timely access to your broker, trading interface and bank accounts.
2. Use Only Reputable Brokers: Vet your forex broker for compliance with international financial authorities. The decentralized nature of forex means that you can do business in the market with offshore brokers.
3. Connect Your Bank Account: It is usually easiest to fund your investment account from an outside bank account. Check the reviews of your broker and its internal policy to ensure that you can get your money out when you need to. Depending on your broker, you may also be able to fund it from a debit card or a credit card.
4. Fund Your Brokerage Account: After you have properly vetted your brokerage and connected your outside account, you are ready to fund your investment account.
5. Get a Trading Program: The trading user interface (UI) that you use is your direct connection to the market. Make sure this interface does not add any latency to your forex pipeline.
6. Begin Trading the Forex Market: You can begin trading safely in the forex market.

Best Forex Brokers in Israel

Israeli Forex Trading Strategies

Before drilling down into an individual strategy, you should learn the blueprints that successful investors use to trade forex. Here are the general outlines that traders around the world use.

High-Frequency Scalping

Scalpers are high-frequency traders who look for small profits on extremely fast trades. They often make use of automated bots to speed up the frequency and accuracy of trades, which may last for less than 1 second. If you choose high-frequency trading, you will be competing against large institutions with the most advanced investing setups in the world. Having a strong internet connection is very important because you will be making split-second decisions that involve very short windows of opportunity.

Swing Trading

Swing traders wait for discernible trends to develop in currency prices, taking advantage of patterns as they emerge. In many cases, the chart pattern will take on the appearance of a swing, thus the name of the trading strategy.

Attribution: Meetup – A trading range that a swing trader might buy and sell repeatedly

Swing trades take place over the course of weeks, days or hours. Investors may have multiple trades open at once with a different time frame on each trade. Identifying the type of trend that is developing is also important in correctly assessing a situation for profit. 

Positional Investing

Positional investors are long-term investors who may hold trades for months or even years at a time. They are also known as fundamental investors. Long-term investments are less informed through charts and trading indicators and much more informed by long-term economic and political policy. Investors will need to know the forward-thinking guidance of a country’s import/export balance, gross domestic product (GDP) expansion and other macroeconomic variables. Positional traders make their money identifying currencies whose value is out of position with their prices, hence the name “positional investor.”

Other Forex Strategies

After picking your overall investment strategy, you can begin thinking about the financial vehicle you prefer. Some of the most commonly used vehicles in forex investing include:

• Short Selling: If you are good at determining when a currency will fall in value, then you can make money short selling that currency.
• CFDs: Short for contracts for differences, CFDs allow brokers to trade investments that track currency prices without actually owning currencies. Be wary of the high leverage some CFD brokers offer — they can be devastating for an untrained investor.
• Binary Options: Binary options offer investors a yes or no proposition. They seem simple, but the Commodity Futures Trading Commission (CFTC) found that many Israeli forex scams are based in binary options trading. Be especially careful if you plan to do business with an Israeli binary options broker.

Forex Trading Example in Israel

NIS/USD is trading at 0.2940/0.2960, and you want to buy ₪50,000. This exchange rate seems low to you, and you believe it will rise rather quickly. You have a margin account with your broker which will allow you to control a ₪50,000 investment with $1,200.65 cash in your account at a margin rate of 8.14%. 

The new NIS/USD price after 5 hours of trading is 0.2980/0.3000, which corresponds to a 20-point move. Your total profit on the investment is (₪50,000 x 0.2980) – (₪50,000 x 0.2960), or $80.

Forex Terminology

Forex becomes easier to master once you know the important terminology:

• Pip: The smallest division of value and movement in forex, a pip is equal to $0.0001.
• Lot size: Defaulted at 100,000 currency units, the lot size is the size of the order you want to put in.
• Orders: The order is the description of the buy or sell.
• Calls: A call option is a contract for a future order that gives the buyer the option to execute it at a future date.

Scanning for the Scams

If something sounds too good to be true in forex, then it definitely is. Successful forex investors across the world have this in common — they all combine hard work, daily focus and logical strategies to give themselves the best chance of success. Scammers also have this trait in common — they rely on the ignorance of their marks above using financial sophistication. 

To keep up with the latest news and strategies concerning forex trading in Israel, be sure to bookmark this website. Nothing is guaranteed in investing. But you can definitely turn the odds in your favor in forex with solid research and up-to-date strategies.

Frequently Asked Questions