Forex‌ ‌Trading‌ ‌in‌ ‌Poland‌

Forex trading has gained popularity worldwide, and Poland is no exception. With advancements in technology and the accessibility of online trading platforms, more Polish investors are exploring the potential of the forex market. However, before diving in, it's crucial to understand the legal framework, regulatory environment, and best practices for trading safely in Poland.

This article provides an overview of forex trading in Poland, explaining the role of the Polish Financial Supervision Authority (KNF), key regulations, and essential tips to help both new and seasoned traders navigate the Polish forex market confidently.

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Getting Started with Forex in Poland

Follow these six steps to get started with forex trading in Poland:

• Ensure a Reliable Internet Connection: Access to a stable internet connection is essential for trading, especially if you use an offshore broker. In Poland, finding a reliable internet connection should be straightforward, but it’s crucial to have consistent access to manage trades effectively.
• Select a Fully Regulated Broker: In Poland, forex brokers are regulated by the Polish Financial Supervision Authority (KNF), or by other EU regulators. Choosing a regulated broker helps protect your investments and ensures compliance with Polish and EU laws.
• Link Your Bank Account: Choose a broker that offers low transaction fees and fast processing. Make sure your bank’s digital infrastructure integrates well with the broker, allowing for smooth deposits and withdrawals.
• Fund Your Trading Account: Reputable brokers will allow funding from Polish bank accounts, fintech apps, or debit cards, so you can deposit funds securely and start trading.
• Pick Your Trading Platform: Look for a trading platform that provides mobile access and meets your needs for ease of use, so you can monitor and manage trades even on the go.
• Start Trading in the Market: With a secure setup and access to the forex market, you’re ready to make informed trades and explore the potential of forex trading in Poland.

Best Forex Brokers in Poland

Online forex brokers let you trade a variety of currency pairs in the market. You can easily manage your trading positions on the trading platforms the brokers support. Most of these forex brokers allow you the luxury of 24-hour trading commission-free, although you will typically need to pay away the dealing spread whenever you trade.

Polish Forex Trading Strategies

Forex traders from all over the world rely on a few simple strategies to profit from exchange rate movements. You can consider using one or more of these forex trading strategies to trade on the currency market.

News Trading

Global economic news and events can have a strong impact on the forex market. Many traders stay on top of influential financial information to anticipate short-term exchange rate movements of affected forex currency pairs and related forex prices. 

You can research when information about inflation rates, trade policies and multinational deals made between countries will be released. News trading needs fast reflexes, a good broker with minimal order slippage and an understanding of how event outcomes might affect the currency pair traded. You also run the risk of missing the window of opportunity if you’re not fast enough with your trade executions. 

Day Trading

Day trading often involves closely monitoring the intraday exchange rate movements of forex currency pairs and generally only holding positions within a single trading session. These trades can take place anytime during the day, although all positions are typically exited on the same day. Some traders have adopted this method to reduce losses from overnight market volatility when they cannot watch the market. 

Day traders might adjust their positions several times during a trading session depending on how the market moves, so you will need to have sufficient free time available to operate the day trading strategy you select. 

Scalping

Scalping is a very short-term trading strategy that involves quickly entering and exiting the market aiming for small profits. The goal is to make many of those small profits add up to a sizable income. 

Rapid price movements during intraday trading sessions can cause slippage on your stop-loss trade executions. These losses can significantly erode any profits you might make scalping.  This method of trading requires a lot of time and focus to track exchange rate movements and high-risk events. Scalping will probably not be suitable for traders with a full-time job. 

Momentum Trading

Momentum trading or swing trading generally involves engaging in short to medium-term trading activities directed by reversals in market momentum signaled by technical indicators. 

This method of trading can be less stressful than day trading or scalping, although swing traders often do take overnight positions. You can adjust your long and short positions throughout the week to cut losses and take profits as your preferred indicator signals and/or your trading plan dictates. 

Forex Trading Example in Poland

The Polish zloty (PLN) is 1 of the various national currencies still in use within Europe in addition to the EU’s euro. Although Poland committed to adopting the euro in 2004 when joining the EU, many Poles still oppose that, and a firm date has yet to be set when that will happen. 

The EUR/PLN forex currency pair is currently trading at 4.4079. It will cost you 4.4079 zlotys to buy a euro. You could go long  €100,000 against the PLN based on the margin in your trading account. After 3 months, the EUR/PLN exchange rate might have risen to 4.6000. You can immediately sell your long €100,000 EUR/PLN position and show a profit of 19,210 zlotys in that time frame. Alternatively, if the market fell to 4.2500 instead, you would lose 15,790 PLN. 

Forex Terminology

You should be familiar with a few basic forex terms before you start trading. Many forex traders use these terms regularly during intraday trading sessions. 

• Pip: The smallest unit of movement in a currency pair’s exchange rate. Most forex currency pairs are quoted to the 4^th decimal point or 0.0001. 
• Lot Size: A standardized trading amount, which is usually 100,000 base currency units at most online forex brokers. You can trade smaller lot sizes as well at many brokers.
• Orders: An order is a command made to your broker to execute a trade. When you want to go long on a forex currency pair, you enter an order to buy the base currency and sell the counter currency. When you want to go short on the pair, you enter an order to sell the base currency and buy the counter currency. 
• Margin Calls: A notification from a broker to deposit additional funds in your trading account. Most online forex brokers will automatically close out all trading positions if the available margin in your account is insufficient instead of issuing a margin call. 

Getting into the Forex Trading Game

Despite being a small country, Poland has stood its ground as a thriving European economy. If you’re a trader from Poland looking to get involved in the forex market, trading currency pairs can be an opportunity to make some extra money. 

Thousands of traders in Poland are already operating in the forex market without losing money, although many Poles fail to make a profit from forex trading, so you should develop a good strategy before putting real money at risk.

Frequently Asked Questions