Discover and learn everyhing about the very best Danish Forex brokes

Contents

1 Top Forex brokers in Denmark
2 Danish Forex regulation
3 What should you trade on with Denmark based Forex brokers?
4 Pros and cons of the Danish Forex market
5 Forex trading in Denmark – summing up

As is the case with its other Scandinavian neighbors, Denmark is a very rich country, with its standards of living being among the highest in the world. This is despite the fact that Denmark has a relatively smaller economy. With a GDP of over $356 billion, for a population of just 5.8 million people, Denmark is one of the most prosperous countries in the world.

Due to these reasons, Denmark is often one of the most preferred countries in the world for doing business. This is also because the government itself is very encouraging and supportive of the trade liberalization. Naturally, with this very encouraging environment for doing business, along with the high standards of living, Forex trading is quite popular in the country. Though it’s quite a strict regulatory environment, relatively speaking, it still manages to stay very attractive and prospective for many international traders and Forex brokers. The reason is that despite this strict approach, Denmark does offer other kinds of benefits for the brokers, such as relaxed corporate taxing, which is lower than many other EU countries.

In this guide, we will be talking about Forex trading in Denmark, how it works in general, what are the legal entities that are governing the market itself, what kind of risks, opportunities, and options you have, and everything else that will help you become a better trader in Denmark not only as a complete beginner, but an experienced trader entering the Danish market for the first time.

Top Forex brokers in Denmark

As we have described the Danish Forex market, you would expect that there should be some really great brokers available there, and you would definitely be right. Thanks to the conditions and the environment that we just described, Denmark offers some of the best Forex brokers in the region.

After doing hours and hours of research, we compiled this list of the very best Forex brokers in Denmark, based on the very criteria that are most important to you, the average trader. Make sure to check out all the brokers listed below, and you’ll be able to find your ideal broker in no time.

XM

Min. Depo

Licences

FCA, CySEC, IFSC, ASIC, DFSA

Leverage

1:888

1:200

Platforms

MT4, WebTrader, Copykat

Global GT

Min. Depo

Licences

FSA, FSCA

Leverage

1:1000

Platforms

MT5,

Danish Forex regulation

The official regulatory body governing the Forex activities in Denmark is the Danish Financial Supervisory Authority (FSA), also known as Finanstilsynet in Danish. The FSA is the agency that is working under the ministry of economic and business affairs and acts as the sole governing body for Forex trading in the country.

FSA has been active since 1988 and was a result of the merging of Denmark’s Insurance Supervisory Authority and the Supervisory Authority for Banks and Savings Banks. This emerging has proven to be quite effective, as since then, FSA has been tasked with quite a lot of responsibilities – Forex regulation included – all of which it does an excellent job of. The list of other institutions and activities that FSA is responsible for includes investment companies, pension funds, clearinghouses, brokers and dealers, stock exchanges, insurance companies, and more. Needless to say, with such a huge list, the responsibilities are quite high, and so are the expectations. Which, as mentioned, FSA has been managing to fulfill quite well.

The main way FSA works is by collecting and analyzing the statistics, data, and all relevant information regarding the activity of the brokers, and taking appropriate steps and action to make the necessary changes to the market and move it forward. FSA manages to do this by having imposed certain rules, laws, and requirements on the market, the fulfillment of which is necessary for the brokers to remain licensed and be allowed to conduct business on the Danish soil. What are these requirements like, how they work, and how exactly do they help with creating more favorable conditions for all market participants? Let’s take a quick look.

Licensing

Denmark, as is the case with all its Scandinavian neighbors, has a very strict regulatory framework in the country. It also operates by closely following the standards and practices of other countries that are also operating based on practices and approaches recommended by ESMA (European Securities and Markets Authority).

For any company, institution, or group of people to offer any financial services specifically in Denmark, they need to be officially licensed by FSA. However, you’d be hard-pressed to find a lot of brokers that are operating from within Denmark, and are physically based there. As such, finding a lot of Denmark-based brokers that are licensed by FSA would be quite a challenging task.

How would you be able to trade with many brokers in Denmark, then? Well, as is the case with many other countries, Denmark enjoys the flexibility and outreach that it gains from being in the Eurozone, meaning that if a broker is licensed by any other countries within the Eurozone. Though this is not ideal in terms of having complete safety, it’s still something that works quite well. The point is, if a broker is based in Germany and is licensed by BaFIN, you can be sure that it’s trustworthy enough to be offering services to the citizens of Denmark as well. In a nutshell, much of FSA’s regulatory approach and framework is based on ESMA practices, which are followed by pretty much the rest of Europe and their Forex markets and regulators. With that being said, what specific steps does FSA take to take the market in a positive direction?

Restrictions on various risky instruments

Restrictions are quite a common thing by international Forex regulations. Forex trading offers a lot of risky financial instruments, which, in some cases, especially for the beginners and inexperienced people, can be quite dangerous, and be a source of a lot of money loss. Leverage is one of the things that is among them. While for many people, especially for those with smaller starting capital, leverage has been one of the main things that have helped them make a lot of money, it has also been something that has been the cause of many people losing their money.

Especially in the countries where there are no restrictions on leverage, or where there are outrageously high limits on leverage, we have seen a lot of people go bankrupt, and go into debt. Because of this, many international Forex regulators, Danish FSA included, have banned high leverages. The countries in Eurozone are following the recommendations of ESMA, which states that the optimal level of leverage should be no more than 50:1.

Additionally, there are certain restrictions on CFDs as well. As is commonly done, FSA has restricted the advertisement for very high-risk CFDs. Moreover, they also necessitate the brokers to display mandatory risk disclaimers, with a very detailed explanation of exactly how much risk is associated with these CFDs, so the traders can know what exactly they’re walking into. Brokers are also prohibited from offering bonuses or any other kind of similar incentives for using CFDs. This has been a cause for discontent for many people, which is definitely understandable, as things like high leverage and high-risk high-reward CFDs can be very beneficial for many people, but the reality is that many people have lost a lot of money due to them, and as a government that cares about the safety of their people, Denmark, like many other countries, has restricted them.

What should you trade on with Denmark based Forex brokers?

Every country’s Forex market has a certain something that offers better trading opportunities than most other things. As an example, trading on oil is the best bet for UAE, Saudi Arabia, or Norway, thanks to their massive oil reserves. Similar is, however, not the case for Denmark, as it doesn’t particularly offer extraordinary trading opportunities for one single thing, such as trading currencies, specific commodities, etc.

However, Denmark does offer an amazing Forex environment that can guarantee you safety and a high standard of service. Thanks to the amazing job done by FSA, you can expect the best of the best brokers, who are offering top service all around the world and can give you all the tools you will need for success. With that being said, let’s take a quick look at what currency and commodity trading in Denmark look like, so you can have a better idea of what to expect in general.

The national currency and currency trading opportunities in Denmark

Denmark’s Forex market is excellent for currency trading. The country’s economy, although relatively small, is quite stable, and offers some good opportunities for people who are interested in trading the local currency. Speaking of which, Denmark, although it is officially within the European Union, did not choose to adopt EUR as its official currency – much like their Scandinavian neighbors – and chose to keep its national currency, which is the Danish Krone. This current has many abbreviations and names that it “goes by”, like DKK, DKR, and KR, but the official Forex code is DKR. Although it’s a separate currency on its own, the Danish Krona still happens to be quite dependent on the Euro. The reason is that DKR has been pegged to EUR via the ERM II for decades now, as Denmark has had a fixed exchange rate with the Eurozone.

DKR is under the direct management of the central bank of Denmark, which does a fine job at it. The central bank manages this by keeping strict standards as to how the currency performs and is used. As an example, it has a goal of always pursuing very low inflation of 2% and under. Additionally, the security is given a lot of importance, and the national bank ensures, that all payments are as secure as possible. Finally, the combination of all of its actions has a final goal of ensuring the financial stability of the financial market, allowing it to perform on the highest possible level it can.

This all means, that trading on the national currency can definitely be a profitable pursuit in Denmark. Thanks to the very balanced, effective, and growth-oriented approach of the country and its financial regulators, you can safely and profitably enjoy currency trading.

Trading commodities in Denmark

As we have already mentioned, Denmark is not particularly rich in any specific commodity. Rather, its commodities market is fairly balanced, with small chunks in various different industries and fields. However, make sure to not mistake this for weakness. On the contrary, Denmark happens to rank on the 31st place among the biggest exporters in the world. Although this is nothing extraordinary, it is definitely not a metric of a country that is weak at trading.

As of this writing, Denmark’s top exports are pig meat, refined petroleum, crude petroleum, electric generators, and packaged medicaments. As you can see, the list is quite diverse, which is always good, as the golden rule of investing is to never put your eggs in one basket. If you are looking for a market where you can have a very diverse and rich experience, then you will feel right at home trading in Denmark. Additionally, with the selection of great brokers that are available in Denmark, you can have access to pretty much any trading commodity or market instrument you desire. The options really are endless.

Pros and cons of the Danish Forex market

We have covered a lot in this guide, but as a bottom line, what can we say about the Danish Forex market? what are its strong sides, its weaknesses, and what, in general, are its pros and cons?

Pros

Very safe due to effective regulations
High quality of service
The stable economy in the country

Cons

Not a lot of local brokers available

Forex trading in Denmark – summing up

As we have learned, Denmark’s Forex market is quite interesting. Sure, it is not the biggest and most influential one, and its national currency is definitely not a popular one that is traded with other major Forex players besides the USD and EUR, such as the JPY or GBP. However, this doesn’t stop Denmark from offering an absolutely amazing Forex market. Thanks to its effective approach to regulation, as well as its encouraging and supportive economy, it can definitely show everybody else a thing or two on how to do it right!

If you are a Danish citizen interested in getting started with Forex, we can definitely encourage you to make your first step today! Make sure to check out our list of top Forex brokers in Denmark, choose the broker that fits your needs the best, and start making your very first steps in Forex today!