How to identify and sign up with the best Denmark Forex broker

In the Eurozone, Denmark and other Nordic countries have some of the harshest and strictest financial regulations. This is, in fact, a good thing since the Forex market is rife with scams and fraudulent activities. By maintaining a very high standard of ethics and imposing strict regulations on Forex brokers operating in the country, residents have a good opportunity to identify trusted Forex brokers in Denmark. Of course, these tough regulations come at a cost, since they have choked the proliferation of Forex trading companies into Denmark, leaving only a handful of companies willing to take the leap. As with all things, there are both downsides and upsides, but that does not mean it is impossible to find a good Forex broker in Denmark. On the contrary, with the right guidelines, you can find yourself the best Denmark FX broker and kick off your trading career.

Danish brokers

The most important of all these guidelines has got to do with regulation, as it is the key aspect in any financial field. Good regulation protects the investors while at the same time ensuring that the Forex trading company adheres to the country’s rules. As mentioned before, the regulations in Denmark are very restrictive, and we shall be looking in detail at how these regulations are implemented. Besides regulation, there are several other factors that are also very important, and these have got to do with the trading conditions. In my trading career, I have found that I am more successful when comfortable with the conditions made available to me. For example, the choice of trading platform can provide you with the necessary tools to enhance your trading experience, or deprive you of them. As a result, I only consider the top Denmark FX brokers to be those offering the best trading conditions.

By the end of this post, I’m hoping that you shall have a clear understanding of Denmark’s regulatory environment as well as what is required for the top Denmark Forex broker. Afterward, you’re on your own.

Some of the most trusted Forex brokers in Denmark

Before going into further details regarding the factors that make up the best Denmark FX brokers, we can start by listing some excellent options to choose from. Based on this list, one of them is going to be your trading partner by the time you’re through reading this article:

XM

XM Forex Broker Review

Minimum deposit

5$

Regulation

CySEC, FCA

Bonus

30$, 50%+20%

Maximum leverage

1:888

Year founded

2009

Trading platform

MT4, WebTrader

IQ Option

IQ Option Review

Minimum deposit

$10

Regulation

CySEC

Bonus

N/A

Maximum leverage

1:30

Year founded

2013

Trading platform

WebTrader

Plus500

Plus500 Review

Minimum deposit

100$

Regulation

FCA

Bonus

N/A

Maximum leverage

1:30

Year founded

2008

Trading platform

Custom

Forex.com

Forex.com Broker Review

Minimum deposit

250$

Regulation

FCA, NFA

Bonus

N/A

Maximum leverage

1:200

Year founded

1999

Trading platform

MT4

EasyMarkets

EasyMarkets Review

Minimum deposit

25$

Regulation

CySEC, ASiC

Bonus

N/A

Maximum leverage

1:200

Year founded

2003

Trading platform

MT4, WebTrader

LH-Crypto

LH-Crypto review

Minimum deposit

€10

Regulation

Vanuatu

Bonus

Rolling Swap, Contest

Maximum leverage

1:500

Year founded

2018

Trading platform

MT5, WebTrader

Z.Com Trade

Z.Com Trade Review

Minimum deposit

5$

Regulation

FCA

Bonus

N/A

Maximum leverage

1:200

Year founded

2005

Trading platform

MT4

The above are the largest Forex brokers in Denmark based on the number of clients they have. On the other hand, you may have noticed that none of them actually has a license from the Danish FSA. That is because, as far as I can tell, there aren’t any retail Forex brokers licensed or regulated by the FSA. Clearly, the Forex market hasn’t grown as rapidly as it has in other parts of the world, but that does not mean you can’t participate.

All the above options are excellent companies regulated by reputable bodies and who have many clients already signed up, some of them even from Denmark. It may be a risk, but one that is totally worth it. Besides, once you know what to look for in a Forex broker, you will realize that these are among the best Denmark Forex brokers you can find.

How is the Forex market regulated in Denmark?

Being a member of the European Union (EU), Denmark takes most of its legislative cues from the European Securities and Markets Authority (ESMA). Nevertheless, Denmark still maintains a bit of its autonomy, and it created the Danish Financial Supervisory Authority (Finanstilsynet) (FSA) to oversee the financial markets. According to Danish law, Forex brokers seeking to solicit the country’s residents to sign up have to be licensed and regulated by the Finanstilsynet. All Forex brokers that aren’t licensed are restricted from signing up Danish residents as clients, but the activity still goes on. Being an online-based industry, many Danish residents interested in the Forex market still sign up with these offshore Forex brokers. If you’re one of those people, then please be advised against it. A number of Denmark Forex scams have cost Danish residents huge amounts of money as they were hoping for greener grass.

Danish forex regulation

The position of Denmark as an EU member means that most of the regulations regarding Forex trading come from ESMA. These regulations are encompassed among the MiFID legislation. Recently, ESMA announced that it was considering making some changes to the financial regulations through MiFID II that came into effect earlier this year. Among these changes in Forex trading regulations included a cap on leverage, risk disclosure and a ban on Forex bonuses. Today, leverage in Forex trading in Denmark has been limited to a maximum of 50:1 and there are no longer any Forex bonuses either for signing up or making the first deposit. Concerning risk disclosure, FSA regulated FX brokers must clearly indicate that Forex trading is risky and that the investor may lose even more than they invested initially.

All these ESMA regulations are automatically into Danish law, and all the FSA regulated Forex brokers must abide by these rules. On the other hand, since there are no Forex brokers actually licensed by the FSA, Danish residents can only work with offshore brokers. It is risky to do so since the trader does not enjoy the protections of the FSA in doing so, but there are no other options. Some of the protections that would have been offered by the FSA include capital protection through the monitoring and supervision of Forex trading companies. Hailed as having the highest ethical standards in the world, an FSA regulated Forex broker could be completely trusted not to perform any unscrupulous activities.

It is advisable to go for an FSA regulated FX broker because it is a capable institution. In fact, compared even to some of the most popular regulators like the FCA and NFA, the Danish FSA has an even better track record of keeping the country’s residents safe from scammers. To demonstrate how the Finanstilsynet looks out for its people, they have made it possible to submit a complaint on their website. Besides just reporting about particular Forex brokers, the website also provides an FSA regulated Forex brokers list so that it is easier to identify if a certain broker is licensed or not.

If you have to choose an offshore broker, though, ensure that the broker abides by MiFID II regulations since these are the same applied in Denmark. Most Forex brokers operating within the Eurozone will observe MiFID II, so it should not be too difficult to find a replacement to the top Denmark FX broker.

Why Denmark’s Forex market isn’t as robust as the rest of Europe

Across Europe, in most countries, the Forex market seems to be growing faster than the industry can hold traders’ interest. The situation is a bit different in the Nordic countries, including Denmark, where the residents still seem more interested in the stock market. A similar situation could be observed in the United States, but for different reasons. In Denmark, the people believe strongly against gambling, and Forex trading seems a lot like gambling. Instead, the Danes prefer to invest in more established financial sectors like the stock market rather than an over-the-counter market like the Forex industry. Even the top Denmark Forex brokers would seem like gambling dens to most Danes, so the Forex brokers don’t even bother pursuing a market that may be hostile.

Danish Forex market

What else should you look for in a Forex broker?

As mentioned earlier, most of the remaining factors have to do with the trading condition you experience every day. For a Danish resident, one prohibitive factor could be that of language. While a majority of Danes can speak English, most are not completely fluent in it, instead preferring to speak in Danish. This is going to be a major obstacle to any Danish resident looking for a Forex broker because there are very few, if any, Forex brokers who offer their services in Danish. Had it been Denmark regulated Forex brokers, then it would most certainly be available in Danish, but most brokers offer only English. If you’re lucky, you may find one broker that offers German, the third-most-popular language, but you had better be good at that too. Remember, the language will affect all your trading activities from the trading platforms to the customer support, so this is going to be a crucial decision.

Other than the language barrier, consider what trading instruments are made available to you. There are many more options besides Forex pairs that you can trade in the form of derivatives. These derivatives come in the form of CFDs which, although you don’t actually own the product, you can still profit from the price movements. The best Denmark CFD brokers should provide derivatives for stocks, commodities, indices and even cryptocurrencies. So far, the Danish authorities have been against cryptocurrencies, with even the Central bank chief issuing a warning against bitcoin calling it ‘deadly’. Therefore, it is unlikely you shall find any FSA cryptocurrency brokers. Then there is an issue of tax, where profits from Forex trading are supposed to be reported as capital gains tax. Consider this fact before you start trading or you might find yourself on the wrong side of the law.

ESMA

Finally, after you have narrowed down your options, it would be time to look at some credible Denmark Forex broker reviews. The Forex market is a global industry, which means that you need to learn everything you can from everywhere you can find. These online forums and discussion websites provide useful insight into the advantages and disadvantages of dealing with particular Forex brokers.

With these guidelines, I hope you now have a better understanding of what is required of a Forex broker, and that you may find one that suits you best.