Forex Trading In Italy: A Comprehensive Guide
Forex is legal in Italy and you can trade with regulated brokers that accept users from Italy, to start trading forex in Italy you need to learn basics, open a forex trading account and deposit money.
Forex trading in Italy has gained popularity among those seeking to benefit from the foreign currency market. Even though these currencies operate within the parameters of European financial legislation, notably the Markets in Financial Instruments Directive (MiFID), trading currency pairs is legal in this region. However, this could be overwhelming for someone who has heard about the opportunities but has no idea how to get started.
Learning to navigate the Italian Forex market has its difficulties and its rewards. You have come to the right place if you are curious about the nuances of Forex trading in Italy, from its legality to the tax repercussions.
TU experts will provide you with the fundamental information required to succeed in the foreign exchange market in this in-depth guide to Forex trading in Italy. This article will give you knowledge that will benefit traders of all levels and present traders with the best Forex broker for beginners in Italy.
What is Forex trading?
Forex, short for foreign exchange, refers to the global decentralized market where currencies are bought, sold, and exchanged. It is the largest and most liquid financial market in the world, with participants including banks, financial institutions, corporations, governments, and individual traders. Forex trading involves speculating on the price movements of currency pairs, aiming to profit from fluctuations in exchange rates.
How much money do I need to begin?
Forex trading in Italy does not require a trader to invest a specific amount. The capital to start Forex trading is flexible, meaning three traders trading on different Forex trading platforms in Italy can deposit varying amounts. There are provisions for various account types because brokers provide a range of options for traders with eclectic budgets. It is still possible for a trader in Italy who has insufficient capital to trade currency pairs. A demo account, which is a no-deposit account designed for traders who want to practice Forex trading without risking their money, is what the trader needs to open.
A demo account is a feature available on many of the best trading platforms in Italy. However, a broker's minimum deposit can be a starting capital for traders who want to know how much they can start investing. Forex brokers agree that a minimum deposit of $50 to $500 is best to start realizing profits from Forex trading in Italy.
New traders may have to start trading Forex on a demo account. After seeing success on a demo account, they might think about depositing into a live account but must use sophisticated risk management techniques. Another option is a cent and a micro lot trading account. Both of these options allow you to trade with smaller position sizes, reducing your risk.
How to begin to trade Forex in Italy? A step by step guide
Before you start Forex trading in Italy, understand that trading currency pairs involves risk and that there are no guarantees of profits. So, to succeed, traders must dedicate time to learning currency pairs, which often require time, practice, and continuous improvement. Again, traders must learn how to use the many sophisticated tools found on the best trading platforms in Italy, like copy trading systems.
So, if you are ready to start trading Forex in Italy, here is a step-by-step guide.
Step 1: Gain more knowledge
It is crucial to always review the Forex market, trading strategies, and risk management before beginning with Forex trading. You can get top Forex knowledge by reading books and online courses, watching tutorial videos, and following reputable financial news sources.
Step 2: Choose a reliable Forex broker
If you understand Forex trading to a certain extent, the next step is locating the best trading platform in Italy. For the security of your assets and to ensure your efforts are rewarded accordingly, select brokers regulated by top financial institutions like the FCA, ASIC, CySEC, etc.
Step 3: Examine the brokers' trading tools
Before you finally open a trading account with the broker, you must inspect what trading tools the broker provides. With your understanding of the Forex trading market, you should have a primary knowledge of the tools a broker should offer new and expert traders. Consider the broker’s trading platforms, minimum deposit, transaction fees, leverages, spreads, and available currency pairs. Verify that the broker offers the account type that fits your spending limit and level of expertise.
Step 4: Open a trading account
If the broker's trading tools and environment are what you seek, go ahead and open a trading account with the broker. Ensure to complete the necessary KYC (Know Your Customer) verification by providing your personal information. Use the broker's demo account to practice trading before investing real money. This enables you to test your strategies without putting any money at risk while getting acquainted with the trading platform. Describe your objectives, risk tolerance, and trading strategy in a thorough trading plan. Include regulations for position sizing, entry and exit points, and risk management.
Step 5: Deposit into your real account and place trades
Since there are no profits from trading on a demo account, you must fund your live account before you can start trading for real money. Use any payment options (credit card, bank transfer, crypto, etc.) the brokers accept to fund your account. You can place trades on your real account the same way you did when practicing on the practice account; remember to use the necessary risk management strategies when initiating trading positions.
Rules and Regulation
Licensing in Italy
In Italy, the primary supervisory bodies are the Italian Companies and Exchange Commission (CONSOB) and the Bank of Italy (BI). Forex brokers in Italy must observe the provisions of the European Securities and Markets Authority (ESMA) and the Markets in Financial Instruments Directive (MiFID). The main requirements to obtain a license are:
- registration as a legal entity in compliance with the local law.
- registered capital from €30,000 to €500 000.
- professional liability insurance.
- compliance with CONSOB’s internal rules, including the rules for accounting, financial statements, risk management, and client protection.
CONSOB-regulated brokers must file financial statements at least once a year.
Investor protection in Italy
CONSOB regularly investigates violations of financial norms, protecting the financial market of Italy. The Commission guarantees EUR 20,000 compensation for every user deposit made with all brokers it oversees.
Taxation in Italy
Residents of Italy pay a 26% tax on income from all types of investments, including stocks, bonds, cryptocurrencies, and futures. There is also a 0.02% tax on high-frequency trading collected from every trade executed after an established trade limit.
Best time to trade Forex in Italy
Since the Forex market is open around-the-clock, every day of the week, the best time to trade depends on your schedule and trading approach. But whichever day you decide to trade Forex in Italy, remember that the Forex market is divided into distinct trading sessions, each with its characteristics. Consider coordinating your trading strategy and trading sessions. Below are the Forex trading sessions in Italy.
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Sydney (Pacific session)
Trading time frame: 2:00 to 7:00 GMT. -
Tokyo (Asian session)
Trading time frame: 23:00 to 9:00 GMT -
London (European session)
Trading time frame: 8:00 AM to 5:00 PM GMT. -
New York (American session)
Trading time frame: 12:00 to 22:00 GMT.
The best time to trade Forex in Italy is during the overlap between the London and New York sessions (12:00 to 4:00 PM GMT). To take advantage of the most advantageous time in local time, you must understand how the hours of the Forex market session relate to Italian local time. The time difference when Italy observes daylight saving time (CEST) is two hours, even though CET, the Italian time zone, is typically one hour ahead of GMT.
So, converting 12:00 PM to 4:00 PM GMT to Italian time during standard time in Italy (CET) is 1:00 PM to 5:00 PM. During daylight saving time in Italy (CEST), it would be 2:00 PM to 6:00 PM Italian time.
Best Forex brokers in Italy
The Forex market is widely recognized as one of the biggest markets in the world, boasting a daily trading volume that has exceeded $6 trillion. Many countries attract a significant number of traders who participate in Forex trading.
Forex trading conditions in Italy are subject to regulations imposed by the Italian Securities and Exchange Commission (CONSOB), which includes measures to protect retail investors and ensure transparency in the market. Italian traders have access to a wide range of forex brokers and trading platforms, with competitive spreads and leverage options, but they must adhere to specific reporting and compliance requirements set by the regulatory authorities.
IC Markets
IC Markets is a leading global Forex and CFD broker established in 2007 and headquartered in Sydney, Australia. The company is regulated by top financial authorities including the Australian Securities and Investments Commission (ASIC) and Cyprus Securities and Exchange Commission (CySEC) . IC Markets offers ultra-tight spreads from zero pips, high leverage up to 1:500, and a minimum deposit of $200. Traders can access over 2,100 tradable instruments like Forex, stock CFDs, indices, commodities, metals and cryptocurrency pairs through reliable MT4, MT5 and cTrader trading platforms.
IC Markets empowers scalpers and algorithmic traders through some of the fastest execution times in the industry averaging around 40 milliseconds. Traders appreciate the 24/5 customer support through multiple channels and extensive educational content including ebooks, webinars, video tutorials and trading tools. IC Markets leads the industry winning over 50 awards for product innovation, customer service and fastest execution globally.
The broker maintains a high satisfaction rating based on verified user reviews. IC Markets' strong reputation, commitment to tight spreads and competitive trader-centric conditions have earned it a top position amongst active traders in Italy. The company also partners with several copy trading and social trading platforms for passive investors.
Overall, IC Markets offers one of the best mixes of regulation, liquidity, platforms and conditions amongst online CFD brokers globally.
Tickmill
Tickmill is a Forex and CFD brokerage platform that has been in operation since 2014. The company is regulated by financial authorities such as the UK's Financial Conduct Authority (FCA) Tickmill works with highly reputable liquidity providers to offer customers the lowest spreads and minimal risks for the assets that they trade. Italian traders using Tickmill can access over 85 different instruments including stocks, bonds, precious metals, CFDs, and indices.
Tickmill is a top Forex and CFD brokerage platform that has earned a reputation for offering its customers the lowest spreads and minimal risks. Forex trading is one of the most popular activities on the platform, and the MetaTrader 4 platform allows trading in 62 different national currencies, including minor, exotic and major currencies. The leverage for Forex trading on Tickmill goes up to 1:30, while the spreads start from 0.0 pips. There are no requote trading costs, and no limits on trading. The minimum deposit is $100, and the minimum leverage is 1:20. Tickmill is a popular choice among traders worldwide, including those from Italy, for trading in a variety of assets such as global Forex, CFDs, stocks, and cryptocurrencies.
FxPro
FxPro is a leading Forex trading platform that has been providing Italian Forex traders with advanced trading tools, high liquidity, and an extensive range of trading instruments since 2010. The platform is regulated by several authorities, including the Financial Conduct Authority, the Cyprus Securities and Exchange Commission, the Financial Sector Conduct Authority, and the Securities Commission of the Bahamas. Italian traders can trade contracts for differences in six asset classes, including Forex, shares, spot, futures, spot metals, and spot energies, with FxPro.
To start trading with this particular broker, a minimum deposit of $100 USD is required. Italian traders who choose this platform can anticipate facing fees that commence at $3 USD, spreads that can go as low as 0.01 pips, and leverage that varies at 1:20 based on the type of account they select. Additionally, FxPro provides a mobile Forex trading application known as FxPro Direct.
FxPro assures Italian traders of high-quality liquidity and advanced execution of trades with no external intervention. The platform provides traders with access to over 2100 trading instruments and offers a wide variety of account types with competitive trading conditions and rapid execution rates. FxPro is highly regarded for its reliability and trustworthiness, which stems from its negative balance protection and regulation by multiple financial authorities. Italian traders can be confident while trading on FxPro.
Best paper trading brokers in Italy
Trading in financial markets requires the right choice of a broker, as security of traders’ funds, their profit and opportunities depend on it. Paper trading refers to a simulated platform that allows you to buy and sell stocks with virtual money.
eToro
You can use eToro to invest in more than 3,000 stock assets, including at zero fee. The minimum deposit and leverage vary depending on the country of registration of a trader. Trading is available in mobile apps and on the web platform on any device. You can deposit and withdraw money via debit/credit cards, bank transfer and electronic payment systems. The broker offers margin trading, various bonuses and partner rewards.
DEGIRO
DEGIRO is a convenient broker for Europeans. There is no minimum deposit amount, that is why demo accounts have been canceled because even small amounts can be invested. Also, the company doesn’t charge commissions for the lack of activity on the account and its maintenance. An investment account can be opened within 1 day. DEGIRO offers convenient replenishment and withdrawal. The base currency is always the currency of the client's country of residence.
Revolut
Revolut offers commission-free trading with no minimum deposit requirements. Stocks, cryptocurrencies, and precious metals are available for trading. Client funds are kept on segregated accounts, which is a guarantee of their safety. Since fractional share trading is available at Revolut and there is no brokerage commission per transaction per month, you can start with a minimal investment. Deposits can be made in 28 currencies, but the broker translates them into USD since trading is only on the US stock market.
Best prop firms in Italy
Prop trading can be interesting and appealing for traders in Italy for several reasons. Its main strength lies in the opportunity it provides for traders to access significant trading capital without needing to invest their own funds. This allows traders to take advantage of the potential profits in the Forex market while minimizing their personal financial risk.
Additionally, best prop trading firms often offer valuable resources such as training programs, mentorship, and advanced trading tools, which can enhance traders' skills and improve their chances of success in the highly competitive Forex industry.
TopStep
Topstep has established itself as a trusted and innovative leader in the industry. To participate in Topstep's funded account program, all traders begin by completing the Trading Combine stage. This allows you to open a real-time simulated futures account with buying power options of $150,000, $200,000, or $300,000.
When it comes to profit withdrawals, you can withdraw the first $5,000 in profits in full, and 90% of any profits exceeding that amount are also available for withdrawal.
Topstep's commitment to trader development is evident through their range of services. They provide instruction from professional traders, offer tools and daily live videos, deliver personalized analytics on performance, and even provide bonuses to traders. Topstep supports a variety of trading platforms, including TradingView, NinjaTrader, Sierra Chart, TSTrader, MultiCharts, and many more. This allows traders to choose the platform that best suits their preferences and trading strategies.
Pricing for Topstep varies depending on the account size. For a $50,000 account, pricing starts at $165 per month. $100,000 accounts cost $325 per month, and $150,000 accounts are priced at $375 per month. Additionally, Topstep offers a 14-day free trial, allowing traders to experience their services before committing.
SurgeTrader
SurgeTrader is an excellent choice for Italian traders looking for the leading prop firm. This prop firm offers a competitive profit split up to 75% to funded traders who meet their trading criteria. Unlike many other prop trading entities, SurgeTrader follows a streamlined evaluation process with only one phase.
Traders of all skill levels can select from six different packages offered by SurgeTrader. The Starter Package, ideal for beginners, provides $25,000 in instant funding and sets a 10% profit target. With a maximum trailing drawdown of 5%, this package offers a more conservative approach.
On the other hand, the Master Package, which is the highest-tier account, comes with a funding size of up to $1 million and a 75% profit split. It sets a 10% profit target, a four-percent daily loss limit, and a five-percent maximum trailing drawdown. This package is suitable for experienced traders.
SurgeTrader provides a wide variety of tradable securities, including cryptocurrencies, gold, and popular stock indices. Traders have the flexibility to leverage up to 1:20, allowing them to amplify their trading positions.
To become a part of SurgeTrader, all clients are required to undergo evaluations. The SurgeTrader Audition process consists of a single phase, and there is no specific requirement to earn over 10% of your account balance to pass the audition.
The audition fees range from $250 (Starter package) to $6,500 per account, and there is no limit to the number of times you can take the audition. Payments and withdrawals can be made conveniently using credit/debit cards and PayPal.
FTMO
To qualify for a funded trading account at FTMO, you will need to successfully complete a rigorous three-step process designed to evaluate your trading abilities:
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Step 1: FTMO Challenge - In this initial phase, you are required to meet specific profit targets within a 30-day period. The aim is to demonstrate consistent profitability and trading skills.
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Step 2: Verification Procedure - After successfully completing the FTMO Challenge, you progress to the 60-day Verification Procedure. During this phase, you must show that you can replicate your trading success from the previous step, further validating your trading abilities.
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Step 3: Account Offering - Upon successful completion of the FTMO Challenge and Verification Procedure, FTMO will contact you with an offer to trade their capital. Account sizes range from $10,000 to $400,000, providing traders with opportunities at different funding levels.
One notable strength of FTMO lies in its focus on currencies, making it an excellent choice for traders interested in Forex trading. With FTMO, you have access to trade 44 currency pairs and 10 cryptocurrencies. Additionally, you can also trade cash indices, commodities, and stock CFDs, diversifying your trading portfolio.
FTMO supports the three most popular Forex trading platforms, namely MetaTrader 4, MetaTrader 5, and cTrader, offering free versions for traders to utilize.
The participation fee varies depending on the account size. For instance, the fee for the 10k account starts at 155 EUR, while the 25k account is 250 EUR, the 50k account is 345 EUR, the 100k account is 540 EUR, and the 200k account is 1,080 EUR. Traders receive capital ranging from $10,000 to $400,000 and benefit from an 80/20 profit split, where they receive 80% of the profits they generate with the provided capital.
Furthermore, FTMO offers a Scaling Plan for funded accounts, allowing traders to enhance their Profit Split in their favor. This plan enables profit splits of up to 90:10, favoring the trader, for account sizes up to $2,000,000.
Best copy trading platforms in Italy
Copy trading is among the best methods many traders in Italy could depend on to cash out from trading currency pairs without much Forex knowledge. Additionally, several Forex brokers are making this offer available along with other top trading features like PAMM accounts. Although there are numerous copy trading platforms in Italy, only the top copy trading apps give traders the unique tools they need to generate enormous profits.
IC Markets Copy Trading
IC Markets offers social and copy trading services through its proprietary IC Social platform. Traders can create custom profiles highlighting their strategies, performance history and current positions. Investors can browse top trader profiles based on criteria like win rates, profit factors and account growth to copy trades automatically. IC Social allows setting precise copying percentages and gives full control over risk parameters. Traders and investors can interact through private messaging and exchange trading ideas.
Some key features of IC Markets' copy trading include fully automated copying of trades in real-time, manual trade copying option, signal trading services where investors self-manage trade entries, advanced trader ratings and filtering options. Traders benefit from gaining followers and performance-based rewards. Investors can take a hands-free, passive approach while tapping into knowledge of experienced traders. IC Social is fully integrated with the MT4 trading platform for a seamless experience.
eToro (Copy Trader)
eToro is a multi-asset investment platform that offers market analysis, comprehensive tools, and impressive copy-trading capabilities. Through the eToro CopyTrader feature, users can explore the profiles of successful traders and copy their trades. eToro also offers CopyPortfolios, which group assets based on a specific market approach, providing diversified investments. The platform has a user-friendly interface, educational resources, and innovative trading tools.
Tickmill copy trading
Tickmill is a platform that offers various analytical instruments for Forex trading and copy trading. It partners with MyFxBook to provide copy trading services, and users need accounts on both platforms. Tickmill has a high entry threshold for copy trading, with a minimum investment of $1,000. The platform is licensed by respected regulators such as FCA, CySec, and FSCA, ensuring safety and regulation.
Is Forex halal?
If you’re concerned about how the exchange of currency associated with forex abides by Islamic law and beliefs, you don’t have to be. That’s because forex is halal, meaning that it’s acceptable within Islamic law.
However, many Muslims believe that Forex is gambling. But whether or not forex is halal (acceptable) or haram (forbidden) depends on the intent and behavior of the individual investor.
If you trade with a proper strategy and Islamic account, then the act is halal. On the other hand, if you trade with a regular interest charging account and no system, the act could be considered gambling and haram.
One way to understand whether or not forex is halal is to know the definition of gambling. Gambling in Islam is where individuals speculate on an event. And they have almost no control over the outcome. So, if you’re constantly making sure the odds are in your favor with forex trading, then you can avoid being a gambler.
Another way to ensure that you keep your activity halal is to use an Islamic forex account. These accounts allow Islamic traders to trade without interest. As a result, Muslim traders can follow Islamic law while trading forex. These Islamic accounts are known as swap-free accounts.
Brokers use the Musharakah (to share) Arrangement in Islam. This means that both parties will benefit from earnings and losses in trades.
Can I trade with internationally regulated Forex brokers in Italy?
Yes, it is possible to trade with international Forex brokers, as some of them are among the best trading platforms in Italy. Trading Forex with internationally regulated brokers can provide a wider variety of trading opportunities and access to international markets while ensuring a certain level of regulatory oversight and investor protection, which is crucial for traders in Indonesia. However, before choosing an offshore broker in Italy, ensure the broker is overseen by respected regulators (FCA, Cysec, etc.). These regulatory entities have detailed specifications regarding client fund segregation, fair trading practices, and capital adequacy for brokers to obtain and maintain their licenses.
It can be risky to trade with a broker who does not have a physical presence in Italy, but if the broker has a good reputation, they are likely regulated in the country where they have a physical presence. Licenses from reputable regulators guarantee that the broker abides by strict financial and operational standards, boosting the trader's asset security.
Can I trade Forex with a minimum investment in Italy?
You can start trading Forex in Italy with a small initial investment if you choose the right broker and account type. Thanks to some options, such as cent accounts, copy trading, demo accounts, and PAMM accounts, you can get started with little risk and a small deposit. These options accommodate different trading preferences and levels of experience, making it possible for traders to start with little capital. For example, a cent account allows traders to trade with smaller trade sizes than a standard account. Instead of the standard account currency units (dollars, euros, or other major currencies), the base currency usually has a denomination of cents.
How much can I earn in Italy?
The amount of profit made from Forex trading in Italy varies greatly because experience, the size of the investment, the terms of the trade, and transaction costs determine a trader's earning potential. While inexperienced traders or those with smaller investments might only see modest returns, more seasoned traders who handle larger investments and employ successful trading strategies have the potential to make more significant profits. Successful Forex trading requires careful risk management and ongoing education because there are risks and no guarantees of profits.
FAQs
Can you trade Forex in Italy?
Yes. Forex trading in Italy is open to residents; professional traders generate profits weekly. Forex trading in Italy can become unsafe if you do not do the necessary homework before engaging, which includes researching Forex trading and choosing a reputable brokerage.
Is trading allowed in Italy?
Yes. With Forex proclaimed legal in Italy, traders can freely trade currency pairs, but you must learn about the Forex trading session and the best time to trade Forex in Italy. Also, trade with brokers that adhere to the regulations of top financial regulators.
What is the best trading app in Italy?
Several trading applications are available in Italy, and each one offers a unique feature and service for traders. If you are a beginner, go for brokers that integrate top educational resources, demo accounts, low minimum deposits, intuitive trading interfaces, classic trading platforms, cent accounts, etc. IC Markets, eToro, Tickmill, Fxpro, and Exness are some of the best brokers that offer these features.
Is Forex trading legal in Italy?
Yes. Forex traders can legally trade currency pairs in Italy. In addition to conventional Forex trading, Islamic Forex trading is also accessible in this jurisdiction. Whether you are trading a normal or Islamic Forex account, it is paramount that you register with a regulated Forex broker.
Team that worked on the article
Peter Emmanuel Chijioke is a professional personal finance, Forex, crypto, blockchain, NFT, and Web3 writer and a contributor to the Traders Union website. As a computer science graduate with a robust background in programming, machine learning, and blockchain technology, he possesses a comprehensive understanding of software, technologies, cryptocurrency, and Forex trading.
Having skills in blockchain technology and over 7 years of experience in crafting technical articles on trading, software, and personal finance, he brings a unique blend of theoretical knowledge and practical expertise to the table. His skill set encompasses a diverse range of personal finance technologies and industries, making him a valuable asset to any team or project focused on innovative solutions, personal finance, and investing technologies.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).