How to find the best Forex brokers in Denmark

Located in Northern Europe, the Kingdom of Denmark borders with Germany, Sweden, and Norway. The country is regarded as one of the most socially and economically developed in the world. The country has a total area of 42,920 km², and has a population of over 5.85 million people. Denmark has joined the European Union in 1973, and remains an important player in the European economy. Financial trading is popular in the country. And in this guide, we’ll show you how to pick the best Forex and CFD (Contract for Difference) brokers for trading financial assets.

A full list of the best Forex brokers in Denmark

When searching for the best broker, traders need to take into account various factors. Mainly, regulations, available assets, offered trading platform, fees, and customer support. The searching process can be lengthy and difficult as there are so many brokers to compare one another. To make this task easier for you, we’ve created the top broker’s list that accept traders from Denmark.

Forex trading regulations in Denmark

The main regulatory body in the country is the Finanstilsynet or the Danish Financial Supervisory Authority (DFSA). This body is an extension of the Danish Ministry of Economic and Business Affairs, with the area of responsibility including banks, the investment sector, pension funds, stock exchange, regulated Forex brokers in Denmark, and many more.

The DFSA is primarily responsible for overseeing the smooth functioning of each of the aforementioned sectors, as well as reinforcing customer support and promoting the marker’s growth and sustainable development. Similarly, the DFSA is the highest government authority managing local brokerages and the FX market. We will now get some insight into what exactly are the main regulatory measures that the DFSA undertakes to support and enhance Forex trading in Denmark.

DFSA license and its ramifications

The regulatory body is primarily responsible for issuing official licenses to the local brokers. This mechanism was put in place to ensure that only the most qualified and trustworthy brokers were permitted to offer their services to the local traders.

As already mentioned, Denmark is an EU member state and rules and restrictions made in the European Union are shared in the country. The European Securities and Market Authorities (ESMA), and the Markets in Financial Instruments Directive (MiFID), set certain protective rules that increase the safety and security of investors’ capital.

Restrictions on leverage and CFDs

Trading Forex, is, without a doubt, a risky enterprise, however, not many realize just to what extent. There are a number of trading instruments that are regarded as especially volatile and are often subject to extensive controversy.

Among them are the leverages and CFDs that can both the source of some of the most lucrative returns, or devastating losses. Thus, regulatory bodies from across the world have come to the conclusion that some sort of regulation is necessary to limit the potential damage that high-risk instruments may cause.

When it comes to leverages, the DFSA has a regulation that sets a limitation to the maximum available leverage traders can use. The highest available leverage on currency trading throughout the EU for retail traders is only 30:1, while professional traders can enjoy up to 200:1 leverage.

According to the European regulators, the following are the maximum limit for available leverage:

• 30:1 for major currency pairs
• 20:1 for non-major currency pairs, gold and major indices
• 10:1 for commodities other than gold and non-major equity indices
• 5:1 for individual equities and other reference values
• 2:1 for cryptocurrencies

While these limitations might seem very strict, when considering the fact that most international brokers are offering up to 1000:1 leverage, the restrictions are in place to protect investors. Most beginner traders lose money because they open oversized orders using high leverage and when price moves against their predictions, they lose half of their account balance.

Ban on bonuses and promotions

Another thing to consider if you are thinking about getting into the Forex trading market is whether or not the brokers in your country offer bonuses and promotions. The provision of bonuses is a long-used marketing tool, that the brokers from all over the world utilize to expand their customer base.

There are two main kinds of bonuses available. The welcome bonus is usually gifted to the newly joining traders, either upon signing up with the brokerage or immediately after the first deposit is installed. In turn, refill bonuses are provided periodically to the returning traders and are usually announced by the brokers in advance.

While the availability of such bonuses seems beneficial to both brokers and traders alike, many countries, including Denmark, prohibit them as a form of aggressive marketing of a risky financial investment, and, in this case, in abidance with the standard put forward by the MiFID and ESMA.

Popular trading platforms in Denmark

When starting your trading journey, one of the most important decisions to make is finding a suitable trading platform. The most popular platforms throughout the world and in Denmark are:

• MetaTrader 4 (MT4) – released in 2005, highly reliable, uses MQL4 language for trade automation, and is used for trading Forex
• MetaTrader 5 (MT5) – built in 2010, the platform is also super reliable and uses MQL5 for coding trading algorithms. MT5 is a multi-asset platform, which means that in addition to Forex, it is used for trading stocks, futures, and bonds.
• cTrader – was released in 2010, the platform is mainly used for trading currencies. For trading automation, the platform uses C# language.

Summary

Overall, Forex and CFD trading in Denmark is fully legal and strictly regulated. Residents of the country can open accounts with local brokers that have local licenses, or can find international brokers. Global brokers typically offer better trading conditions, as they have more customers and can use economies of scale to offer better trading fees. In fact, all the brokers in our top list are international brokers. It’s worth to take a look at their detailed reviews before making a decision.

FAQs on how to find the best Forex brokers in Denmark