The history of Israel is definitely not an ordinary one – the country made a long way to become the democratic Jewish nation-state, as it defines itself today. The richness and depth of the country’s history are also mirrored in its diverse culture, architecture, and world heritage sights. After all, Israel is home to some of the oldest and major religious groups that coexist together on a little over 20 770 square kilometers of Israel’s total territory.
Ancient history aside, Israel has managed to achieve what many other countries across the world can only dream about. First proclaimed in 1948, the state of Israel has soon become one of the strongest economies in the region, and an important player in the international economic arena.
With a population of over 9.26 million people, Israel demonstrates an impressive GDP of 372 billion USD. The national economy is both well-developed and diverse, and, thus, can offer a lot to those interested in Forex trading.
In this guide, we will have a closer look at the local FX market, the regulatory mechanisms in place, the opportunities that the Israeli national economy has to offer, an overview of the best Forex brokers in Israel, and more. Whether you are an experienced trader or only just getting into this field, be sure to read this guide until the end, as we are confident that you will find something interesting for yourself here.
Having learned about the strength and stability of the country’s national economy, you are probably wondering how to go about choosing the brokerage that best suits your needs. Usually, the best way to approach it is to carefully study the local FX market, determine what your trading needs are, and, based on those two factors, search for the brokerage that is right for you.
We are well aware of just how time-consuming and exhausting this process is, which is why we decided to simplify it a little for you. Our team of qualified experts has called upon their extensive background in trading Forex, as well as the knowledge about the specifics of the country’s FX markets, and compounded a complete list of the most trustworthy and reputable brokerages in Israel.
We do not necessarily suggest that the list that you are about to read is a feasible substitute for the research that every trader should aim to conduct, however, it is definitely a good starting point, as it contains all the information one would seek about the broker – including the success rates, license and the trading instruments available.
CySEC, IFSC, ASIC
CySEC, FCA, FSA
100 currency units
CIMA, FCA, NFA
Israel is duly recognized as the most advanced economy in the region of the Middle East and Western Asia. Although not particularly rich in natural resources, the country has managed to achieve rapid and sustainable growth by investing in the quality of dedication and the expansion of the science and technology sector.
On top of being the home to some of the world’s most cutting-edge technological advancements, Israel has successfully witnessed the emergence of various other sectors of the national economy. Among those are agriculture, the industrial sector, and tourism, especially the religious one.
Every year, the country receives thousands upon thousands of pilgrims from all over the world, and of different confessions, that wish to pay a visit to their holy sights. Finally, the Israeli start-up environment has long become very attractive – so much so that the country has been named as a country with the second-largest number of start-ups, succeeded only by the United States.
Finally, Israel has also made its standing in the global commodities market. It is currently successfully exporting packaged medicines, pesticides, integrated circuits, and many more. On top of that, Israel is one of the world’s largest exporters of diamonds, with the volumes making up for 23% of all diamond exporting in the world.
The national currency of Israel is the Israeli shekel (ILS), which has only been introduced in 1986 and was introduced to Forex trading in 2008. Although popular among the Israeli FX traders, the ILS is regarded as both a young and somewhat exotic currency to trade. If you are only just getting into the field of Forex trading, we recommend that you first try trading other, more popular pairs, such as the EUR/USD, or GBP/USD.
As you can already tell, the opportunities for trading in Israel are plentiful, and all you need to do is decide which one you would like to explore and pick the brokerage from the top Forex brokers list that we provided earlier,
As in many other countries, the main legal requirement that the Israeli traders need to meet in order to start trading Forex is being of the age of 18 or older. This requirement is completely justified, as FX trading is a risky financial enterprise, and the minors should definitely be kept away from it.
The only other requirements that one should expect are the ones issued by the brokerages that they end up choosing, and those do, therefore vary quite a lot. However, it is unlikely that the requirements of the broker will be too demanding, and you will most certainly be able to start trading in no time.
When it comes to the costs of getting started with trading Forex, one can say that it is both free and not free at the same time. It is free because the brokerage will not be charging you for merely signing up with it, however, you will still have to make your first deposit.
The minimum required deposit too, depends heavily on the brokerage that you will end up choosing. Ont thing to keep in mind here is that the amount of the minimum required deposit does not in any way define how good or how bad the brokerage is. You will find that the list of regulated Forex brokers in Israel will have the deposit requirements vary from the minimum of 5 USD and all the way up to 500 USD.
We suggest that you search for the brokerage that offers the requirements that you are most comfortable with, as it is of crucial importance to not deposit any more than what you can afford to lose.
The efficient regulatory environment is probably the single most important driver of the country’s FX market’s success and growth. When it comes to Israel, the lack of proper regulatory measures was exactly what impeded the Forex trading to pick up in popularity fast and establish itself as a strong component of the country’s financial sector.
The situation has definitely improved over time, and the number of scams has reduced drastically. Nevertheless, it is still a long way to go until trading Forex in Israel becomes safe for any party involved in it. Below, we will have a closer look at the main regulatory body in the country, and the measures that it takes to protect Israeli traders.
Established in 1968, the Isreal Securities Authority is the main body responsible for overseeing the smooth functioning of the local FX market. The body’s main goal is reinforcing investor protection, and it does so by adopting various laws, regulations, and guidelines based on the US securities laws.
If a broker is physically based in Israel and wishes to offer their services there, it is mandatory that they obtain a license from the ISA. In doing that, the brokerage has to successfully meet a variety of regulations that the body has in place, and, even upon receiving an official license, its activities will be closely monitored for the possibility of some illicit activity taking place.
In the sections to come, we will go into some further detail about the specific requirements that the brokerages need to meet in order to become a part of the list of best Forex brokers in Israel. As for now, we can confidently say that such regulations are incredibly (yet justifiably) strict, and the process of obtaining the license is extremely time-consuming and complex for the brokerages in Israel.
It is, therefore, unsurprising, that a significant number of brokers operating in Israel are neither physically based there, nor locally licensed. This should not appear as a potentially unsafe option to you – many international brokerages, especially those licensed with the Europe-based regulatory bodies such as the CySEC, are both qualified and reputable enough to offer their services harm-free.
So, should you choose an Israeli FX broker or should you go for a foreign one? There is no clear answer to that, as it depends heavily upon what exactly you are looking for in your trading sessions. If you choose the local broker, you are guaranteed that in case of a dispute, your query will be subjected to the local laws and regulations, which will make the process of resolving it much easier. However, you should not hesitate to join an international brokerage instead, if you feel like it will cater to your needs better.
The requirement for the broker to keep their funds separate from those of their respective traders is popularly used as a regulatory measure in countries across the world, and in Europe in specific.
Every single one of the best Forex trading platforms has to follow this rule strictly, and there is a good reason for it. In the past, when no such regulation was imposed, the traders would often find that their funds were misused by the broker, whether on purpose or not. Moreover, if the broker went bankrupt, the trader’s money that was kept together with the operational funds of the brokerage would end up either frozen or lost for good.
Luckily, with the requirement for the account segregation in place, traders in Israel are provided with an additional layer of security that is so needed in an already risky financial endeavor.
Many regulatory bodies demand their licensees to possess a certain amount of operational funds in place. This is done to ensure that the broker is not operating on the verge of bankruptcy, and, by doing that, putting the hard-earned funds of their traders at risk. However, Israel takes it one step further by having different requirements for the minimum operating capital for different types of licenses available.
In order to obtain a basic license, the broker will have to demonstrate the possession of 800 000 ILS or an equivalent of 200 000 USD. The consequent, “fuller” license will have the broker demonstrate the possession of 1 500 000 ILS ( around 380 000 USD), as well as have an existing partnership with the liquidity providers in order to protect itself from the market fluctuations. Finally, the highest license that the broker can get amounts to 4 000 000 ILS, or 1 million USD in reserves.
The provision of different levels of licenses is a great way for the ISA to both reinforce customer protection and boost the development of the local FX market by having brokers to aspire to obtain the highest license with the most access to various forms of trading.
Regulating any Forex market does not revolve solely around the need to reduce the potential for the broker’s wrongdoing against their respective traders. More often than not, the significant losses during the trading sessions are caused by the trader’s lack of experience and understanding of the certain tools of trading.
Among those is the controversial and widely debated leverage, that can both boost one’s profits or result in some of the most devastating losses. Like many other countries in the world, Israel attempts to limit the potential damage that the usage of leverage can cause by putting a cap on it.
Even the best Israeli Forex brokers will offer you a maximum of 100:1, and that will only be available for the low-risk assets. Assets regarded as the medium-risk ones will have a leverage of 40:1, while the high-risk assets will only be able to get 10:1.
In comparison to the other countries that are taking similar measures against the provision of unjustifiably high leverage, you will find that Israel is quite generous in its standards. Moreover, regardless of what your opinion on the leverage is, you should remember that the caps are only introduced with your best interests in mind.
Keeping the public informed of the potential risks and scams that can occur within the Forex trading market is a solid way to facilitate a healthy and safe environment for all. When it comes to Israel, the ISA utilizes a variety of channels to spread relevant information among the members of the general public.
One of the most effective ways of doing that is the ISA requirement for the Israeli Forex brokers in 2020 to offer a full disclaimer of the risks associated with trading CFDs and other volatile assets. In doing that, the regulatory body prevents those with little experience in trading from what can potentially become a lifetime of debt.
Finally, the extra mile to which the ISA goes in order to protect Israeli traders refers to making it mandatory for the local FX brokers to have a close assessment of the traders’ prior experience, financial conditions, and more. Although irrelevant at first sight, this measure is much more than just a nuisance. By evaluating traders case by case, brokers will able to determine which trading strategy works best for them and whether or not the high-risk trading tools and assets can be offered to them.
Overall, the state of the Israeli national economy is very impressive and suggests a plentiful of opportunities for the local traders. The local regulatory environment, although not yet ideal, is, nevertheless, sufficiently effective in implementing all the measures necessary to reinforce customer protection. Finally, the country’s top Forex brokers list is quite extensive and consists of both the local and foreign brokers with a significant degree of efficiency and qualification. If approached wisely, the Israeli FX market can definitely be very advantageous for the local traders.