Best Switzerland forex brokers for 2024

The Significance of Choosing the Right Forex Broker

Selecting the right forex broker is of paramount importance, as it can profoundly impact your trading experience and success. Here’s why making the right choice matters:

1. Regulation and Safety: Swiss forex brokers are regulated by the Swiss Financial Market Supervisory Authority (FINMA), known for its stringent oversight. Choosing a broker regulated by FINMA ensures the safety of your funds and adherence to high ethical standards.
2. Trading Conditions: The trading conditions offered by the broker, including spreads, leverage, and execution speed, can significantly affect your profitability. Opt for brokers that provide competitive and transparent trading conditions.
3. Platform and Tools: A user-friendly and feature-rich trading platform is crucial for executing trades effectively. Additionally, access to analytical tools, charts, and educational resources can enhance your trading experience.
4. Asset Selection: Diversification is a key principle in forex trading. Ensure the broker offers a wide range of currency pairs, including major, minor, and exotic pairs, allowing you to diversify your trading portfolio.
5. Customer Support: Efficient customer support is essential for addressing trading-related issues promptly. Look for brokers that offer responsive customer support, preferably available 24/5 to align with the forex market’s operating hours.

Now that we recognize the importance of selecting the right forex broker, let’s review the top forex brokers in Switzerland.

The Top Switzerland Forex Brokers Reviewed

1. Swissquote Bank

As a Swiss-based broker, Swissquote Bank is synonymous with trust and reliability. Regulated by FINMA, Swissquote offers a wide range of forex pairs, competitive spreads, and advanced trading platforms. It also provides access to other financial instruments, making it a versatile choice for traders.

2. Dukascopy Bank

Dukascopy Bank is another Swiss institution known for its commitment to transparency and innovation. It operates the SWFX Swiss FX Marketplace and offers traders direct access to the interbank forex market. With competitive spreads and an array of trading tools, Dukascopy appeals to both retail and institutional traders.

3. Saxo Bank

While not headquartered in Switzerland, Saxo Bank serves Swiss clients and is regulated by FINMA. Saxo Bank’s trading platform offers access to forex, stocks, commodities, and more. With a comprehensive suite of research and analysis tools, it caters to traders seeking diverse trading opportunities.

4. IG Switzerland

IG Group, a globally recognized broker, provides services to Swiss traders through its Swiss entity, IG Switzerland. Regulated by FINMA, IG offers competitive spreads, a user-friendly trading platform, and access to a vast range of financial markets, including forex, indices, and cryptocurrencies.

5. Admiral Markets

Admiral Markets, while not Swiss-based, has a strong presence in Switzerland and is regulated by FINMA. The broker provides traders with a selection of trading accounts, including a flagship Admiral Prime account designed for professional traders. With low spreads and a variety of trading tools, it caters to different trading styles.

Is forex trading taxed in Switzerland?

Yes, forex trading is taxed in Switzerland. Foreign exchange fluctuations resulting in gains on import and export transactions, foreign currency loans, and forward exchange contracts are taxed as ordinary income.

Investing in Forex vs. Stocks

Forex trading is somewhat distinct from stock market trading. However, this is in no way a disadvantage. Indeed, there are numerous very large businesses operating in this area. It is also true that trading occurs nearly 24 hours a day, from 00:00 Monday morning until 23:00 Friday evening. For all major currency pairs, trading is brisk and predominantly volatile. However, it is not true that forex trading is exclusively for professionals; why should this be the case?

Consider the euro’s performance against the U.S. dollar as an example: What distinguishes it from, for instance, an index or a stock? Nothing.

The fact that you can trade here 24 hours a day, seven days a week, and that almost every significant currency pair has sufficient turnover are not disadvantages if you trade prudently, but advantages. Reasonable means: Obviously, you need a strategy; ideally, you should develop a small trading system and act consistently with stop prices, as in all other areas of the stock market. Then this is an incredibly intriguing investment opportunity. However, keep this in mind:

It is not uncommon for overnight price-moving events to occur. In fact, it is only 6 p.m. in New York, where many points are established, when it is midnight in Europe. There are numerous events that can affect the stock markets. The Asian stock markets are therefore only open at night. On the currency market, however, you can react immediately, such as on November 8, 2016, following the U.S. election. There, in the early hours of the morning, when it became clear that Trump, and not Clinton, would win, short-term trading profits were extraordinarily profitable.

Forex jargon – The key terms used in forex trading

One might believe that Forex traders have a specialized language that must be learned in order to keep up. In reality, however, there are only a few terms unique to forex trading that traders and/or investors do not encounter on a daily basis in other stock market segments. Here is a brief glossary of FX trading terminology.

Lot

A “lot” denotes the minimum amount of currency that one must trade when trading forex. The focus here is on “real” currency transactions, not derivatives trading. There, these sizes also apply to what is traded with individual units in CFDs, options, and futures, but the capital requirements are obviously vastly reduced. A lot consists of 100,000 units of a given currency pair. In addition, there are typically “mini lots” (10,000 units) and occasionally “micro lots” for large currency pairs (1,000 units).

Pip

One frequently reads that a trader earned “ten pips” on a currency pair. This is the smallest unit displayed for a currency, which is typically the fourth digit after the decimal point. Therefore, in Euro/US Dollar, a “pip” equals 0.0001 USD per Euro. For example, a move from 1.1300 to 1.1302 represents an increase of 2 pips, while a move from 1.1300 to 1.1320 represents an increase of 20 pips.

Spread

The spread is the difference between the bid and ask prices, or the difference between the purchase (bid) and sale (ask) prices. This range is extremely small, particularly in forex trading with the most popular currency pairs. It is represented by the “pips” mentioned previously. In Forex Chinese, the bid/ask spread itself, i.e. the current price, is referred to as “quotation.”

The Majors and Minors

“Majors” refers to currency pairs that are frequently traded and vital to the global economy, such as those containing the euro, yen, pound sterling or US dollar. Minor currency pairs are those that are traded less frequently, such as the relationship between the Norwegian krone and the New Zealand dollar.

Slippage

Slippage is the difference that can occur when buying or selling currency positions at the price actually displayed at the moment or given with a stop loss during extremely rapid price movements. This occurs infrequently, typically involving only a few pip movements… but can yield significant profits with extremely large positions.

How to become a successful forex trader?

Anyone can participate in forex trading and be successful. Basically, forex price movements obey the same laws as everything else that is listed on the stock exchange, which means:

• The foreign exchange market reacts to economic and political news.
• Successful forex traders are guided by chart and market specifications.
• And when things get hectic, the same thing happens as in everything else: traders begin to act emotionally and, as a result, make mistakes that a good investor can avoid by acting more prudently when others are not.

The only element that leads to a slightly different price behavior here is the very high number of extremely short-term market participants. There are a lot of big addresses that take positions worth millions, where it’s already worth taking a profit with four or five “pips” in the right direction. This activity by super-short-term players, who are also known as “pip traders”, means that the price picture in the intraday chart often appears quite erratic.

Forex trading strategies

As you’ve seen, becoming an active “normal” investor on the foreign exchange market is not rocket science. However, there is one thing you must consider before engaging in forex trading: what do you want to be? Trader or Investor? Can you and do you wish to take advantage of the opportunities provided by 24-hour trading on the foreign exchange market and trade price fluctuations? Or, would you like Forex trading to be an extension of your investment portfolio and a tool for implementing long-term trends?

Depending on your choice, you will employ very distinct strategies. But only one of the two is available. Because the characteristics of the foreign exchange market, most notably the continuous trading and the factor of the so-called “cross rates”, i.e. the automatic cross-connections of the currencies to and with each other (see also the article: ” FX in focus: the most crucial facts for foreign exchange trading “), necessitate that there is no middle ground between short-term and long-term action. So, what are your plans? Do scalping or investment for the long term?

Trend following via long-term investment

If you are uninterested in or simply unable to devote the time required to act as a high-profile trader capable of lurking for short-term impulses, trend-following is an option. Short-term foreign exchange market volatility is typically high; prices can rise sharply one day and fall sharply the next, making it difficult and sometimes impossible to achieve a medium-term trading level. But:

If you move up a level, to a longer-term time frame, you will discover that many currency pairs have long, intense trends that can be utilized effectively. This can be seen in the below chart of the US Dollar/British Pound exchange rate over a five-year period, which we will use as an example throughout this article.

Trend-following traders should favor weekly charts to avoid being irritated by erratic but ultimately non-trend-relevant price movements on shorter-term time frames. The graph also demonstrates that, regardless of whether you are active in uptrends, downtrends, or sideways movements, it makes sense to consistently use only the weekly closing prices to generate trading signals and make trading decisions.

Scalping

Scalping, which is ultra-short-term trading in which you anticipate short-term impulses, jump on those impulses, and take lightning-fast profits, is the polar opposite of long-term trend-following. One, two, or five minute time frames are typical there. As an illustration, consider the USD/GBP exchange rate over just two hours on April 18, 2019 (chart timeframe one minute per candlestick):

This brief time period alone exhibited numerous impulses. With the right strategy and consistency, anyone who enjoys “hunting” for such trading opportunities can achieve great success in the Forex market. Taking small and minuscule impulses on the so-called “pip level” is only worthwhile if you choose a correspondingly higher capital investment.

But how should one proceed here, what procedure and trading instruments would be appropriate? As a long-term investor, what is the optimal method for scalping?

Forex trading tools

In general, the more tools you have available, the better. Successful investors and traders utilize both traditional technical chart analysis and the market technology provided by indicators and candlestick chart formations. However, one thing should also be written on the flag:

Keep it simple: the simpler, the better!

“Keep it simple!” Using too many indications concurrently frequently produces contradictory signals. Therefore, it is recommended to concentrate on three or four tools and use their statements as a foundation for your own dispositions. As an investor, you must understand that no stock market system can be perfect. In addition, there are frequently completely unanticipated impulses that influence prices “from the outside,” such as political developments, central bank measures and/or comments, or unexpected economic data.

Therefore, it is crucial that not all signals result in a profit. But that is irrelevant as well. The deciding factor is that the majority of your trades are profitable… and that you limit your losses quickly and consistently when you do incur a loss. Which means that no system or trade may be operated or executed without the protection of a stop rate!

Tools for long-term investors

What type of signal generator is suitable for a long-term investor? The following graph demonstrates that less is more, and that a manageable number of indicators is sufficient.

In this chart, four tools are utilized:

• Using the traditional charting method with its trends, supports, and resistances.
• With the MACD trend-following indicator, a technical signal can be confirmed. In other words, you would only establish a long or short position if the MACD confirms such a signal from the charting technique.
• With a moving average, in this case the 200-day moving average, a short signal was generated in the spring of 2018 when the US Dollar/British Pound was repelled down at that line.
• And finally, one observes and employs the candlestick theory’s signals. Especially on a weekly basis, which is unknown to many market participants, there are quite a few of them, and they are also pleasantly dependable. There are a “Morning Star” and a “Hammer” on a weekly basis during the nearly two-year period depicted in the chart. These are extremely significant reversal signals, which, as the chart demonstrates, also indicate lower turning points.

Tools for short-term investors

Even on the shortest timescales, chart signals are ephemeral. Below is a five-minute chart of the US Dollar/British Pound exchange rate for the time period between 4:00 a.m. and 3:00 p.m. During this brief interval, only two “Morning Stars” and a completed top formation were displayed:

A second way to trade a system at the short-term level is with moving averages, which are frequently comprised of two or three lines, as depicted in the chart below for the 60-minute time frame over two weeks. On the foreign exchange market, such moving averages are also utilized by a number of trading systems developed by market leaders. However, you should then act with flexibility. Because computer-controlled trading systems independently shorten or lengthen the chart time grid, for which these moving averages are used, in response to increasing or decreasing volatility, traders must do so manually.

Consequently, it makes sense not only to test a system with moving averages in terms of the length of the respective average lines you are working with, but also to check throughout the day what the price is doing in relation to the time frame of the price development. In this case, the 60-minute level worked well within the specified time frame, but as previously stated, this can change.

Final word

Switzerland’s reputation for precision, security, and financial excellence extends seamlessly into the world of forex trading. Swiss forex brokers, regulated by FINMA, provide traders with a safe and trustworthy environment to explore the global currency markets. When selecting the best forex broker in Switzerland, prioritize factors such as regulation, trading conditions, platform quality, asset selection, and customer support. The Swiss approach to forex trading emphasizes reliability and adherence to high standards, ensuring that traders have a stable foundation for their forex endeavors. Happy trading!

Forex trading Switzerland FAQs

Are forex brokers in Switzerland regulated?

Yes, forex brokers in Switzerland are regulated by the Swiss Financial Market Supervisory Authority (FINMA). FINMA’s stringent oversight ensures that brokers comply with strict standards and provides a high level of security for traders.

What is the Swiss approach to forex trading?

The Swiss approach to forex trading emphasizes regulatory oversight, security of funds, the Swiss Franc as a safe-haven currency, and adherence to high standards of banking and financial services.

Do Swiss forex brokers offer high leverage?

Swiss forex brokers typically offer lower leverage compared to some offshore brokers. This is in line with FINMA’s regulatory efforts to protect traders by reducing the risks associated with high leverage.

Are there tax implications for forex trading in Switzerland?

Taxation on forex trading in Switzerland can vary depending on individual circumstances. It’s advisable to consult with a tax professional to understand your specific tax obligations related to forex trading.

What is the best trading strategy for forex beginners in Switzerland?

For beginners in Switzerland or anywhere else, it’s essential to start with a solid understanding of the forex market, practice risk management, and consider starting with a demo account to gain experience before trading with real money.