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Formerly a part of the Soviet Union and now the European Union, Poland has always seen economic growth. Facing several market reforms and the fall of the USSR, the Polish Market gained its strength throughout all this time and became one of the strongest financial markets in the world. Its regulatory body is the Polish Financial Supervision Authority (PFSA), and strictly regulates all Polish Brokers.
Best Forex brokers in Poland
Warsaw Stock Exchange
Poland’s Financial Market can be explained without mentioning the Warsaw Stock Exchange. It was founded in 1817 as the Warsaw Mercantile Exchange; later, it became the Warsaw Stock Exchange in 1991, when it started trading. Warsaw Stock Exchange (WSE) is a joint-stock company in Warsaw, Poland. Being the largest stock exchange in Eastern Europe, it provides a powerful platform for Polish Brokers to trade.
Trading In Poland
The Polish Financial Market offers options to trade with local Polish Brokers or international brokers. Both offer advantages; one must ensure that the brokers are regulated as it will ensure the safety of the trader’s funds and prevent any misconduct. If something happens, the trader can rely on the authority to resolve the issue only if the broker is regulated. Although the International brokers of the European Union are widely popular for their reputation, local traders prefer Polish Brokers over international brokers.
The Polish market has a wide variety of offerings in the market. Traders can choose from CFDs, commodities (agricultural and metals), cryptocurrencies, forex pairs (polish brokers trade in the Polish national currency ‘Zloty’), and stocks. Apart from these, traders, especially infant traders, also have the option of Demo Accounts. As the name suggests, Demo Accounts do not require the trader to put in his capital but to practice and learn from it by trading in Poland and other international Financial Markets. It would teach him the tricks and necessary moves to help him in the long run in trading.
Advantages and Drawbacks of the Poland Financial Market
The Polish economy is a mixed economy with a strong focus on exports. The country is a member of the European Union and the eurozone, and its economy is closely linked to those of other European countries.
The Polish stock market is one of the largest in Central and Eastern Europe. Banks, energy, and telecommunications companies are the most actively traded stocks on the Warsaw Stock Exchange.
The Polish forex market is also relatively large, with around $10 billion daily trading volumes. The most actively traded currencies in the Polish forex market are the Euro, the US dollar, and the Polish zloty.
The following are some of the characteristics of the Polish economy, stocks, and forex market:
- Strong export sector: Poland has a strong export sector, which accounts for around 40% of GDP. The country’s main exports include machinery, vehicles, and chemicals.
- Open economy: Poland is an open economy, with trade accounting for around 60% of GDP. Germany, the Czech Republic, and Italy are the country’s main trading partners.
- Volatile currency: The Polish zloty is relatively volatile, making it difficult to trade. However, the volatility of the zloty can also provide opportunities for traders.
- Growing middle class: Poland has a growing middle class, driving consumer goods and services demand. This is positive for the Polish economy and its stock market.
Being one of the largest economies in the European Union, Poland’s Financial Market has a lot to offer. Ranked 40th in dealing with construction permits, 32nd in credit facilities, 25th with insolvency resolving, and in the top 5 for trading across borders, Poland is among the most suitable countries for international traders. English is spoken widely here, resolving the issues of even communication barriers. With Technology Parks and Special Economic Zones (SEZs), businesses have many opportunities to grow with the ever-growing economy.
Advantages:
- Growing Economy: As one of the fastest-growing economies in the EU, Poland offers ample opportunities for investors.
- EU Membership: Poland’s membership in the European Union brings political and economic stability, allowing for seamless trade and business operations with other EU countries.
- Skilled Labor Force: The country boasts a well-educated and skilled workforce, providing a conducive environment for business and investments.
- Infrastructure Development: Over recent years, Poland has seen considerable development in its infrastructure, improving the business environment.
- Diversified Market: The Polish financial market is diversified, spreading across different sectors such as manufacturing, services, and technology.
Drawbacks:
- Regulatory Uncertainty: There can be regulatory uncertainty, particularly related to the interpretation of tax laws and the independence of judiciary systems.
- Political Risks: While part of the EU, Poland has had conflicts with the bloc over issues like judicial reforms, potentially adding an element of political risk.
- Currency Risk: The currency in Poland is not the Euro but the oty. This presents a currency risk for foreign investors due to potential fluctuations in exchange rates.
- Emerging Market Volatility: As an emerging market, Poland may experience greater volatility compared to more mature economies.
- Dependence on External Economies: Poland’s economy is highly dependent on external factors, especially the economic health of the EU and Germany, its biggest trade partner. This dependence can make it vulnerable to external shocks.
Although starting a business is deemed reasonable, getting electricity, paying taxes, and protecting minor investors can be troublesome. With Brexit and the transition period on its way, it cannot be neglected that it will impact the European and Polish markets. The Czech Republic, France, Germany, Italy, Netherlands, and the UK are Poland’s major trading partners, and with Brexit, there will be some alterations in such relationships.
With so much to offer and the regulators’ security, Poland’s Financial Market is where traders will earn and learn a lot. With the large and dynamic economy, SEZs offering business opportunities, ease of communicating in English, and the regulatory body safeguarding the investors’ money, the market has a positive conclusion for those seeking suggestions.
Types of Trading Accounts In Poland
Poland has various trading options and accounts for the traders who wish to trade in this market. CFDs, cryptocurrency, commodity trading, ETFs, and forex that the trader can discuss with his broker to better understand their trading options.
- Cryptocurrency
Poland has recently improved its internet technology. With that, cryptocurrency paved its way into Poland’s Financial Market. Being a new market member, cryptocurrency has gained wide popularity among traders, with Bitcoins worth USD 6 Billion being traded every other day. But its future purely depends on the legal policies of the government.
- Commodity Trading
Poland is a potential member of the commodity market by providing raw materials, including agricultural commodities, energy, and metals. These raw materials are widely imported and exported globally, especially in developing countries where these commodities are needed on a large scale. Poland is active in commodity trading and keeping up with the growing demand for these commodities.
- Forex Trading
Although there were rumors that Forex trading is banned in Poland, it is very legal and has a massive market with over USD 5.1 Trillion being traded daily worldwide. Forex trading in Poland has enormous potential because of the high competition between brokerages, extensive internet coverage, and the latest and improved technology. This reduces the cost of trading in forex and provides easy access to the market. However, the trader must always ensure that their broker is regulated to ensure their investments and prevent misuse or misconduct.
Since the income from forex trading is obtained from the country, it is taxable after a certain level of profit is made by foreign investors. It is advised to contact a Tax professional in Poland to understand the taxation policy to prevent any disagreements with the government. There are some reservations and exceptions in the case of different accounts. For example, if a taxpayer has stayed in use for more than 183 days, the tax can be paid in the US.
- Islamic Trading Accounts
Islamic trading or accounts are special accounts offered to people wishing to follow the Quran. Brokers generally do not prefer offering such accounts because they are less profitable. The demand is relatively minor as, according to Islam, paying or receiving interest (Riba) is prohibited (haram). But Polish Brokers offer such accounts by Sharia Law ( Islamic law banning the collection of interest). They are also known as swap-free accounts to respect the Muslim faith that does not offer rollover interest in overnight positioning.
What Can a Trader Expect While Trading in Poland
With the growing internet technology and a strong economy, Poland attracts many investors, offering them opportunities in finance and business. Even with such positive aspects, knowing about trading and leverage is always advised. One can always opt for a demo account. To practice trading before going entirely into the market. One must always ensure that their selected broker is regulated and suitable to your portfolio’s needs. The Poland Trading Market can now defraud unsuspecting investors due to technological advancement and trading digitization. But one must not be permanently blind to the fact that there will always be profit. High leverage can give you both negative and positive outcomes. But the Polish Brokers take measures by offering their traders to stay away from such losses through stop-order and negative balance protection, which will help diminish the losses to a great extent.
Selecting The Polish Broker
While selecting a broker, traders must consider the following factors that will help them understand their broker more accurately and make them more confident in their decision-making process.
- As said before, ensure that the authority regulates the Polish Broker you select and that all his actions are conducted under the regulatory body. The broker may also have the skills and knowledge of arbitration, which can help the trader in any disagreements in the market.
- What resources and connections does your broker have in the international market to help you when you need someone to communicate in your language for a better understanding?
- Understand the positions and presence of the Polish Broker in the international market.
- Customer support is also an essential factor to consider in the broker’s position in the market. Better customer support reflects the working ethics of the broker, which can give positive feedback to the broker.
- Trading experience of at least two years is considered worthy of considering a broker for trading. So, look for a Polish Broker with a history of 2 or more years in the Poland Financial Market.
- The broker must also be able to process the funding within 2 or 3 days as it will help prevent any delays during withdrawals, which can be a hassle and a time-consuming process sometimes.
If the trader opts for an international broker, they must ensure an international regulatory body regulates that. In Polish Brokers, they are regulated by the Polish Finance Supervision Authority (PFSA).
Important Questions
Before selecting a broker, the trader must be sure to get answers to the following questions to match the requirements of his trading plan with those of the broker. The questions are:
- What trading platforms can the Polish Broker offer you?
- What are the funding methods used by the Polish Broker?
- What is the Customer Support Level of the Broker? (more than 15 acceptable)
- What is the minimum deposit requirement?
- If the broker is offering, what is the spread type?
- How much is your limit to trade with each brokerage?
When selecting a Polish Broker, careful consideration of every aspect and every broker’s character is essential. Sometimes, the trader’s knowledge and education are insufficient to select the perfect broker the trader can rely entirely on with his funds. In such cases, it is wise to look for a broker who is an industry leader well-versed with the latest technological improvements and changes in the market. Apart from these, getting information based on the below-mentioned features of the brokers is equally necessary for selecting a suitable broker and having access to the financial markets.
He is an expert in financial niche, long-term trading, and weekly technical levels.
The primary field of Igor's research is the application of machine learning in algorithmic trading.
Education: Computer Engineering and Ph.D. in machine learning.
Igor regularly publishes trading-related videos on the Fxigor Youtube channel.
To contact Igor write on:
igor@forex.in.rs
