The Foreign Exchange market is the largest and most active trading market on the planet. You buy foreign currency at one rate and expect to sell it at a higher rate as a trader. Doesn’t it appear to be simple?
Forex trading may be interesting and profitable if you know what you’re doing because it’s a fast-moving market subject to a variety of influences. Learn to Trade has designed and developed a range of resources for novice and experienced traders alike, illuminating the complexities of the market as well as simple strategies to help you develop a strong trading career and make the best of your investment no matter what kind of capital you start with.
If you live in the Philippines and want to trade forex, you should be aware that the Philippines’ Securities and Exchange Commission (SEC) has taken a somewhat hostile position toward forex trading as a result of reports of fraud and large losses suffered by ordinary traders. In reality, the SEC has issued two advisory in recent years declaring that forex trading is illegal in order to dissuade private individuals and local brokers from trading currencies.
Continue reading to learn how to master forex trading rapidly and achieve your financial goals.
How to Begin Trading Forex in the Philippines
To begin trading forex, you must first open a trading account with a broker. In the Philippines, there are numerous forex brokers enticing customers to use their services. It’s up to you to choose the best one.
When you hear “the greatest broker,” you should think of “a dependable broker who doesn’t charge commissions, has the lowest spreads, positive customer reviews, and a user-friendly trading platform.” That may seem like a lot, but these aspects play a huge role in your success. This is why you should take some time to compare trading conditions and read reviews.
The following are the essential procedures you’ll need to take to make your first FX trade:
- Step 1: Get online using a device that has Internet connectivity.
- Step 2: Locate an online forex broker with a license to do business in the Philippines.
- Step 3: Put money into the account.
- Step 4: Make a deposit into a margin account.
- Step 5: Download a forex trading program that links to that broker.
- Make your deals in step six.
How Much Capital Do I Require to Trade Forex?
You must have funds in your account to purchase and sell currencies online. The size of your initial deposit is determined by the criteria of your broker. Justforex, for example, has a ₱53 minimum deposit requirement. You won’t make much money if you invest fifty pesos, but investing a lot of money in the beginning isn’t a good idea.
Take your time learning the fundamentals, familiarizing yourself with a few techniques, and gradually increasing your investment. People who continue in this manner will eventually be able to make a living trading forex.
Forex Trading Strategies in the Philippines
You will have a funded margin account with a broker that permits you to trade forex from the Philippines if you have completed the six steps indicated in the previous section. To improve your chances of success, you should design a trading strategy to incorporate into your trading plan.
There are five popular trading techniques described below that are acceptable for retail traders trading from the Philippines or anywhere else in the world.
High-volume, short-term trading entails quickly entering and departing the market to catch a few pips at a time. If you want, you can continue this technique multiple times a day.
To avoid the increased risk of overnight holdings, traders enter and exit trades during a single trading session. Trading decisions are frequently dependent on technical analysis, and if you want to make informed decisions, you must first grasp past trends.
Using tactics to profit from the extreme exchange rate volatility that occurs quickly after key news or economic data is released. Currency prices are frequently influenced by current events, and you must be aware of what is going on minute by minute while trading.
Is the practice of entering and exiting the market using momentum technical indicators with the goal of buying low and selling high. Swing traders can sometimes take positions overnight in the hopes of improving their position when the market opens the next day.
Involving a longer-term strategy that looks for established directional movements called trends and then trading along with them until the trend concludes. In these cases, you are trading for the future.
Philippines’ Best Online Forex Brokers
To trade currencies in the Philippines, you’ll need special permission, a large sum of money, and a bank with which to trade currencies. Most retail traders are ruled out as a result, although several online forex brokers situated outside the Philippines still allow Philippines-based clients, so you can investigate that option if you just have a little amount to trade.
International brokers such as FOREX.com, IG, and Interactive Brokers, for example, have been known to accept Filipino clients. If you meet a broker’s standards, you may be able to open an account and fund your margin account using PayPal or Skrill online payment services.
Due to the ambiguous legality of forex trading in the Philippines, using credit cards or bank wire transfers as a margin deposit method from the Philippines may be risky. Your forex broker should be able to help you with this.
Terminology in the Foreign Exchange Market
Forex traders, like many other professions, have developed their own lingo, which you should familiarize yourself with before beginning to trade. The following terms are among them:
- Lot size: 100,000 base currency units is the standard lot size. Margin calls occur when your trading account demands additional funds to keep your existing holdings open.
- Orders: These are the instructions you provide your broker to carry out trades on your behalf. Limit, stop loss, take profit, and market orders are just some of the order types available.
- Pip: Stands for point in percentage and denotes the smallest change in the exchange rate quotation of a currency pair.
- Pound sterling: The British pound’s moniker, despite the fact that it is no longer backed by silver.
- Short covering: When traders who are shorting a currency start buying as the price rises, this is known as short covering.
- Stop-limit order: A higher-priced order that permits you to profit before the currency falls further.
- Stop-loss order: A lower-priced order that helps traders to protect themselves from losses as currency prices decline.
- The symbol for the silver index in US dollars is XAG/USD.
- The symbol for the gold index in US dollars is XAU/USD.
- The return on your investment is referred to as the yield.
Does Trading Forex in the Philippines Make Sense?
You might want to think twice about trading forex from the Philippines due to the negative local regulatory environment established by the Philippines’ SEC. Although some retail forex traders have been able to use online payment providers to make margin account contributions, you never know when that loophole will be closed.
By opening a forex trading account with an international broker to trade in from the Philippines, you would be assuming an additional risk. Because trading any financial market entails taking some risk, this could be an additional risk you’re willing to face in order to trade currencies.