There are a growing number of people that are interested in trading in Forex in the Philippines. In this guide we take a look at what Forex trading is, the market in the Philippines and how to get started with trading and developing your strategy:
What is Forex trading?
Forex exchange is the process of changing one currency into another. Forex markets exist as spot cash markets, as well as derivative markets that offer options, futures and currency swaps.
Forex market participants use it to speculate on geopolitical events, hedge against international currencies and to diversify their portfolios. It is one of the most liquid and traded markets in the world, with the average turnover being more than $5 trillion US dollars globally each day.
Forex Trading in the Philippines
The Philippines is a South East Asian country with an emerging nation economic status. As more people become interested in participating in this market, more international online brokers have begun to accept traders from the Philippines.
SEC Forex Authorization in the Philippines is managed by the Securities and Exchange Commission. Due to reports of fraud, they have previously taken an adversarial stance against forex trading in the country.
You are unlikely to find any local brokers in the Philippines due to the country’s complex legal status on the matter. However, online broker platforms are beginning to accept used from the country.
While trading forex from the Philippines may be a little more complex when compared to trading in other countries like the United States or United Kingdom, there are still good options for newcomers that want to get started with Forex trading.
How would a newcomer get started in Forex Trading in the Philippines?
Secure internet access
Your very first step to becoming a Forex trader is to ensure you have access to a device with a reliable high speed internet connection. Many broker sites are now optimized to work across different device types, including phones, tablets and computers.
This device will also be essential for keeping up with any geopolitical events that might impact on currencies and your trading decisions.
Find an online Forex broker
If located in the Philippines, you will need to look for an online international broker rather than a local one. Search online to find a broker site that is regulated, licenced to operate and able to accept users in the country.
There are comparison sites that can help you to do this and you may wish to select an online broker based on recommendations from people you know.
Set up an account and add funds
Follow the site’s instructions for setting up and adding funds, ensure you read all notices the site provides and that you understand and accept the risks that come with trading.
Final steps
You can then proceed to download the app for the trading platform that your broker connects with and begin to make trades. It is always wise to start with a demo account as a newcomer, so that you can learn how to trade Forex before you start trading real currency.
Why should you consider Forex trading?
There are many benefits to Forex trading to grow your wealth. Depending on the location you live, there are often better tax benefits in comparison to other methods.
The Forex market is also open 24 hours a day whereas the stock market generally has more limited operating hours.
The high volatility of the market can also create many exciting opportunities for traders in Forex.
What are the best strategies?
There are a range of strategies that Forex traders can use, as you become more experienced you will be able to identify which strategy works best for you. These are some of the best and most used types of trading:
Day trading
Day trading involved entering and exiting a trade within the same day. This can avoid some of the extra risk that is involved with overnight positions.
Scalping
This involved trading at a high volume, entering and exiting very quickly and capturing just a few pips each time. This process is usually repeated multiple times in one day.
News trading based on current worldwide events
This strategy makes use of the extreme market changes that take place around any big political or economic news events. You will need to stay on top of the news everyday to take full advantage of this strategy.
Trend trading
Trend trading is more of a long term Forex strategy. This involves looking for established directional movements (also known as trends) and trading along with them until they are over. In this strategy you are trading for the future.
Final thoughts
There is growing interest in Forex markets and Forex trading in the Philippines. For those looking to start trading, there are many online platforms to support you and once you have set up your account, ensured that you understand the terminology and different strategies, you can begin to make trades.
Source: Plato Data Intelligence: PlatoData.io
