I have been trading forex for quite some time now. Just like you, I was also once a beginner, searching guides and tutorials on how to get started forex trading in the Philippines. I decided to create this small blog to share my forex trading journey, and also with a goal of guiding Filipino aspiring forex traders on the right path.
So what I’m going to do in this blog post is basically just share with you all the steps that I did go through in getting started with forex trading in the Philippines. I’ll make sure to answer all your questions about this topic. But of course, if you still have questions, please don’t hesitate to leave them in the comment section at the bottom part of this page.
Some of you might prefer watching videos instead of reading this whole entire blog, so I decided to also create a video series tutorial. You can start the video series by watching the first video below:
What is Forex Trading?
Forex trading simply means buying and selling (or exchanging) of foreign currencies and making profits with the currency price movements. It has the largest liquid market in the world, with over six trillion dollars on average transactions every day.
If you know stock trading, which is buying and selling of stocks, forex trading is conducted in the same manner. But instead of stocks, foreign currencies like USD, CAD, JPY, among others, are being trade.
There are a total of 180 different kinds of official currencies in the world available to be traded in the forex market. With the help of our forex brokers, we will be able to access the forex market anytime and anywhere (as long as we’re connected to the internet) using a tool that our forex brokers make available for us, like Metatrader 4 and Metatrader 5.
How Does Forex Trading Work?
Since forex trading is just basically buying and selling foreign currencies, it doesn’t mean that you need to go out and buy yourself foreign currencies from banks or money exchangers. Foreign currency prices change very little. The changes in the price of forex are called PIP (Percentage In Point) which means changes in the fourth digit of the currency price after the decimal point.
If currency prices change just in decimal points, that means you need to buy a massive volume or amount of currencies for you to make profits with the very small movement of the forex prices. This is what happens if you’re going to do it with the help of banks and money exchangers which we should not be doing.
Instead, what we should do is create a forex trading account with an online trusted forex broker that will bridge us to the forex market and enable us to trade anywhere and anytime. We will tackle more of these later. But first, we will discuss how forex trades (buy and sell) work.
There are two forms of forex orders or trades in the forex market, which are the “buy trade” and the “sell trade”. I’m going to explain both of these as simple as possible since it sometimes confuses forex trading beginners, especially the “Sell Order”.
Here's How Forex Buy Trade Works
As I have mentioned above, before we can do any forex trading, we need to have a forex broker. Always keep in mind that there are thousands of forex brokers out there; some are good and some are just there to scam people, so always be careful. I have a detailed blog post about the best forex broker for us Filipino forex traders, which you can read later if you’re interested.
You can also create your trading account with the forex broker that I’m using by simply clicking the button below. They are the best forex broker in the Philippines.
As you remember, the forex prices change very little. What’s going to happen when we placed a forex trade is that our broker will help us by allowing us to borrow an amount from them (without any interest) for us to buy more volume and make profits with the very small movement of the currency prices.
The amount you can borrow from your broker will depend on how much your trading account balance is, and the leverage you choose when you created your forex trading account. Always remember that your balance or equity will be eaten once you’re losing in a trade.
You’re going to place a buy or long order if you think that the price of the base currency is going to be more valuable against the quote currency in a span of time.
Depending on your account leverage and equity (account balance), your broker will allow you to borrow a certain amount for you to be able to buy more volume and make profits with small movements or price differences of the currency pairs you’re trading. The amount that your broker let you borrow doesn’t come with any interest, and all this happens automatically.
Here's How Forex Sell Trade Works
You’re going to place a SELL or SHORT t order if you think that the price of the base currency is going to be less valuable against the quote currency in a span of time. Again, depending on your account leverage and equity, your broker will let you borrow an amount of the currency you’re selling, and it happens automatically when you place a trade. Still no interest.
For example, you’re trading the currency pair EUR/USD. If you think that the EUR is going to be less valuable than the USD in a period of time, then you place a SHORT order. That would mean that you are selling EUR. If your prediction is right that EUR is going to be less valuable than USD, then you will buy it again at the lower price and make profits from the price difference.
If you’re wrong with your prediction (in our example) that EUR is going to be less valuable than the USD, then you will be buying more expensive EUR which will be taken against you.
Always make sure that before you start trading, you already know the important basics about forex trading: setting up your stop loss, lot calculation, or how much (in percentage) are you willing to risk from your account balance in one single trade.
Forex Trading Philippines For Beginners 2022
Now that we already know what is forex trading and how it works, let’s go ahead and talk about how to get started with forex trading in the Philippines. This is going to be a step-by-step guide, and we will be covering every detail that you need to know in every step of the process.
1. Have Enough Knowledge About Forex Trading
Forex trading is one of the best ways to multiply your hard-earned money, but it could also be your worst nightmare; you can lose all your savings if you jump in without enough knowledge about it. This is the most common mistake among beginners. After watching a handful of YouTube videos, they just go all in excitedly and ended up burning their trading account.
It’s necessary for you to develop your own trading strategy (learn fundamental and technical analysis), risk management, and most importantly trading psychology. There are a lot of free resources to learn all these forex trading essentials, or you can also enroll in a paid course to learn everything and become a profitable forex trader.
Most forex brokers also have free resources that you can access once you create an account with them. The forex broker that I’m personally using even offers free webinars and seminars, specifically for us Filipino aspiring forex traders, where they teach forex trading strategies for free.
Forex brokers also offer a demo account where you can practice your strategy before trading a real account using your hard-earned money.
2. Best Forex Brokers In The Philippines
Choosing your forex broker is also as important as our number one step that we should always keep in mind in forex trading. There are hundreds of known forex brokers out there, and all of them claim as the best. I have been through a handful of them, created an account, and tried their services but I’m only going to share with you the best forex brokers in the Philippines that have specific features for us Filipino forex brokers.
Before I go ahead and share with you the best forex broker in the Philippines, let’s first talk about what makes a good forex broker, or to be considered as the best. Below are the things that we should keep in mind on choosing our forex broker:
- Licensed and Regulated Broker
- Offers a Demo Account
- Flexible Account Type Choices
- Adequate Customer Service
- Ease of Deposits and Withdrawals
Considering all the factors above on what makes the best forex broker, below are the two forex brokers that I would suggest for you guys.
1. XM.COM Forex Broker
I personally use xm.com for the majority of the time in my forex trading journey. As I have mentioned above, I have tried a handful of different forex trading brokers in the Philippines. But I have considered XM as the best of them all, and here’s why.
XM started last 2009 and they have over 5 million clients in 190 different countries, the Philippines being one of them. What I love about XM is that they have features that are specifically just for us Filipinos. You can easily fund your trading account and withdraw your profits using GCash, they have free webinars and seminars with Filipino native speakers/teachers, and many other features that make them the best forex broker in the Philippines.
Visit XM’s website for more details about them and see all details that make them the best forex broker in the Philippines. See their awards and the company’s achievements for the last 13 years of their existence.
Once you open a trading account with XM, they will assign you a native account manager where you can ask all your questions about forex trading or XM through email or live call. They also offer a demo account where you can practice yourself before trading a real account with real money.
2. eToro (Best Copy Trading Platform)
If you don’t have time to learn everything about forex trading and do forex trading yourself, you can also try copying traders with proven track records and earn passive income. The best broker in the Philippines that does offer copy trading is eToro.
The downside of copy trading is that you don’t have control over what trading instruments are going to be traded, and you will be relying on someone else’s skills and knowledge about trading. Aside from that, most of the available traders to be copied has huge minimum startup capital for you to be able to copy them, like $500 to $1,000 fund to your account. Unlike forex brokers like XM, you can start an account for as low as five dollars.
Other traders who don’t want to learn forex trading and do it themselves are using forex EA (Expert Advisor), where all they need to have is their trading capital and expenses for their trading EA software. Forex trading EA is a piece of trading software that you just need to install on your trading platform, and it will trade automatically for you 24/7. We’ll just have a separate blog post for more on this.
3. Installing Your Trading Platform
I would suggest that you should first trade using a demo account. You need to know how to use the trading platform or the app that your preferred broker has. Learn the tabs and functions of the trading platform. The user interface is loaded with lots of buttons and tabs that are sometimes confusing, especially for beginners.
After you have successfully signup for a trading account with XM, you need to validate your account by submitting valid IDs (government-issued IDs) and proof of address. Watch the video below for more details about creating a trading account with XM.
XM will send you an email where all your account details are included. This will be the second email that you will receive from them after you created your account, and you have to make sure that you save it. After that, you need to install the trading platform you have chosen during your account creation. XM also has a mobile app that you can also use for your trading, depending on your UI preferences. But usually, the majority of forex traders are using MetaTrader 4 or Metatrader 5.
You can also join the forex Telegram channels below where you can get free trading signals. Just make sure to treat it as an additional resource to cross-reference your trades. It’s not guaranteed but you can actually make profits with them, just wait for the signal and apply your own strategy.
Is Forex Trading Legal In The Philippines 2022?
As of the moment, there are no known government regulatory bodies that control forex trading in the Philippines, so the short answer to this question, of whether forex trading is legal in the Philippines, is no.
The Securities and Exchange Commissions release an advisory last October 2018, advising the public to stop engaging in forex trading due to the increasing number of individuals being scammed by their broker or by other people who pretend to be a mentor, salesmen, agents, or account managers.
Securities and Exchange Commissions only regulate Philippine stocks, securities, stock brokers, dealers, etc. It’s completely up to us if we’re going to get involved in forex trading. But we should always keep in mind that there are big risks in forex trading and that we might lose our hard-earned money. It’s recommended that we should have enough knowledge about forex trading, and it’s our responsibility to choose a legitimate forex broker.
Best Time To Trade Forex In The Philippines
The forex market is open twenty-four hours a day, except on weekends. Below are the best times to trade forex in the Philippines. You should avoid forex trading on Friday and Sunday afternoons although the currency market is normally open. This is because there are often not many people trading on the currency market. With bigger spreads, the liquidity will be relatively limited .
- 3:00 pm – 4:00 pm PHT > When both the Tokyo and London markets are open.
- 8:00 pm – 12:00 am PHT> When both the New York and London markets are open.
- 7:00 am – 2:00 pm PHT> When both the Tokyo and Sydney markets are open.
I guess that should be it for this blog post. I hope I was able to share everything that you need as a beginner. Please let me know in the comments if you still have questions.