Trading worldwide currencies are the most straightforward definition of currency trading or forex trading. The term comes for FOReigner EXchange. Hedging against currency risk, keeping forex reserves, and profiting from price changes are why people trade on the forex market.
Forex trading has been significantly growing in popularity in the Philippines in the last decade. More and more retail investors are jumping into the online FX trading frenzy because of the high leverage and strong liquidity in this growing market.
Keep reading this detailed guide to learn more about the FX market in the Philippines.
Is Forex legal in The Philippines?
The bad news is that forex is not legally accepted in the Philippines as the SEC (Securities and Exchange Commission) declared it illegal. On the other hand, the good news is that international forex brokers accept traders from the Philippines.
With that said, traders from the Philippines have a chance to make money by exchanging currencies. If you are not too familiar with how forex takes action, look at the following example.
Example of How Forex Works
When a European travels to the USA, and they sell, let’s say, their €500 at the rate of $1.4 for each euro, they will get $700. If they don’t spend it, but the rate has gone from $1.4 to $1.3 for every euro, they can sell the $700 and get €538,5.
This is a fine example of how you can profit from exchanging one currency for another and vice versa.
Traveling for this purpose is not cost-effective, so online forex trading has gained so much popularity in the Philippines and other countries.
Finding The Best Brokers in The Philippines
There are numerous brokers in the Philippines, and each of them has strong and weak points. Traders need to recognize these traits before engaging with the broker they think is best for them. A simple way is to compare forex brokers via Brokersview to find the one for you.
Below are several most popular brokers in the Philippines.
Forex.com is generally the best broker you will come across. It offers low trading fees, allows you to pick between many strong selections of currency pairs, and has a minimum deposit of only $100. Moreover, while browsing through the platform, you can encounter top-notch search features that may be very beneficial.
The downside to forex.com is that it doesn’t offer any fundamental data, and some of the provided pairs are pretty expensive.
This broker is the best for fees as the trading fees are lower than the usual prices for both forex and CFDs. The platform is excellent for beginner Philippine traders because Pepperstone offers many educational resources, which can be beneficial while learning. Moreover, one of the best things is that you will not encounter minimum deposit requirements or non-trading fees.
However, the drawback for this broker is that the selection of forex pairs and CDFs is relatively small. Another thing that might push Filipinos away from Pepperstone is that although e-wallet transfers are as low as $1, the bank transfer expenses are $20 for traders outside the European Union and Australia. This directly affects traders from the Philippines.
IG takes the spotlight as it holds the title of the best trading platform for various currency pairs. IG got this name due to several advantages, including a vast selection of currency pairs.
In combination with the tons of available analytical and research tools, these perks are why Filipinos should consider trading on IG. Traders can have a minimum deposit of 250 of any currency in which the account is based. Here you will find 205 currency pairs, over 10,000 stock CFDs, and 8 Cryptos.
Keep in mind that the commissions might be less for quite a few pairs.
Not only in the Philippines but Interactive Brokers (IBKR) is among the top ten stock brokerage platforms in the USA. It offers one of the cheapest commissions and possesses an enormous selection of investments. Some more experienced traders may see the many features as a huge advantage, although inexperienced traders might find them overwhelming.
One of the most significant drawbacks Filipinos may encounter on IBKR is that it doesn’t offer card transfers. One more thing is that accounts under $2,000 have a maintenance fee of $20.
Trading in the forex market from the Philippines can be beneficial. This applies to your time, as you have to learn a thing or two and resources. Once you get it, pick the best broker for you and dive into the action.
Read also: Five Tips For Forex Trading Beginners