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Are you based in the Philippines and want to trade forex? Theres a valid question about the legality of trading forex in the Philippines, but heres a hint: Trade through international brokers based outside of the Philippines.
The Philippine Securities and Exchange Commission (SEC) issued an advisory in 2016 and again in 2018 that stated that foreign exchange trading isillegal in the Philippines. The advisory was issued after complaints of steep losses exceeded initial deposits on the forex market.
The SEC also intended to avoid investor losses due to people representing themselves as experts and acting as brokers or agents of brokers without Philippine regulatory licenses.
The advisory also cites a Philippine Supreme Court case that states that gains made frommarket fluctuationswere purely gambling and declared null and void by law. The advisory concludes by encouraging people to report others operating foreign exchange trading and those acting as agents of these operators to the Commission.
Despite the ban, more experienced Philippine forex traders have no intention of closing their existing accounts. They claim that the SECs advisories were simply designed to discourage the general population from opening accounts with local unregulated experts and that they merely impose possible administrative fees to be levied if not in compliance.
Forex trading is not like investing in stocks where you can only lose your initial investment. You may beliable for more than your depositif the trade goes significantly against you and is not automatically closed out when your account hits a zero balance.
Forex trading also has a fundamental component due to its exposure to news of the countries issuing the currency. For example, a gross domestic product (GDP) release for Japan can have a significant effect on all currency pairs that include the Japanese yen.
For example, if the release beats market expectations, then it could positively affect the yen. On the other hand, if the GDP release fails to meet market expectations, then that could adversely affect the Japanese yens value relative to other currencies. This type of news, as well as geopolitical news and central bank decisions, can result in considerable volatility in currency pairs.
Trading in the forex market is not for everyone, sodo some researchand try trading in a virtual or demo account to see if forex trading is for you. Keep in mind that knowing how to trade forex is just as important as choosing the right broker.
You have your choice of a number of available methods when you learnhow to trade forex. The first method includes online educational resources provided by manyonline brokers and educational companies. You can also educate yourself through many books and ebooks currently available online.
Another option for learning how to trade currencies consists of joining a social trading website likeeToro, for example. You can study other tradersforex trading strategiesand help you formulateyour own trading plan. You could also follow or mirror another traders transactions and execute them in your own account.
Like all businesses, knowing what youre getting involved in after youve opened and funded your trading account can make a significant difference in whether you produce profits or losses.
It typically pays to know when to trade and which are thebest currency pairsto trade in each of the different trading sessions because youre in a massive market with a daily turnover of more than $5 trillion that stays open 24 hours a day, 6 days a week.
You could probably still open an account with aregulated and reputable online brokerbased outside of the Philippines. You should also have a U.S. dollar-denominated bank account and an account at PayPal, Skrill or other online payment company to fund your trading account.
Regardless of where a forex broker is located, the best forex brokers generally share some of the following features:
Another important element to consider is the brokers trading platform. A demo account with a prospective broker will give you an idea of how its trading platform works.
Many brokers offer popular third-party platforms, in addition to their own proprietary platforms. These options typically include MetaTrader 4, NinjaTrader and cTrader.
Our list of the best brokers for Philippines-based traders includes 2 brokers based in the United States, one based in the U.K. and one with several offices in major financial centers. All of the brokers listed below are reputable and havecompetent regulatory oversightfrom at least one major forex regulator, and they may also be regulated in more than one jurisdiction.
These online brokers also have their website, trading platform and customer service available in English. FXCM Indonesia was the only broker reviewed with information in Tagalog (Filipino), so it offers some support in your native language.
This U.S.-based forex broker has more than430,000 customersworldwide and accepts clients from the Philippines.
FOREX.comasks for a minimum deposit of $50 by bank transfer, check or debit card, so online payment services are not supported.
This premium U.S.-based broker accepts clients from the Philippines and caters to more experienced teractive Brokersoffersone ofthebest trading platformsin the business and highly competitive commissions and margin rates.
In addition, you can trade a wide range of tradable assets in over 120 world markets.
Interactive Brokers offers leverage on forex trades of up to 50:1 and is well regulated by theNational Futures Association (NFA)and theCommodities Futures Trading Commission (CFTC)for forex trading. Interactive Brokers accepts bank transfers, checks and debit cards for deposits, which may preclude its use by Philippine traders who want to use online payment companies like PayPal.
Read Benzingas full Interactive Brokers Review
FXCMaccepts clients from the Philippines. It hasregulatory oversight by the U.K.s FCA, the Australian Securities Industry Commission (ASIC)and the Financial Board of South Africa (FSB).
You can also open an account with either the Australian FXCM, which offers high leverage of up to 400:1 or you can open an account with the U.K. FXCM with leverage of only 30:1. FXCM in Australia asks for a minimum deposit of $50, while FXCM in the U.K. asks for a minimum deposit of $300.
FXCMs trading platforms include NinjaTrader and MetaTrader4, as well as its own Trading Station platform. Funding methods include bank transfer, debit/credit card, Skrill, Neteller, Union Pay and Bpay.
The U.K.s IG has high marks among Philippines-based forex traders and is one of the leading international brokers that accepts clients from the Philippines.
IG offers excellentdealing spreads on currency pairs. You can also trade commodities, ETFs, stocks, indices and cryptocurrencies. IG has oversight from the U.K. Financial Conduct Authority (FCA) and is also overseen by a number of other international regulators. IG allows different leverage ratios depending on your country of origin.
The broker requires aminimum deposit of $250 USDand accepts credit cards, bank transfers and PayPal for initial deposits.
Trading in the forex market carries risks not found in other tradable assets like stocks. You buy and sell an asset at a price and often remain unleveraged when you trade in the stock market. On the other hand, the forex market requires you to use leverage and position yourself long or short based on an exchange rate view in the forex market.
Your losses are generally limited to your investment when buying stocks but can be much greater when trading currencies on margin if you do not have negative balance protection in your forex trading account.
Also, know that many experienced traders based in the Philippines have disregarded the advisories issued by the SEC, but a crackdown on forex traders in the Philippines might occur in the future.
Expand your knowledge of how the forex market functions with Benzingas guide onhow to read forex charts, orthe best forex indicators to use.
$5 per trade, Per-share pricing: $0.006-$0.01 per share ($1 minimum per trade) based on trading volume, Unbundled pricing: $0.002-$0.01 per share ($0.50-$1 minimum) based on trading volume
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