Published: October 6, 2020 | Updated: October 12, 2020 | Posted by: Moneymax | Personal Finance
Want to trade in the forex market to earn money from home? It isn’t as simple as it sounds. Trading foreign currencies can be very risky—the potential for losing your funds is as high as the potential for earning a profit. To help you manage risks and execute your trades, you need to find a forex broker in the Philippines before you even begin trading in the FX market.
Your broker will play a critical role in your forex trading journey. Thus, it’s important to understand how forex broker Philippines works and know the best options available.
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A forex broker is a financial services company that works as a middleman between traders and the foreign exchange market by executing buy or sell orders placed by their clients. Aside from forex, brokers also enable their clients to trade on other assets such as stocks, indices, commodities, metals, and cryptocurrencies.
Typically, FX brokers are international companies based abroad. But even without a Philippine-based headquarters, some forex brokers can serve Filipino clients because all transactions—from account opening to fund withdrawals—are done online.
Forex brokers offer a range of services that makes trading foreign currencies easier and more affordable for their clients.
To trade currencies in the marketplace, you need to set up a trading account. A forex broker Philippines lets you do that, so you can start trading forex online.
FX brokerages make forex trading platforms available to their clients for placing buy and sell orders, which brokers will execute. The MetaTrader 4 (MT4) forex trading software is widely used among traders today. In addition to MT4 integration, some forex brokers in the Philippines also offer their own proprietary trading platform.
Most forex trading sites have beginner-friendly features such as educational tools and resources to help first-timers learn the ropes of trading currencies. They also provide a free demo account that new traders can use to practice trading using virtual money without risk. For advanced traders, demo accounts enable them to test new strategies.
Some brokers also offer a copy trading feature (also called social trading) that allows inexperienced traders to automatically replicate the trades of successful traders. In doing so, newbies learn from the pros. Experienced traders also benefit from copy trading, as it allows them to earn more money by selling their trading signals.
Traders can borrow money from their broker to buy a larger volume of currencies with a smaller capital. This forex broker service is called leverage, which is expressed in a ratio. For example, if your forex trading account is leveraged at 100:1, this means you can trade 100 times the amount you put into your trade.
Forex trading platforms provide traders with the necessary data to track and analyze the market, so they can make the best trading decision.
In return for the services they provide, forex brokers in the Philippines make a profit in two ways: collecting bid-ask spreads and charging fees.
Unlike stock brokers, most forex brokers don’t charge any commissions. Instead, they take a cut from executed trades through spreads.
A spread is the difference between the bid price and the ask price for a currency pair. The bid price is the highest price a buyer is willing to pay, while the ask price is the lowest price a seller is willing to accept.
Spreads are calculated in pips (short for point in percentage), which is the fourth decimal point of a price. For example, if the EUR-USD pair is priced as 1.1000 bid and 1.1015 ask, the difference is 0.0015 or 1.5 pips—this is the spread that the forex broker will collect for performing the trade.
Whether you gain or lose on your forex trade, your broker will still make money on the spread.
FX brokers also earn from charging different fees from clients. Here are the common forex broker Philippines fees traders may incur:
Here are the top-rated global brokerage companies that serve clients in the Philippines. They make it to this list of the best forex broker Philippines because they are highly regulated, charge low fees, and/or have excellent trading platforms and research tools, among other features.
eToro caters to millions of forex traders of all experience levels in over 140 countries including the Philippines.
The MetaTrader platform is not available on the forex trading site, but eToro’s own social trading platform is more than enough because it’s innovative and beginner-friendly. Through a social news feed built into the forex trading site, eToro users can follow and interact with fellow traders to broaden or share their knowledge.
FOREX.com is a US-based broker that operates in over 180 countries with 430,000+ customers worldwide. It performs trades fast, with 99.78% of trades executed in less than 1 second and average execution speed of 0.05 seconds. The forex broker also provides high-volume traders with benefits such as up to 15% cash rebates on trades. Thus, FOREX.com is ideal for active traders who buy and sell currencies in large volumes.
XM Global is a multi-awarded and highly regulated online forex broker with international licenses in five jurisdictions and serving over 3.5 million clients from 196 countries including the Philippines. Forex trading is made easy with a wide range of research tools and a low minimum deposit of only five dollars.
IQ Option has more than 48 million registered traders from 200+ countries, including the Philippines, with 1.3+ million trades executed daily. In the absence of MetaTrader platforms, IQ Option offers its own mobile trading platform customized to the user’s trading needs.
The forex trading site features a demo account (with refillable virtual funds worth USD 10,000) that allows for unlimited practice. This helps new traders learn forex trading at their own pace with no risk.
Unlike many online forex brokers in the Philippines, IQ Option does not charge rollovers for holding positions overnight.
Established in 2006, AvaTrade is one of the pioneers of CFD trading on commodities, stocks, and indices. Today, it serves 300,000 registered users globally and executes over three million trades monthly.
With 15 years of trading experience, FP Markets offers consistently tight spreads from as low as 0.0 pips on the major currency pairs. Account opening, deposits, and withdrawals are easy and quick.
With more than 10 years of forex trading experience, NordFX manages over 1.5 million trading accounts from almost 190 countries. Its fast trade execution of 0.5 seconds makes it the best forex broker Philippines for those who trade large volumes of assets. NordFX offers copy trading for people who want to try passive investing.
FXTM was launched in 2011 and now has more than three million clients from 180 countries. The company offers copy trading and a wide selection of trading instruments and forex educational tools.
Registered and licensed in Seychelles, Oinvest allows traders to trade over 350 instruments, including forex, in multiple global financial markets.
Choosing the right forex broker Philippines is just as important as knowing how to trade currencies. Take your time researching and comparing different online brokers to see which one is the best fit based on your trading needs and preferences. Finding a forex broker Philippines will take time and effort but research is important to ensure you trade with a platform you know and trust.
With a goal to help Filipinos lead healthier financial lives, Moneymax regularly publishes tips and tricks on personal finance and lifestyle, among many other topics. For more finance-related news and articles, follow Moneymax on Linkedin.