If you live in the Philippines and wonder how to start making money trading currencies, this article is for you. Forex is the largest financial market that has a lot to offer. Trading FX can become an additional source of income, allowing you to earn in your free time or make a living as a full-time trader. However, there are a few pitfalls you should know about. Read on to find out the best way to master forex trading quickly and reach your financial goals.
Key points
- Forex is a decentralized market for currency trading.
- The trading instrument of forex is a currency pair.
- Forex traders profit by making correct predictions about the future exchange rate of a currency.
- To start forex trading in the Philippines, one needs to open a trading account with a broker.
- Because of the vast span of time zones, trading takes place round-the-clock Monday through Friday.
What is Forex?
If you don't know already, forex or FX stands for foreign exchange and basically is the process of exchanging one currency for another. An equivalent of trillions of dollars is exchanged worldwide on a daily basis. Currency exchange is known to everyone, from an individual who exchanges money before traveling abroad to a huge corporation that makes payments in a foreign currency. However, when you hear "forex" most of the time, it means currency trading for speculative purposes. This is when an individual or institution buys and sells currency to make a profit from the difference in the exchange rate. Let's take a closer look at how the currencies are exchanged.
How are Currencies Traded?
If you wanted to buy $100 in the Philippines, you would have to pay for it in pesos. So the first thing you should keep in mind is that currencies are always traded in pairs. Currency pairs are usually shown like this: EUR/USD, where EUR is a code of European currency and USD stands for United States dollar. Since the EUR goes first in the pair, we understand that it is a base currency (the one we are buying or selling). The second currency is called quoted currency, and it reflects the price of the base currency.
The price itself is shown as a quotation, e.g., EUR/USD = 1.21091. This quotation basically means that in order to buy 1 euro, you need to pay $1.21091. When exchanging large sums of money, even the slightest price move makes a difference. The smallest change that can take place in a quotation is 1 point (the last number): 1.21091 – 1.21092.
It is worth saying that price trends are unpredictable. You never know for sure which way the price of a currency will move. To predict the future of the price, traders refer to fundamental and technical data. Being updated on major economic releases (fundamental analysis) and following up technical charts (technical analysis) help traders build a strategy and make sound trading decisions.
When Can I Trade Forex in the Philippines?
When you think of an exchange, you might imagine a place full of busy traders staring at the screens. Take the New York Stock Exchange, for example. Things are different with currencies. There is no single center where all money in the world comes through. Currencies are exchanged in many places at the same time. The actual exchanging sessions traditionally start on Monday in Australia and New Zealand and finish with the closing hours of the North American trading session. Because of the vast span of time zones, trading takes place round the clock from Monday to Friday.
Retail traders like yourself, if you get to the end of this article, exchange money with the help of brokerage services. Once you register with a broker, you can buy practically any currency pair you are willing to.
Get Started with Forex in the Philippines
To start forex trading, one needs to open a trading account with a broker. There are lots of forex brokers in the Philippines attracting people to use their services. Your task is to pick the best one. And when you hear "the best broker," you should take it as "a reliable broker that takes no commissions, has the lowest spreads, positive user feedback, and a convenient trading platform." That might sound like a lot, but a big part of your success depends on these factors. This is why you should spend some of your time comparing trading conditions and reading reviews.
How Much Money do I Need for Trading Forex?
To buy and sell currencies online, you need to have money on your account. The amount of your initial deposit depends on your broker's requirements. For example, the minimum deposit requirement on JustMarkets is only $1. Investing one dollar won't bring you much profit, but risking a lot of money in the initial stage isn't a good idea. Take your time to learn the basics, get familiar with a few strategies, and gradually increase your investment. People who go on like this eventually come to the point when they can make a living trading forex.
Read more: Can You Make a Living Trading Forex?
Learn to Trade Forex for Free
There is one way to practice trading without making any deposits. You can open a demo account on JustMarkets and learn currency trading with virtual money. Select the size of your virtual account and place as many trades as you need before you feel confident in your skills. It's the only risk-free way to practice trading forex. A teaching account will help develop a strategy before you risk any money. Once you have a strategy and sufficient knowledge, go ahead and open a real trading account.
Conclusions
Learning forex trading is easy if you take one step at a time. Start with the basic concepts, subscribe to our newsletters with daily analytics , open a demo account, and practice trading risk-free. Learning takes time, but it does pay off eventually. Open a trading account and build your future today!
Read more: Forex Trading for Beginners in 2022
About JustMarkets
JustMarkets is an international broker with clients from 197 countries. Millions of people have already opened trading accounts on JustMarkets to benefit from the best conditions, including low spreads, commission-free withdrawals, and a helpful team of support, working round the clock to ensure that each of our clients has the most convenient trading experience.
Open a demo account on JustMarkets to try your hand at currency trading. It's a risk-free way to learn to trade in the most liquid financial market. A teaching account will help you learn trading basics and develop your own strategy before you invest any money. Learn trading today to take care of your future tomorrow.
by , 2021.05.18