Best Forex Brokers for Beginners in the Philippines 2023

The Filipino forex market is an active trade market with a daily average trading volume worth approximately $1 billion. Forex trading is a great way to make money, but it can be daunting for beginners, and there are so many factors to consider. In this article, we will provide you with a comprehensive guide to help you dive into the exciting world of foreign exchange, from choosing the best forex broker in the Philippines that suits your needs to understanding the basics of forex trading.

Top 10 Best Forex Brokers for Beginners in the Philippines

FXTM: FXTM offers a wealth of educational material that is available for free, including webinars, tutorials, articles, and a glossary of key terms. This can be especially helpful for beginners who are just starting to learn about forex trading. It also has a low minimum deposit requirement of $10 and a user-friendly web trading platform.

IG: IG offers access to over 80 currency pairs, providing excellent trading opportunities. It also offers a commission-free trading environment, which can be beneficial for novice traders who are looking to minimize their trading costs. Additionally, the broker offers a demo account, allowing novice traders to practice trading without risking real money.

Saxo Bank: Saxo Bank is known for its transparency and well-structured website that contains an education and training section with detailed materials on various financial markets. It offers low forex spreads and proprietary platforms, including SaxoTraderGO.

Exness: Exness has over 70 MT servers hosted in strategic hubs around the world that execute trades in under 25ms, which ensures fast execution of trades. It also provides its traders with a unique opportunity called the cost-saving feature, which allows traders to save on trading costs by choosing the most cost-effective payment method.

Pepperstone: Pepperstone provides access to advanced trading tools and services such as technical analysis and charting capabilities, and offers excellent client service, which ensures that any questions or concerns are resolved quickly.

Tickmill: With its low trading fees, wide range of financial instruments, advanced trading tools and services, and beginner-friendly demo account, Tickmill is an excellent choice for both novice and experienced traders alike.

IC Markets: IC Markets allows traders to use a variety of trading strategies, including scalping, hedging, and automated trading, and provides social copy trading platforms, which can be helpful for beginners who want to follow the trades of more experienced traders.

Forex.com: Forex.com provides its own flagship Advanced Trading (desktop) and Web Trading platforms, alongside TradingView, the full MetaTrader suite (MT4 and MT5), and NinjaTrader. It does a great job of centralizing its research within the Advanced Trading platform and keeping it organized for easy accessibility. Furthermore, Forex.com offers ongoing promotions to make trading with them more attractive.

Eightcap: Eightcap offers decent dealing spreads for the majors and major crosses, and provides negative balance protection, which ensures that traders cannot lose more than their deposits. Besides, Eightcap users can download Capitalise.ai's mobile apps for Android and iOS, which provide traders with access to code-free algorithmic trading.

FP Markets: FP Markets offers a range of unique features that set it apart from other brokers, from competitive pricing and educational resources to negative balance protection and multilingual customer support.

Comparison of the Best Forex Brokers for Beginners in the Philippines

Regulated Forex Brokers You can Trade in the Philippines

The Securities and Exchange Commission (SEC) of the Philippines has issued advisories stating that forex trading is illegal to discourage private individuals from engaging in speculative trading and to prevent local brokers from offering forex services without proper regulation. While it's true that no local broker is licensed to provide forex trading services, there is still a way for investors from the Philippines to participate in the exciting world of forex - by opening an account with a reputable foreign broker to access the global forex market.

Reputable regulatory bodies such as the Financial Conduct Authority (FCA) in the UK, the Australian Securities and Investments Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC), all put in place strict rules and regulations to safeguard the interests of investors.

In addition to the aforementioned brokers, more options of reliable brokers overseen by top-tier national regulators such as the FCA in the UK, ASIC in Australia, and CySEC in the Europe, include XM Group, CMC Markets, Plus500, FXCM, Admirals, ThinkMarkets, Vantage FX, RoboForex, FBS, and City Index, etc.

The Basics of Forex Trading Explained

- What Is Forex Trading?

Forex trading, also known as foreign exchange trading, is a global decentralized market which involves the buying and selling of currencies with the goal of making a profit from the fluctuations in their exchange rates. It has become extremely popular in recent years. 

Market hours: Unlike traditional stock markets that operate during specific hours, the forex market is open 24 hours a day, five days a week, allowing traders from around the world to participate at their convenience.

Market participants: The forex market is composed of various participants, including commercial banks, central banks, corporations, institutional investors, retail traders, and even governments. These participants engage in forex trading to facilitate international trade, hedge against currency risks, or seek speculative opportunities.

Leverage and margin trading: One unique aspect of forex trading is the availability of leverage. Leverage allows traders to trade with a larger amount of capital than they actually have, which can lead to greater profits if the market moves in their favor. However, it's important to understand that while leverage can amplify potential profits, it can also increase losses.

Factors affecting exchange rates: Exchange rates are influenced by a multitude of factors, including economic indicators, political events, interest rates, and market sentiment. Having a good understanding of the factors that affect currency values is essential for making successful trades in the foreign exchange market. Traders often use technical analysis, fundamental analysis, or a combination of both to make informed trading decisions.

Trading strategies: Forex traders employ various strategies to navigate the market. These strategies can range from short-term scalping to long-term trend following and everything in between. It's important to understand that there is no one-size-fits-all approach. Each trader must develop a strategy that aligns with their risk tolerance, trading style, and financial goals.

- What Are Currency Pairs?

In forex trading, currencies are always traded in pairs. The first currency in the pair is known as the "base currency," while the second currency is the "quote currency." For example, in the popular EUR/USD pair, the euro is the base currency, and the US dollar is the quote currency. The exchange rate is a measure of how much one currency is worth in terms of another.

- What Is a PIP?

PIP stands for "Percentage in Point" or "Price Interest Point." It is a standardized unit of measurement in the forex market used to quantify changes in the exchange rate between currency pairs. PIPs are typically the fourth decimal place for most currency pairs, except for the Japanese yen (JPY), where the second decimal place represents a PIP.

- How Do PIPs Work?

PIPs allow traders to measure both profit and loss accurately. Each movement in the exchange rate is measured in PIPs, and traders use this measurement to calculate their potential gains or losses.

For example, if the EUR/USD currency pair moves from 1.2500 to 1.2505, that's a five PIP move. Understanding PIPs is essential for risk management in forex trading. By knowing the value of each PIP, traders can determine their potential profits or losses and adjust their position sizes accordingly. It helps them make informed decisions about entry points, stop-loss levels, and take-profit targets.

Calculating PIPs is quite straightforward. For most currency pairs, one PIP equals 0.0001. However, for currency pairs involving the Japanese yen, one PIP equals 0.01. To calculate your profit or loss in monetary terms, you need to multiply the number of PIPs by the monetary value of each PIP.

For example, let's say you have a position in the EUR/USD currency pair, and it moves 50 PIPs in your favor. If your position size is 10,000 units and the monetary value of each PIP is $1, your profit would be $50 (50 PIPs * $1 per PIP).

It's important to note that PIPs can vary depending on the lot size you're trading. Standard lots typically have a PIP value of $10, while mini lots have a PIP value of $1, and micro lots have a PIP value of $0.10.

- When Is the Forex Market Open for Trading?

As mentioned above, the forex market closes on weekends. There are four major trading sessions in the forex market - Sydney, Tokyo, London, and New York. These are the largest trading centers, accounting for nearly 75% of FX daily volume. Their opening times are as follows:

Sydney Open: 7 am local time, Close: 4 pm local time

Tokyo Open: 9 am local time, Close: 6 pm local time

London Open: 8 am local time, Close: 4 pm local time

New York Open: 8 am local time, Close: 5 pm local time

When taken together, these sessions make up the 24-hour forex market, opening on Sunday at 5 p.m. and closes on Fridays at 5 p.m New York time.

- What Does Long Position Denote?

In forex trading, a long position refers to buying a currency pair with the expectation that its value will increase over time, which is a bullish attitude. When a trader takes a long position, they are essentially buying the base currency and selling the quote currency. For example, if a trader takes a long position in the EUR/USD currency pair, they are buying euros and selling U.S. dollars.

- What Does Short Position Denote?

On the other hand, a short position in forex trading refers to selling a currency pair with the expectation that its value will decrease over time, which is a bearish attitude. When a trader takes a short position, they are essentially selling the base currency and buying the quote currency. For example, if a trader takes a short position in the EUR/USD currency pair, they are selling euros and buying U.S. dollars.

- What Is a Forex Broker?

A forex broker is a financial services company that provides traders access to a platform for buying and selling foreign currencies. Forex brokers act as intermediaries between traders and the network of banks that have access to forex liquidity. They give traders access to foreign exchange markets and provide them with the tools and resources needed to trade currencies.

Forex brokers earn money by charging traders a spread, which is the difference between the bid and ask price of a currency pair. They may also charge commissions on trades or offer other services for a fee.

- How to Choose a Forex Broker?

Choosing the right forex broker is crucial for any trader who wants to succeed in the foreign exchange market. Here are some tips to help you select the right forex broker for your needs.

Regulatory Compliance: The first thing to check when selecting a forex broker is their reputation and regulatory compliance. A reputable forex broker will be authorized by regulatory bodies such as the FCA, ASIC, CySEC, and CFTC/NFA, etc.

Security: Security features vary from broker to broker. Some forex brokers use additional security measures, such as two-factor authentication, to protect their clients' accounts from unauthorized access. It is important to choose a broker that has a secure platform to protect your personal and financial information.

Transaction Fees: Look for a broker that offers competitive spreads and low transaction fees.

Trading Platforms: Forex trading platforms can be web-based or downloadable software. Look for a broker that offers a user-friendly trading platform with advanced charting tools and other features that suit your trading style.

Educational Resources: Reputable brokers offer a variety of resources for clients to make smarter decisions and improve their trading skills. Look for a broker with an educational section on the website with diverse webinars and tutorials on the fundamentals of forex markets, popular currency pairs, and market forces that generate buying or selling pressure.

Customer Support: Forex brokers provide customer support to traders to help them with any issues they may encounter while trading. Look for a broker that offers 24/7 customer support through multiple channels, such as phone, email, and live chat.

In conclusion, choosing the right forex broker is essential for any trader who wants to succeed in the foreign exchange market. Consider the regulatory compliance, security, transaction fees, trading platforms, educational resources, and customer support when selecting a forex broker. Don't rush into choosing a forex broker. Take your time and do your research to find one that is right for you, as a bad decision can be costly.