Forex trading and its myths

The influence of mainstream media on our society and its understanding of the industry can never be understated. By perpetrating stereotypes and spreading unverified information, mainstream seldom covers the entire forex industry and has glorified online trading in Philippines as a money-spinning industry. While the forex exchange is highly lucrative, several misrepresented facts have led to myths about the industry that have been highly circulated and advertised. Contrary to what gets wrongly advertised on the walls of social media, trading has a few myths that should be debunked in order to ensure that hundreds of novice traders do not enter the industry and make losses due to inexperience.

7 Common Misconceptions about the currencies market

1. Becoming rich is easy. On the contrary, 90% traders tend to lose their initial investment.

2. Forex trading means Day trading. Long trades are allowed as well and making money from them requires less effort and more planning.

3. Market may be rigged. The currencies market is too huge for any single player to manipulate it.

4. 100% success rate is possible. 100% success rate is impossible. Even the best traders can’t post such high rates of success.

5. Trading using news is sufficient for profits. News reports are just one part of fundamental trading. To discern the right pattern, traders need to track other important factors as well.

6. Using more pairs assures better returns. Online trading with a single pair or two is the best way to focus on the financial instrument and predict its movement accurately.

7. If you can predict the market, you can get rich. Predicting the market is impressive. However, to register profits, traders must execute the trades perfectly.

Traders need to ensure that they get their understanding of the FX trading platform right before they venture into the market. This can help them ensure that they do not fall prey to falsely advertised myths and pay a heavy price. It is always advisable for novice traders to request the guidance of experts before they take up Forex trading. For traders who are looking to take up online trading in Philippines, partnering with reputed Forex brokers like WesternFX can help them know about the workings of the industry in detail and make an informed choice when they take up trading.

The Five Different Ways to Invest in the Forex Trading

With the spike in popularity of online investments, an increasing number of investors and individuals looking to make money are turning towards the currencies exchange. The Forex exchange market, one of the largest in the world, handles transactions exceeding over $5 trillion a day. The sheer size and the vast promise it holds has caused people in the Philippines to sit up and take notice of the online trading world. 

However, while many want to enter the Forex market, there’s one thing that holds them back – the ‘how’ factor. How to get started? How should I choose the right option for my needs? How can I make profits? Instead of losing yourself in the maze of these questions, start getting answers and engage in Forex trading in the Philippines.

Here are the five different ways you can make your entry into the market:

#1) Open an account with a broker

One of the easiest ways to get started is to engage in spot trading a currency pair. For this, you’ll have to open a trading account with a Forex broker in the Philippines. Once you open the account, you receive an online trading platform, wherein you can receive live price feeds and open/close positions in real time. If you’re new, it’s advisable to make use of the resources and leverage provided by WesternFX and its feature-rich account.

#2) Foreign currency futures

This type of trading includes a futures contract wherein the currency exchange rate is considered the underlying asset and involves buying or selling a specified amount of currency at a pre-determined date and price. While the degree of leverage is lower than the spot market, it is nevertheless highly regulated and is a viable option for those who are not comfortable with spot Forex trading.

#3) Currency Options

A foreign currency option gives the holder a right to engage in Forex exchange transactions but is not an obligation. An upfront cost called a premium has to be paid to obtain this right and entitles the holder to exchange money in one currency into another at a pre-agreed exchange rate. Also, the inter-bank deposit rates and the current spot price of the currency pair play a role in determining the option’s price.

#4) ETFs and ETNs

ETFs (Exchange-traded funds) can be associated with a single currency or a group and are deployed in cash deposits. For ETFs that use futures, some amount of extra cash is invested in bonds. ETNs (Exchange traded notes) are debt instruments wherein price fluctuates based on the changes in the underlying exchange rate.

#5) Foreign currency time deposit

In this, traders benefit from the interest as well as any appreciation in the price of the currency. While foreign currency time deposits may seem like a lucrative investment opportunity due to the high-interest rates involved in online trading, in some cases, any depreciation brought about in the value may negate the returns earned.

Invest wisely with WesternFX

Whether you want to trade in Forex futures, options or engage in spot trading, WesternFX, considered one of the best Forex brokers in the Philippines, can guide you through it. Start your journey on the FX platform with us today.

3 powerful Forex trading strategy that can make you money

A simple online search for ‘Forex trading strategies’ is bound to yield hundreds and thousands of results. Every trader has a unique plan to approaching the Forex trading market in the Philippines.  To a beginner, the sheer volume of available resources, articles, and the knowledge database might seem intimidating. But there’s an easier way! Instead of trying everything and achieving nothing, stick to strategies that actually work.

Here are the top three Forex trading strategies in order of their increasing complexity that can prove useful in providing a profitable outcome:

#1) The 40 pips pull back scalping strategy

It’s easily the simplest and something just about anyone could do – and that includes beginners. Here’s how it works: you need to observe the market closely and see if a currency pair moves 40 pips in any one direction from the opening.  Now, all you need to do is peg your opening in the opposite direction. Why? Because the FX platform cannot move in a single direction for long and has to take a turn. With this strategy, you can gain a minimum of up to 15 to 20 pips.

#2) Buy above and sell below the MA

If you’re accustomed to the Forex trading world, you might already be aware of Moving Averages. You can adopt a better than usual approach to using MA. If the candle is above the moving average in the chart, make a buy, and if it’s below it, make a sell. You also need to prescribe the appropriate Profit Target and the Stop Loss so that you don’t end up making impulsive decisions and can limit your losses if any.

#3)  Fibonacci Forex trading strategy

This is one of the most complex Forex trading strategies used by traders in the Philippines, yet can prove useful if mastered. Find the most recent swing high and swing low, naming it A and B. Find appropriate AB swings and set Fibonacci in both directions. Watch the retracement from AB swing and wait for it to unfold. Then you need to observe the following:

•    Price must reach 5 WMA (Weighted Moving Average)

•    It must touch at least 0.382 Fibonacci retracement level

•    Price should not close above (uptrend) /below (downtrend) of 0.618 retracement line.

If these criteria are met, enter the trade long if the candle is closed above 5 WMA and short if it’s closed below

It might take some time to master these strategies and make money from the online trading in the Philippines. It’s not advisable to put real money on the line and instead trade with a Forex demo account, practice, refine, improve and only then use a live account. WesternFX, an award-winning Forex broker, provides the best platform for it!

A Guide to Understanding Forex Charts

The Forex trading market is possibly the most advanced platform in the world, utilized by millions around the world. There are numerous instruments and tools that help to evaluate the market, including charts and analysis. Among charts, the three major types would be line charts, bar charts, and candlestick charts. Most platforms come with these charting tools equipped onto them, and to be successful in the sport, one would certainly need to master the art of charting. 

Charting from brokers

Charts allow traders to gain insight into updated information regarding the currency movements. With a majority of Forex brokers in Philippines, one can access a range of charting tools for a better understanding of currency prices. When identifying a broker, one must make a survey of the trading and charting tools and ensure that the mechanisms are sophisticated enough to support your process. 

When it comes to reading and utilizing charts provided by your online trading broker, there would be three broad steps to take, and we’re going to be going through them one by one below.  

Identifying your currency pair

One would need to determine your currency pair and the time frame that you require. After this, the values on the chart would reflect the time period that you set. You would then be able to examine the movements in the currency price values over the designated time frame. 

Find specific chart structures

The second step is to forecast price movements in the future. This can be done by examining the charts with the use of indicators such as Fibonacci numbers, stochastic oscillators, moving averages and others. There are a variety of indicators one can choose from and the typical brokerage would enable you to also integrate your own preferred indicator. 

Unearth movements in the chart

The last step would be to unearth movements in the market by reading the patterns on the chart. By doing this, a trader can identify trends in the price patterns and successfully project movements in the prices for the future. This, in turn, allows you to position your transactions and the elements around it in the right manner. 

Partnering with a leading broker can help you understand charting and gain a better comprehension of it. WesternFX provides Forex trading services to clients in the Philippines and many other Asian nations. Get in touch with to see how this field can broaden your income!

Four Essentials for Money Management in Forex

Money management is one of the essentials of Forex trading in the Philippines. It helps one mitigate risk and sustain profits over a longer course of time. When formulating a strategy consistent with the requirements of online trading, it is important to include a plan for risk management as well. This provides traders with the opportunity to make more informed decisions that can guard their profits and improve the financial status of their account. In this article, we’re going to be discussing money management and a few ways to achieve it. 

Refrain from raising risk levels

The first method in accomplishing this would be to keep the risk parameters consistent. In other words, ensure that your position size remains stable even when profits start flowing in. Most traders tend to pump in more capital into a trade when it turns profitable. This is an easy way of having your profits erased in a trade.

The principle that traders tend to follow is to dabble in a higher scale of risk when their trades become more profitable. Contrary to the popular trend, keeping one’s risk consistent can eliminate chances of losses caused by unexpected, sweeping changes in the market. Furthermore, when traders raise their risk levels after a series of wins, they are almost always in an attitude of overconfidence. However, when looking at it from a purely logical standpoint, one would see that there is no reason that one trade would favor you just because the previous one did. Battling the sense of arrogance that comes after wins can help save you loads of money. 

Make regular withdrawals from your account

People who make a living through trading would be used to withdrawing money from their accounts. In other words, they would not hesitate to deplete the money in their account. This is helpful in enforcing the first principle that we had discussed – not raising risk. Withdrawing money from your account helps to psychologically regulate one’s appetite for risk-taking. A trader who regularly withdraws money would be unlikely to inflate the risks associated with that very account.

Avoid moving the stop-loss to the break-even zone

The only instance when one should move his stop loss to the point of break-even is when there is a rationale based on the price movement to support it. If not, tightening this order could potentially turn the transaction into a losing one. 

Understand when to allow a profit to go on

Being able to predict the range of a market is instrumental in letting a trade go on during a fertile market period. There are rare instances when the market would be moving in a favorable direction for much longer than you intended, and being able to identify these areas is crucial to making large profits. When being able to foresee such a time, you need to restrain your fear and let the trade go on. 

These are some of the ways money management can help one improve profits. If you need more guidance on the area of money management, then team up with the reputed Forex brokers to forge your path. WesternFX is among the best names in this space, with a presence across multiple countries. Join us to upgrade your game and master online trading in the Philippines.