Forex day trading in the Philippines is definitely possible if there is a proper financial and trading plan. More and more Filipino traders are venturing into the global financial markets for opportunities. Before you start day trading, here are 5 key things you should know.
Developing a Forex Trading Plan
Before you start trading in currencies, it is important to have a game plan. A day trading plan should include short-term goals, risk management, tools, and analysis. Having a plan in place will help you stay focused and disciplined in reaching your goals.
Choosing A Reliable Broker
A reliable broker is crucial for day trading forex. Therefore, look for a reputable forex broker that offers low spreads and provides a powerful trading platform. VT Markets Philippines is a great option, as it provides a range of trading instruments and tools for day traders.
Practice with a Demo Account
A demo account allows you to test trading strategies and become familiar with the platform without risking real money. Once you are comfortable with your plan, you can start a live trading account.
Learn How To use Technical Indicators
Tools like technical indicators help to identify opportunities in Forex Trading. So, it is important for you to learn how to make use of them. Examples include moving averages, MACD, and RSI. Use these indicators to identify trends, support and resistance levels, and overbought or oversold conditions.
Practice good risk management
Trading is a high-risk activity; thus, practicing good risk management is always important. This includes taking profit and stopping loss according to your limits. Do not risk more than you can afford to lose; focus on maximizing your potential profits towards your set goals
Here are some sample data of day trading EUR/USD:
*Pictures and calculations are for illustration reference only. You should do your own research before trading with real money.*
Possible profit scenario of a short trade:
In this case, the closing price is 1.05236, the opening price is 1.05743, the trade size is $1000, and the leverage is 100:1. Plugging these numbers into the formula gives:
=(1.05236 – 1.05743) * $1000 * 100
= (-0.00507) * $1000 * 100
= $507.00 (50.7 pips profit)
So, with a trade size of $1000 and a leverage of 100:1, you would have earned a profit of $507.00 on this trade.
What Is The Minimum To Start Forex Day Trading?
The minimum amount required to start day trading depends on various factors, including the broker’s requirements, the markets you intend to trade, and your risk tolerance. Nevertheless, a good amount will range between $1,000-$5,000 to make significant impact for day trading.
Similarly if a long trade is made at 1.05743, with the trade closing at 1.05543. Trading $1,000 USD with a leverage of 100:1 will result in:
(1.05543 – 1.05743) * $1000 * 100
= (-0.00200) * $1000 * 100
= -$200.00 (-20 pips loss)
So, if the price of the long trade goes down by 20 pips, the loss on this trade would be $200.00 USD.
Try out your results with this Forex Calculator.
In conclusion, day trading Forex in the Philippines can be a lucrative source of passive income with the right financial planning. However, it is not recommended for individuals who are experiencing financial difficulties to trade with real money. With the right strategies, day trading Forex in the Philippines has the potential to become a career.
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