In an uncertain global market driven by COVID, South Korea is actively examining its forex policies. The quick actions of the Bank of Korea (BOK) and other financial regulators during the crisis helped to avoid initial market panic from spreading. The country’s positive relations with the U.S. and China have also helped to stabilize its financial market even considering the won’s exchange rate against major currencies.
As a result, many forex brokers are able to offer commission-free trade executions in South Korea. Because the country is also well-positioned in the middle of 3 huge forex exchanges — Japan, Singapore and Hong Kong — South Korean investors can easily access the Asian trading session. South Korea is also a wide-open market for alternative foreign investments like the green market, flexibility which helps to fortify the won.
Get Started with Forex in South Korea
You can trade forex reliably in South Korea through the following steps:
1. Connect to the Internet
You need a strong internet connection to participate in the forex market. The best strategies don’t matter if you can’t execute the investment when you want, and you will need good internet to connect to your forex broker and trading platform.
2. Choose Your Forex Broker
There are many offshore brokers that operate in South Korea. These companies should be regulated through the financial authorities in their countries or through international organizations.
3. Connect Your Broker to Your Bank
Your forex broker facilitates your investments using money from your other bank accounts. You will need to hold money in your investment account in order to facilitate timely investments.
4. Fund Your Broker Account
Be sure to choose a forex broker that allows timely withdrawals of your funds. Check the online reviews of the broker before funding your account.
5. Choose a Trading Platform
You can choose a 3rd-party trading platform and work with your forex broker or use the user interface that your broker controls.
6. Start Trading Forex
Your forex career begins with your 1st trade. However, reputable brokers will allow you to practice with a virtual account before investing with real money. Using a virtual account with fake money allows you to get used to the interface and how the market moves.
South Korea Forex Trading Strategies
Now that you have your setup to properly trade forex, you can begin to dig down into the strategies that will help you profit. These trading strategies will provide a framework for you to apply your daily tactics. Choose the one that is most appropriate for your personality and risk tolerance.
Momentum trading is a short-term technical investment strategy that focuses on capturing profit from a strong trend. Momentum traders ignore uncertain economic activity and focus on currencies that are moving in 1 direction. The direction could be up or down. This kind of momentum usually corresponds with an important change in the economic or political climate of the country backing a currency — an internal policy change, acts of war, political upheaval or a significant change in gross domestic product (GDP).
Swing traders capture short-term trends regardless of what those trends may be. If you are trading a swing, you may hold a position for a few weeks at a time. The trend may not be straight up or down as in momentum trading; the currency may trade in a range. This kind of activity may correspond more with normal economic activity, which is an important skill to learn. The natural ebb and flow of currency exchange provide smaller opportunities to profit, but those opportunities are much more frequent.
The position trader is looking past short-term trends into the long-term activity of a currency. An expanded investment horizon usually smoothes out the short term fluctuations of day-to-day news cycles and events. The primary trend of a currency will likely continue for months or years barring a huge event, and long-term investors can profit from the irregularities in daily movements and the primary trend.
Forex Trading Example in South Korea
KRW/USD is trading at 0.00083/0.00087. You want to buy ₩500,000 now and sell when the price goes up. The margin rate for the currency pair is 9.22%. You will need $39.19 cash in your account to control ₩500,000 with these terms.
After 11 hours of market activity, you want to sell because KRW/USD is trading at 0.00095/0.00099. This is a 0.8 point increase, and your final profit is $40 —
(KRW500,000 x 0.00095) – (KRW,000 x 0.00087).
Making Money with Forex in South Korea
When you know what kind of investor you are, you can dive more deeply into the financial vehicles used to profit in the forex market:
- Short selling: The traditional way of earning profit in forex is known as trading the “long” side. The short side involves selling a currency first at a high price before buying it back more cheaply later.
- Contract for differences (CFDs): CFDs follow the price changes of currencies. If you buy and sell using CFDs, you never own that currency. However, the changes in price affect your account value in the same way.
- Binary options: These are yes and no scenarios that provide investors with the chance to win or lose a large percentage of an investment in a short time.
Best Online Forex Brokers in South Korea
Choose from the best-regulated forex brokers to ensure the security of your trades and the protection of your personal information:
- securely through Forex.com NON US's websiteBest For:Forex Trading in and Outside the U.S.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- securely through eToro Forex's websiteBest For:Demo Accounts
CFD trading is not available to U.S. users. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
You will need to know the terms that investors commonly use to represent important ideas in forex:
- Pip: The smallest division of currency allowed in the forex market, equal to $0.0001
- Lot size: The amount of currency in your forex orders
- Orders: The description of how you will buy and sell currency in the market
- Calls: A contract between a buyer and a seller to transfer a certain amount of money on a certain date at a certain price
Trade the Foreign Exchange Market from South Korea
Forex South Korea plays a huge role in the$1.934 quadrillion global forex market although its currency is not considered one of the world’s strongest. As a central point of exchange between countries that don’t get along, the won is a great place to inhabit if you are looking to profitably move money and increase your personal financial value.
We want to be your hub of the world’s latest forex news and strategies. In order to succeed in forex, you should keep abreast of the changes that are sure to come. Bookmark this page and come back to the website for daily updates.
Frequently Asked Questions
Can you trade forex in Korea?
Yes, you can trade forex in Korea. Forex trading is available through many online brokers. The Korean government has recently introduced regulations that restrict the amount of leverage traders can access when trading forex, but these are still far more generous than those found in other countries.
Does Korea tax foreign income?
Yes, Korea does tax foreign income. The taxation of foreign income in Korea is regulated by the Income Tax Act and the relevant Presidential Decree.
Get a Forex Pro on Your Side
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