Thailand’s growing economy and expanding business community makes this country ideal if you want to trade in the forex market. This is the reason many international forex brokerages have already established a presence in Thailand and offer websites and trading platforms translated into Thai.
If you plan to trade forex from Thailand, be aware of several elements that differentiate Thailand from other developing countries where forex trading takes place. The Thai financial system continues in its early stages of development and currently has oversight from the Bank of Thailand (BOT) and the Thai Securities and Exchange Commission.
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Overview: Trading Forex in Thailand
Trading forex from Thailand has some restrictions that are not shared by other countries. The most important element to take into account is that speculation in Thailand’s national currency, the Thai baht ฿ (THB) is strictly forbidden by law. Despite this fact, trading forex has become extremely popular in Thailand.
To avoid any legal issues with trading forex in Thailand, many online forex traders in Thailand use a virtual private network (VPN) or virtual private server (VPS) account to access their online forex broker. The developing Thai financial system took a major step in 2017 when the BOT began reforming its foreign exchange regulations. In its press release dated June 5, 2017, the central bank stated its aims, “to allow the private sector to conduct foreign exchange transactions and foreign exchange hedging based on their own internal risk management and control policies within the framework set by the BOT.”
The BOT currently issues only one type of foreign exchange license: the Authorized Juristic Person license. According to the BOT, that license is for “commercial banks and juristic persons established by specific law and authorized to transact business relating to foreign means of payment.” Other than that licensing process, no additional oversight for forex brokers currently exists under the Thai authorities.
How to Start Trading Forex in Thailand
Before you begin your forex adventure in Thailand or anywhere else, you should be aware that trading in the forex market generally has no bearing on your physical location as long as you take into consideration the restrictions mentioned above. To begin trading forex, you should first have an idea of the currency pairs you plan to trade. Forex trading differs considerably from trading in commodities, futures, the stock market or any other capital market.
Although technical analysis methods remain virtually constant, the forex market also has its own dynamics, fundamentals and underlying principles that have little in common with other financial markets. Therefore, the first thing you need to trade forex is knowledge. Once you have done your research, read up on how to trade currencies and feel comfortable getting your feet wet. Look for a broker that fulfills your particular needs as a trader.
Step 1: Consider Your Needs
Many international brokerages have a presence in Thailand, and some brokers have translated their websites and trading platforms into the Thai language to accommodate Thai forex traders. Even those who maintain their websites primarily in English may also accept traders from Thailand. Remember, not all forex brokerages are created equal, so carefully consider your needs before opening an account.
Your requirements will depend largely on the level of experience you have in forex trading. For example, if you have years of experience using the MetaTrader 4 or 5 platforms and use expert advisor software developed for it, then you would probably feel comfortable with a broker that offers one or both of these trading platforms. On the other hand, if you have limited or no experience, then you would be better off finding a broker that offers educational resources and a responsive customer service department.
Regardless of your experience level, you should open a free demo account with any broker under serious consideration. Trading in a demo account gives experienced traders a good idea of the broker’s dealing spreads, order slippage and its response time to orders. Furthermore, demo trading gives an inexperienced trader direct insight into the forex market and the trading experience that you otherwise might not acquire through educational resources.
Step 2: Pick a Broker
Besides meeting your needs, several other considerations should be taken into account before you pick a broker. The most important factors you should consider before opening an account with a broker can be seen below:
The first and most important consideration consists of the security of your funds, which involve the broker’s reputation and a reputable regulatory agency that oversees its operations. Most foreign brokers that accept clients from Thailand have oversight from a variety of good international regulatory agencies, such as the U.K.’s Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), the U.S. National Futures Association (NFA) and the Australian Securities and Investment Commission (ASIC).
The bid/offer spread, also called the dealing spread, is generally used by most online forex brokers that act as market makers to make their money. They do this by buying at the bid side and selling at the offer side of the exchange rate for any given currency pair. If you’re an active trader, then keeping your costs down can affect your bottom line. A broker that offers competitive dealing spreads will keep your transaction costs low, which should improve your trading profitability.
Type of Broker
A market maker will take the other side of your trade and may offset any substantial trades with other market makers. In contrast, an ECN broker has access to an electronic communications network where market makers display a number of bids and offers, with the best exchange rate used to fill a trader’s order. Most ECN brokers charge a small commission on top of the narrower dealing spread you pay to trade through them.
Most online forex brokers offer the MetaTrader 4 and MetaTrader 5 trading platforms by MetaQuotes, in addition to their own proprietary platforms. The MetaTrader platforms offer a complete technical analysis suite that features many popular tools for trading. Also, the trading software is completely customizable and can be automated to trade according to your parameters and trading signals. A large community of coders and programmers offer their third-party expert advisor or EA software to MetaTrader users that generate forex signals or can be used for automated trading.
Customer Service/Educational Resources
For less experienced traders, these features could make a big difference to their profitability and progress as traders. Communication with a knowledgeable person and access to educational material on the forex market may be invaluable to the novice traders. In the event of unexpected market moves, errors and questionable trading situations, experienced traders will also rely on customer service to resolve issues fairly and efficiently.
Depending on how much money you open your account with, you may be entitled to narrower dealing spreads and other perks not available to lower net worth traders who can only afford lower deposits. Also, most brokers offer free demo accounts, which are ideal to assess a broker’s services with and to allow novices to practice trading.
Step 3: Open an Account and Start Trading
A large number of reputable online forex brokers accept clients from Thailand. Below you can find listed some of the top brokers that offer their services to Thai traders to help you find the best online brokerage for your needs. The last four even have their websites translated into the Thai language for extra convenience:
This is the largest U.S. based broker that accepts clients from Thailand. It has oversight from the U.S. CFTC and NFA, as well as from seven other jurisdictions worldwide. The broker offers three trading platforms, including MT 4/5, and it requires a minimum deposit of $250. FOREX.com’s leverage is quite low and offers only a 50:1 maximum leverage ratio on forex trades. The broker also offers a user-friendly interface, excellent customer support, and a wide range of research and tools.
This online forex broker is one of the few brokers with offices in Thailand and its site is translated into Thai. The broker offers four different account types and requires a minimum initial deposit of just $1 to open a Cent account.
FBS has oversight from CySEC, which conforms to the EU’s Markets in Financial Instruments Directive (MiFID). Maximum leverage is a whopping 3,000:1 on some accounts and commissions are $6 per lot traded on top of the dealer spreads. The broker lets clients use the MetaTrader 4 and 5 trading platforms.
Regulated by the ASIC in Australia and the FCA in the U.K., the broker offers two types of accounts. Its standard account requires a minimum deposit of $50 and its ActiveTrader account requires an initial deposit of $25,000.
Leverage for forex trades is 400:1 and CFD trades are 200:1 via FXCM Australia, but it has only a 30:1 ratio for FXCM U.K., so most traders who want to use leverage choose FXCM Australia. FXCM offers the MetaTrader 4 trading platform in addition to its proprietary award-winning Trading Station platform.
An award-winning no dealing desk (NDD) broker, FxPro has oversight from the UK FCA, Cyprus CySEC and the South African Financial Sector Conduct Authority (FSCA). The broker offers fixed and variable dealing spreads with a $9 round trip commission when you open and close a position. FxPro offers three different account types: MT 4, MT 5 and cTrader, which describe the trading platforms used. A minimum deposit of $100 is required to open any of the three account types and traders can leverage forex positions up to 500:1.
Regulated by the FCA, the ASIC and CySEC, this award-winning EU-based broker offers three different account types, as well as an interest-free Islamic account. The broker requires a minimum deposit of just $5 and charges commission of $3.50 per standard lot traded. XM offers the MT4 and MT5 trading platforms and has flexible leverage ratios of 1:1 to 500:1. The broker also provides free VPS hosting on accounts with a minimum balance of $5,000.
Trading forex in Thailand can be just as easy as in any other part of the world. Still, knowing your needs as a trader will facilitate the process of finding the best forex broker for your trading style, so make sure to assess your requirements before shopping for a broker.
Furthermore, acquiring knowledge of the forex market and conducting research through technical and fundamental analysis could save you a considerable amount of money and stress in the long run. Finally, a solid foundation of knowledge will give you the confidence needed to trade in this often-volatile market.