Finding investment opportunities in a volatile market

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Amid trade tensions between the United States and China, and issues such as Brexit and global geopolitical unrest, investor confidence in the market has been steadily waning. Recently in the Philippines, cautious and negative sentiments among investors have caused the benchmark Philippine Stock Exchange index to fall below the 7,500-point barrier.

In spite of this — or even perhaps because of it — there has been marked increase in interest regarding alternative investment asset classes. Foreign exchange, for instance, has been gaining popularity among Filipino investors who are unhappy with the current market and have been moving away from the traditional established financial assets.

Simon Stephen, Managing Partner of Australian multi-asset brokerage firm Charterprime, told BusinessWorld that the main thing holding traditional Filipino investors back from foreign exchange trading is the lack of education to start.

“I believe the biggest challenge facing the Philippine market now is a lack of education to people starting out in trading. The Philippines’ FX education community, for the most part – has done a fantastic job on educating traders – but more is still needed,” he said, adding that people who don’t have a basic understanding of foreign exchange are often unable to make educated decisions about selecting brokers or third party strategies.

“From trade wars to Brexit – these events always cause volatility in financial markets. Foreign exchange is no different – but given the nature of foreign exchange derivatives and the ability to trade on the value of currencies going up or down – we continue to see increased volume and interest from traders looking to speculate on these events,” Mr. Stephen said.

Without sufficient education, or the necessary trading experience to back it up, many traders who are new to the art of foreign exchange trading are susceptible to manipulation.

“It’s not uncommon to see trading offers with pricing and spreads that are “too good to be true” – and they usually are, in these scenarios, it may seem like you are getting a better deal on basic costs or outlandishly high leverage, but the quality of the trading environment is often quite poor. An example of this would be seeing a currency like EURUSD advertised at 1.11570 on the terminal, but come time to execute the trade, it is filled at 1.11500. The trader has received execution 70 points away from where they attempted to trade and is now much worse off,” Mr. Stephen said.

“This practice is unfortunately quite common by brokers targeting traders with low to intermediate trading skills. Charterprime categorically condemns this practice. We believe it’s one of the key differences between ourselves and other brokers in the region. Our focus is always on improving the trading experience for our clients.”

Charterprime, as a multi-asset derivatives brokerage, aims to offer trading platforms suited to both institutional and retail investors. Built from a pool of professionals with real industry experience, the platform is comprised of a team of industry experts from all over the globe with a diverse range of specialties.

“Execution and trading experience are our core strengths. We’ve taken our team’s experience in institutional trading environments and used it to open accessibility to high grade trading solutions,” Mr. Stephen said.

“Most retail traders use familiar trading platforms like MetaTrader 4 or 5 to execute trades, but this is just an interface for traders. The real differentiating factor for brokers is usually the software and trading lines behind the scenes of platforms like MetaTrader,” he added.

Charterprime, he said, has heavily invested in ensuring that the actual execution of client trades are good as possible; simply put – getting the end client the best price and fill rates as close as possible to the advertised price they are seeing on their trading platform.

As the Philippines maintains its excellent position in the global economy, there is much opportunity that lie ahead investors willing to take the time and learn the necessary skills. Mr. Stephen noted that those investors who stick to fundamental risk management practices and strategies are the ones who can turn a volatile, unpredictable market to their advantage.

“Take-profits and stop-losses can make or break a trading strategy and it’s important to remember and use these features. As always – I would also encourage new traders to do some extra due diligence on the providers they are using – it’s easy to check that brokers hold regulation they claim. There are also many third-party systems that can be used to verify trading strategies too,” he said.

“The Philippines is in excellent position to establish effective regulation and see a new financial sector emerge. There is a huge demand for derivatives in the Philippine retail sector and we believe this will only grow,” he added.

Charterprime is an award-winning multi-asset derivatives brokerage offering trading platforms to both institutional and retail investors. Built from a pool of professionals with real industry experience, our team comprises of a multitude of industry experts from all over the globe with a diverse range of specialties; and together our global team collaborates in tight synchronicity to make Charterprime a world-leading broker. For more information, visit