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:
- 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 broker and trading platform.
- Choose your 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.
- Connect your broker to your bank. Your 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.
- Fund your broker account. Be sure to choose a broker that allows timely withdrawals of your funds. Check the online reviews of the broker before funding your account.
- Choose a trading platform. You can choose a 3rd-party trading platform and work with your broker or use the user interface that your broker controls.
- Invest. 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:
100 of your selected base currency
1 Minute Review
FOREX.com is a one-stop-shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker. You can’t invest in the stock or bond market through your FOREX.com and you cannot open an account with tax advantages. The confusing pricing and margin structures may also be overwhelming for new forex traders.
- MetaTrader 4 users
- Beginner forex traders
- Active forex traders
- Impressive, easy-to-navigate platform
- Wide range of education and research tools
- Access to over 80 currencies to buy and sell
- Leverage available up to 50:1
- Cannot buy and sell other securities (like stocks and bonds)
- Confusing margin requirements that vary by currency
- Limited customer support options
- Cannot open an IRA or other retirement account
1 Minute Review
Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).
eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.
- International Forex/CFD Traders
- New cryptocurrency traders looking for an easy-to-use platform
- Traders who want to buy and sell cryptocurrencies on-the-go
- Simple platform that is easy to master
- CopyTrader feature that allows new traders to copy the same strategies used by professionals
- Virtual dummy account that gives you $100,000 to practice trades
- U.S. traders currently limited to cryptocurrencies
- Only 15 major coins available to trade
1 Minute Review
A fully regulated broker with a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan, Avatrade deals with mainly forex and CFDs on stocks, commodities, indexes, forex, cryptocurrencies, etc. This brokerage is headquartered in Dublin, Ireland and began offering its services in 2006. It offers multiple trading platforms and earns mainly through spreads.
- Advanced traders
- Traders looking for a well-diversified portfolio
- Controlled by regulatory agencies of multiple countries
- Choice offered in terms of trading platforms
- Support available in 14 languages and trading platforms in 20 languages
- Practice/demo account available for trying out
- Breadth of trading assets
- Does not accept customers from the U.S. as it isn’t regulated in the U.S.
- Transferring funds to the account may take up to five days; withdrawals could take up to 10 days
$0.02 per share
1 Minute Review
Pepperstone is an Australian broker focused on providing international forex, CFD and cryptocurrency trading. Though U.S. traders currently cannot open an account with Pepperstone, the broker remains an affordable and comprehensive option for international traders.
Pepperstone offers traders access to over 61 forex markets, over 60 CFDs for index funds and stocks and 5 cryptocurrencies. Leverage options with Pepperstone are extensive; you may qualify for up to 500:1 leverage when trading currencies and up to 5:1 leverage when trading cryptocurrencies, for example.
There are a few areas where Pepperstone can afford to improve. We’d love to see Pepperstone add its own trading platform in the future instead of relying entirely on 3rd-party platforms. We’d also love to see direct stock and fund purchase options in the future. Despite these flaws, Pepperstone remains a very strong choice for international traders.
- International traders interested in trading CFDs from foreign markets and currencies
- Traders who are already familiar with the MetaTrader or cTrader platforms
- Traders who are looking for leverage when trading cryptocurrencies
- Access to over 61 forex pairs and over 60 stock CFDs
- Leverage available for both forex and cryptocurrency trading
- Wide range of educational tools and courses that both beginners and experts can use
- 24/7 customer service
- Not currently available to U.S. traders
- No option to purchase stocks, bonds or mutual funds directly; only CFDs are available
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
Playing Its Part
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.
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