forex trading singapore

Forex Trading Singapore: Everything You’ll Need to Know Before You Hop In

Day trading has become significantly popular in the last few years, with forex being one. You’ve seen stories circling in the news about foreign exchange currency’s convenience as a highly-accessible and liquid market with potentially huge profits if you have an excellent trading strategy.

If you have enough capital, forex trading in Singapore only takes a few minutes to set up and get started. Here is a complete guide to everything about forex for beginners.

What is Forex Trading?

Foreign exchange trading is the buying and selling of a currency on the international market. These markets are usually open to investors that can provide cash, or readily available credit, to facilitate the purchase and sale of foreign exchange.

A currency’s price is determined by supply and demand. If a country is experiencing high inflation, its currency will be devalued and trigger a decrease in demand for that currency. Conversely, if a country has an expanding economy, there will be an increase. Taking advantage of economic movements makes FX trading a profitable venture.


Where Does Forex Trading’s Intrinsic Value Come From?

Going deeper into foreign exchange, the intrinsic value of a currency is the amount of goods and services that a country can theoretically produce. The value equals the number of goods and services that the country’s citizens can buy per currency unit. Read more on how to invest in stocks to invest in Singapore.

red green candlestick trade chart

Why Should You Trade Forex?

Several reasons make the forex market greatly attractive to investors.

A Market That’s Always Open

Economic movements change overnight because of ongoing news reports and worldwide events. Because a country’s economy determines the currency’s power, forex trade is always open 24 hours a day and seven days a week. However, some forex brokers may close their foreign exchange markets after office hours, so make sure to read their use guidelines.

Very Liquid Assets

Liquidity is the ability to buy or sell quickly without causing a significant price change. You can buy foreign currencies at any position, value, and time and have no conditions to fulfill except to provide the accurate currency sum to purchase a specific currency. The exchange of different currencies allows traders to make transactions without worrying about price fluctuations.

Easy Trading Entry

You only pay for the spread and commission fees with forex trading. Some brokers may charge commission fees, but even those aren’t as high as stock or asset trading during the open markets. You won’t be dealing with hidden and other extra charges, too.

Trade More With Less

Leveraging is the practice of borrowing funds to buy securities or other investments with the expectation that the investment will generate sufficient returns to repay the loan, plus interest, with a profit. This is a huge advantage for traders with only a small sum to trade but has a definite plan that guarantees huge returns on their profit.


Foreign exchange trading is the most accessible market for traders because it is open to all and does not require an advanced level of knowledge, unlike many other markets. If a trader can read a price chart and use technical analysis, they can trade in this market. In addition, the entry fees are much lighter compared to other public and private markets.

Is Forex Trading Risky?

wooden block with word risk

Trading forex is still a high-risk activity because you’re dealing with assets that have volatility. However, forex trading is much easier than stock trading because currency value exposure is much easier to understand than company and business exposure. Forex traders can easily learn to trade effectively with minimal risks within a day. Here are factors that affect forex trading.

Volatility Level

Volatility is a term used to describe the degree to which the price of a financial asset fluctuates over time. When investors talk about volatility in a market, they’re talking about the risk that prices may change or fall unexpectedly.

Forex market volatility is caused by many factors, including short-term movements in the economy and long-term changes in market structure. Economic conditions like agricultural and industrial production can trigger short-term fluctuations in the currency exchange rate, which are then reflected in price changes on trading platforms with a lag.

Leveraging Capability

Leverage can be dangerous in foreign exchange trading because the margin calls can wipe out your capital, and there is no insurance against this. Trading using leverage requires more capital than it takes to make the trade and a large amount of security to keep investors from being wiped out. It may give traders early access to enormous amounts to make big trades with a solid plan, but they will suffer enormous losses if the plan fails.

High Exposure

Foreign exchange is a market that deals in trading one country’s currency for another one based on supply and demand. The exchange rate for any two countries is set by the balance of supply and demand for each country’s currency, with the exchange rate fluctuating over time.

With this in mind, if a trader buys a foreign currency, they might not be able to sell it before it depreciates. If a trader sells a foreign currency, they could face losses that exceed the gains they made.

Requires a High-Risk Appetite and Effective Plan

Your risk appetite determines the trading amount, currencies you choose, and broker that you’ll use to trade in the foreign exchange. If you’re a conservative investor, forex trading may not yield huge returns, but you’ll likely receive guaranteed returns. 

Aggressive investors can fare exceptionally well in forex trading if they have an effective plan. Otherwise, they can instantly wipe out their capital with poor trading decisions.

How Can I Find The Best Forex Broker?

Singapore has numerous forex brokers available to jump-start your journey as retail traders in the foreign exchange markets. To make sure you choose the best one suitable for your trading style, use the following guidelines.

MAS Regulated

The Monetary Authority of Singapore (MAS) is a government agency. It is the primary financial regulatory body of Singapore. 

The MAS is responsible for monetary policy and currency issuance but not for controlling credit, interest rates, and other components of financial market activity.

The MAS also authorizes, licenses, and revokes the operations of online and offline foreign exchange trading brokers in Singapore. If you see MAS’ licensing on a broker, you can trust that they comply with all regulations, and you have recourse for any misgiving on your broker’s part.

Has Currency Pairs You Need

Your currency pair is denoted by the symbols and is one of the two tradeable values of a foreign exchange transaction, and the other is the exchange rate. Choose brokers that trade in currency pairs you need. For example, you may want to trade Yen for Euro, which means you’ll need to find a broker that provides you with these currency pairs.

Low Spreads and Commissions

Brokers with low spreads and commissions can be a great way to invest in the stock market. A broker offers no-commission trades on all stocks and lower commission rates. Some brokers also offer low spread rates, which means they can be a great way to buy or sell a stock for a minimal fee.

Brokers work as middlemen between orders and exchanges. However, this means that the person brokering the trade has to find a buyer and seller for your order. This can be time-consuming and difficult if they only receive low spreads and commissions.

High-Quality Customer Service

Forex brokers today are mostly functional online with their respective smartphone and desktop applications. However, these reliable platforms can shut down or function not as brokers intend. Thus it pays to have an excellent customer service department to hear your concerns, address them with prompt solutions, and ensure that everything works effectively on your end. 

Most brokers in Singapore dealing in forex have excellent customer service but read reviews about their customer service and overall platform experience from others to get a complete picture.

Effective Technical Analysis Tools

Technical analysis is the study of financial markets to predict future price movements. The type of market analysis typically used in this type of market is charting. 

Thus, a useful forex platform will always have top-notch technical analysis tools to help you identify past price patterns, indicators such as moving averages, and other market participants’ actions to predict the price of a security or market. Most brokers can include a technical analysis course after you sign up using their service too.

Easy Withdrawal and Deposit

Depositing cash on a newly-opened forex account should be seamless and unchallenging. Most trustworthy brokers partner with various banks and payment solutions to make deposits easy as you start your forex investment journey. 

On the other hand, brokers should also make it easy to withdraw money. Their partner banks must handle various amount ranges for hundreds of thousands of daily withdrawals. The MAS is strict with such guidelines to ensure that all withdrawing investors receive their cash on demand at any time.

Excellent Demo Account With Tutorials

A forex demo account enables traders to practice trading without risking any real money. It is a safe way of testing out your trading skills without risking an actual trading account. An excellent demo account for forex will allow you to test how the account would react to a certain market scenario and how your trade would perform. 

In doing so, you can accurately evaluate the technical tools, accessibility, stop loss and take profit automated tools, and more. In addition, you get a full tour and unhindered access to all its features without depositing cash.

How Do I Make The Best Foreign Exchange Trading Plan?

A forex trading plan is a plan of action that traders can use to help them manage their trading activity and maximize their profits. A forex trading plan can vary in detail, typically including the following.

Trade Frequency

Trade frequency refers to how often the trader plans to execute trades in a financial year, typically starting on 1st January and finishing on 31st December.

For example, you can be a 30-minute day trader who often checks for changes in the market within 30 minutes, uses technical analysis to analyze price changes in the previous minutes, and change your positions to maximize your profit. Variations of trading frequency can be hourly, daily, weekly, bi-monthly, short-term, or long-term.

Entry Signals

Entry signals are important before investing because they give the trader a good idea of what the market will be doing in the near future. If a trader wants to enter into the market, they should know where the market is likely to go to enter when the market is likely to be in their favor.

For example, you may have entered a position at $1.20 when the cross was at $1.40 and the signal was a buy. If you stick to that signal, you will keep your position at $1.20 until it reaches $1.60 and you make a profit of $0.40. After that point, if the price goes on an upswing, you will sell for a profit.

Exit Signals

All investments carry a certain risk, and some risks are more manageable than others. Exit signals are important before investing because they warn early potential profits and losses. 

Many investors tend to use exit signals as a way to measure their investment performance, as well as a way to help them decide when it is time to cut their losses. Exit signals can also help investors keep their portfolios balanced by eliminating the potential for over-investment.

Stop Loss and Take Profit

If you randomly buy or sell at a certain price, you will incur a loss or a profit due to the market’s volatility. Stop losses allow traders to set a level below which they will not sell an asset and above which they will not buy an asset. Taking profit allows traders to set a level above which they will sell an asset and below which they will buy an asset.

Trade Sizes

The risk of a trader losing money is directly related to the amount that he or she trades throughout their trading period. The trade size is simply the total amount that a trader opens a position with and is typically expressed in units of currency.

Large trade sizes can be advantageous to traders by allowing them to take more risks and potentially make larger profits. In contrast, smaller trade sizes may require a more conservative approach to account for the increased risk.

In Closing

Forex trading is a great and profitable venture for investors that fully understand their risk appetite, the best strategies to employ, and each country’s economic effects on every currency. Choose an excellent broker and start investing today!

  • Forex trading is one of the most liquid and low-cost way to start trading and gaining profit through trades.
  • Forex markets are open 24/7, allowing you to take advantage of small economic changes every day to take a huge profit.
  • You can choose from hundreds of brokers available nationwide. Just make sure that they’re MAS-regulated, has the currency pairs that you need, and offer high-quality customer service.

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