Forex trading is fast growing in Singapore, and you can even access several simple strategies that you can use for it today. Many of such strategies are also profitable. Even if you are a beginner, you can use any strategies and start making money from Forex trading.
If you are new to the Forex trading world and are looking for how to get started profitably, you have come to the right source of information. In this write-up, we will show you some of the many things to consider so that you can become a professional Forex trader. This guide will show you all the basics of Forex trading Singapore, including helpful trading tips, legal matters, and taxes.
Best Forex Brokers Singapore
What is Forex trading?
Forex trading is the acronym for foreign exchange trading. You can also call it currency trading. The amount you can earn from Forex trading depends on the particular exchange rate of the currency pair.
When you trade Forex in CFD, you will not have to own the particular currency you want to trade before making money from it. Forex CFD trading equally enables you to make money both when the currency pair’s price is rising and falling.
The Forex market is open 24 hours and five days a week; it only closes on weekends. So, traders can have ample opportunities to make money from Forex trading in Singapore. Forex trading records ample liquidity, creating opportunities for traders to make a profit. However, the dynamism of the market makes it a risky place to make money.
Forex trading legality in Singapore
Forex trading is legal in Singapore. So, you will not be breaking any law when you trade Forex in this country. The country’s government does not restrict Forex trading in any way at all. To protect the interest of Forex traders, the government sees to it that it regulates Forex trading.
You need to open an account with a Forex broker to start as a Forex trader in Singapore. There are so many brokers out there today. Make sure you properly investigate these brokers before choosing any of them. When choosing a broker, go for one that holds an operating license in Singapore.
The agency that regulates Forex trading Singapore is the Monetary Authority Singapore (MAS). Check if the Forex broker has an operating license from this body before you register there to trade Forex. You stand the chance of losing your money if you register on an unreliable Forex broker for Forex trading.
Startup capital for Forex trading
You do not need a lot of money to start trading Forex in this country. Granted that some gambling sites demand a lot of money as a minimum deposit, others do not do that. You can even start with as little as $10.
While such a little amount of money can help to reduce the risk of trading Forex for a beginner in Singapore, it may also be dangerous for you. You will need to use a very small margin to avoid losing the money in the account faster than your imagination. The margin represents the difference between the assets of the purchased value and the amount you borrow.
As a beginner in Forex trading, you must always reduce your risk as much as possible. Start with the minimum amount allowed by the Forex trading platform and then build your account balance gradually. You must not put in more money until you have gained adequate knowledge and experience about Forex trading.
Step by step guide to trading Forex in Singapore
If you are a beginner, you may not find it easy to understand how to trade Forex, but the steps provided below can guide you to get it right.
Choose a Forex broker
Forex trading starts with the choice of a Forex broker. There are so many Forex brokers available to traders in Singapore, but, unfortunately, one cannot trust all of them for top-quality services. So, make sure you investigate each of them properly before pitching your tent to them.
Steer clear of non-reputable Forex brokers. You can determine the reputability of the broker by reading online reviews about it. Only read the reviews on neutral sites so that you can get unbiased details about the Forex brokers.
Check if the Forex broker has an operating license from the Monetary Authority of Singapore (MAS) before registering there. If you prefer foreign brokers, find out if they accept Singapore Forex traders. For example, some Forex brokers from Canada can accept international traders.
When choosing a Forex broker in the country, one other important consideration is to check the commission. The commission is the amount of money charged by the Forex broker for providing you with the trading services. The commissions differ from one broker to another. Go for brokers with minimal commissions so that the amount you pay as a commission does not eat too deeply into your profit.
Check if that broker offers educational tools and materials that can help the trader learn about Forex trading and make a profit. If you are a beginner in Forex trading, you need a broker offering many educational materials. Some brokers operate in secrecy. Such brokers are not the best for you. A good broker should have a large knowledge base enabling traders to learn more about Forex trading hassle-free to grow over time as Forex investors.
Demo trading is a must
If you desire to make money from Forex trading Singapore, you must always begin with a demo account. Demo trading helps you experience what the Forex market has to offer without risking anything. The demo account comes with virtual money, which you can trade.
Thankfully, most Forex brokers that accept Singapore players also give them free access to demo accounts. So, you can start practicing how to trade Forex at no cost. The demo account will help you learn the rope and get familiar with how Forex trading platforms work.
A demo account enables you to make many mistakes while learning how to trade Forex without losing money. It will help you explore the world of Forex trading in Singapore for free. It would help if you were not in a hurry to start making real money. Rather, you should take your time to learn as much as possible about the Forex market before going live.
Choose a good strategy
There are so many interesting Forex trading strategies today for those who aspire to make a lot of money from Forex trading. You can decide to build a strategy from scratch or opt for one of the already existing strategies. The second option can help you to save a lot of time.
Not all Forex trading strategies can work for you. So, it would be best to choose the strategy to use carefully. The type of trader you are can determine the best type of strategy to use. Your trading goals can also play a role in deciding the best Forex trading strategy.
Before choosing any of the available Forex trading strategies, first, find out how much money you can spare for trading. Some strategies require that you have a lot of money in your trading account, while some other trading strategies can work with a small account balance.
Many beginners mistake seeing Forex trading Singapore as a get-rich-quick strategy. Such traders end up making the wrong choices of strategies and will get their fingers burnt as a result.
When investing in Forex trading, you should see things from the long-term investment perspective. This should also determine the trading strategy you use. This does not mean you cannot find Forex trading strategies for short-term profit, only that the long-term strategies are sustainable for a longer period.
The points given below can help you to choose the right Forex trading strategy:
- Check if the strategy is easy to use and if it will not clash with your daily schedules. Also, check the level of experience required to use the strategy. As a beginner, you need a strategy that will not be difficult to understand.
- Before you go live with a Forex trading strategy, practice it first on a demo account, which will help you determine its profitability. Demo trading with a Forex trading strategy will also enable you to understand better if it will work for you or not.
- You should avoid any form of get-rich-quick tactics when choosing a Forex trading strategy. This will almost always lead to a regular loss.
- Gain confidence with the strategy first before you go live with it. If not, you will end up losing your money.
Good examples of Forex trading strategies you can use are:
- Swing trading
- News trading
- Technical analysis
Each of the strategies above has its strengths and weaknesses. Whatever you do, never trade with real money until you have mastered your preferred Forex trading strategy. Some experts suggest practicing a Forex trading strategy for a couple of months before trading with real money.
The Forex market is highly dynamic, and you must continue learning if you want to make money regularly. The frequency of losses reduces with the amount of knowledge you acquire about Forex trading Singapore.
Consider making passive income
The Forex market is highly dynamic. So, a beginner may not find it easy to build a working strategy. You may have to spend months before being able to stand on your feet and start making money from Forex trading. In the meantime, you can look for another way to generate income from the Forex market pending the time you will develop a working strategy.
Two possible sources of passive income you can consider in Forex trading are:
- Copy-trading
- PAMM account
Copy-trading enables you to copy the strategies of other Forex traders in real-time. However, your profit or loss depends on the profit or loss made by those other traders.
PAMM stands for Percentage Allocation Money Management. It is a form of account management strategy in which many people contribute money into a trading account for someone else to manage. The account manager is usually a professional Forex trader, and all the contributors will share the profit from the trading account. You can easily benefit from copy trading or PAMM account management in Singapore.
The profit you get from the PAMM account depends on your contribution to the account. You can use either of the methods above to build your Forex trading account and learn how to trade on the side.
Frequently Asked Questions
Will I pay tax on the money I earn from Forex trading in Singapore?
No, you will not pay tax. Every dime you earn from Forex trading is tax-free. However, you will have to pay tax when you quit your job and focus on Forex trading full-time. Most incomes from overseas coming into Singapore bank accounts are not subjected to taxation.
How much can I make from Forex trading?
There is no specific answer to that question. The amount you can earn depends on the type and profitability of your strategy. It also depends on your level of knowledge and experience in Forex trading.
Can I be scammed when I trade Forex?
The Forex market in Singapore is regulated. The chance of being scammed is slim. However, you can suffer scams if you register with an unregulated Forex broker.
How risky is Forex trading?
The authorities may regulate the Forex market in Singapore, but it is still risky. You can make and lose money from Forex trading. One of the best ways to reduce your loss is to gain adequate knowledge about Forex trading.
Can I register with foreign Forex brokers in Singapore?
Yes, you can. However, find out if that Forex broker is regulated or not. The Monetary Authority of Singapore regulates local Forex brokers. Check if the authorities regulate the foreign Forex brokers in their respective countries before registering with them.
How soon can I start making money from Forex trading?
No one can say specifically. It depends on how soon you develop a working Forex trading strategy and start applying it.