Forex trading in Singapore is much different and better for most traders, especially those living in different parts of Asia. The reason is that Singapore relies a lot on finance and financial services industries and that is why it is a great place to be for all those who are part of this ecosystem. Of course, that does not mean that anyone is free to do anything as far as trading is concerned, it just means that everything related to trading and finance is highly developed and regulated as well. Singapore does not have much of natural resources and it relies on the finance industry for much of its revenue.
The country has realised that and that is why it has ensured that the laws are very well developed to ensure that trading and financial services can be carried out by individuals and other entities with no confusion over the laws. Many of the traders in various Asian countries prefer to have a presence or a base in this country precisely for this reason as the ecosystem is very highly developed and the laws and the regulations support the ecosystem to a great deal. And if you feel lost at any point of time, there are always a lot of finance professionals to help you through and so it is an ideal place, just like Hong Kong, for those who want to make a career out of finance.
How to Start Forex Trading in Singapore
It is easy to start trading forex in Singapore as the first thing that you need to do is to choose the right platform that you want to trade in. It may be a laptop or a desktop or a server or if you are not confident of trading yourself or you do not have the time for it, then you might choose to go for copy trading or you could buy an expert advisor and run it on a VPS. There are a variety of ways in which forex trading can be done and so you need to decide the right tools for it.
Once you have chosen that, the next thing to do is to choose the right software. There are many platforms out there for trading forex but the most used ones by the retail traders are the MT4 and the MT5 platforms. Of course, it is not necessary that you need to choose any of these 2 as nowadays, many brokers have developed their own trading platforms and they give it out to their traders for free. So, you need to choose the right platform that you are comfortable with and use it for trading. The best advice would be to try out a variety of platforms over a few weeks to find out their features and to see which one you are comfortable to trade with. Once you zero in on a specific platform, the next task for you would be to mfind out the brokers that offer these platforms for your trading. There are many FX brokers which the forex traders in Singapore use for their trading and some of the most prominent ones are Interactive Brokers, Pepperstone, Saxo Bank etc and you need to find the right broker for yourself.
Once you have chosen the right broker which suits all your needs, the next thing to do is to just go ahead and open an account with the broker. Make sure that you have read the vreiews about the broker and have done your due diligence. Also, since you are in Singapore, it is also preferable that you choose a broker who is regulated by the Monetary Authority of Singapore as that helps with the safety of your funds to a very large extent. The number and size of discounts and offers given by the broker might be very less and those non-regulated brokers may be giving much more but it is important that you don’t get greedy and stick to regulated brokers as much as possible. Opening of an account with the FX broker should be an easy process for Singapore forex traders as all that you need to do is fill out an online form with your details and submit your id and address proof and it is very likely that most brokers would approve your account within a day or two provided all your proofs and documents are fine and up to date.
Then you need to fund your account and each broker offers a variety of ways to deposit funds into your accounts. Some of the common deposit methods are wire transfers, bank to bank transfers, funding through cards and funding through crypto as well. It is a very easy and quick process for someone who is in Singapore and once you have made the deposit, then all that you have to do is to put in a test trade to make sure that everything is setup fine for you and the lot sizes, instrumebts, spreads and other details are as per your expectations. Once this test trade is done and all these details have been verified, then you are all set to begin your journey as a trader.
Is Forex Trading Legal in Singapore?
In Singapore, all the finance related activities, including trading, is controlled and regulated by the Monetary Authority of Singapore. Any person or firm that wants to carry out any financial activity has to get licensed from the MAS. They ensure that unscrupulous operators who are out there to cheat investors of their money are kept under check and any inflow and outflow is strictly monitored. Since the base of the Singapore economy is finance and finance related activities, it is indeed a tough job for them to watch over the entire ecosystem but still they manage to do that.
Forex trading is indeed legal in Singapore and there are many licensed entities through which the investors and the traders would be able to carry out such activity. It is important that the traders and investors have their activities only at the licensed entities as it ensures that their funds are safe, regulated and protected by the MAS and by doing this, they also ensure that they are in the right side of the laws. If the traders do choose to trade with an unlicensed entity then they are doing so at their own risk.
Some of the regulated brokers are Saxo Bank, Interactive Brokers, Plus500, City Index and IG. All of them are very well know and they offer different types of accounts suitable for different types of trading and with different leverages as well. They also have a wide variety of trading platforms for the traders to choose from and once the traders are able to make up their mind on which of the brokers they want to open an account with, they can go ahead and do the same and trade safe in the knowledge that what they are doing is pretty much legal and that would remove one of their major headaches as they need not worry about this while trading and can hence focus on their trading.
How Has Covid-19 Impacted the Forex Market in Singapore?
Covid-19 has not only impacted the forex market in Singapore but it has done so all around the world as well. Initially it led to a period of low volatility and low liquidity as the retail traders were not sure how the pandemic would be affecting the market in the short term. They also had the fear that the pandemic could continue for a long time and they could lose their regular jobs as a result and this fear kept them out of the market as they wanted to save as much money as they can for their long term future.
Once the pandemic began to recede in a slow and steady manner, the traders have also slowly returned to the market and many of them view trading as a way to augment their income and use this to secure their future, especially during the times of such pandemic. So, initially, we saw a dip in teading volumes across all brokers not only in Singapore but all around the world as well but over the last few months, things have started to look better. But still the volumes are not as good as the pre-pandemic times and they are only slightly better than what they were at the same period of time last year. So, it is clear that there is still a long way to go before the retail traders lose their fear and start returning back to FX trading in a strong manner.
Making Money with Forex in Singapore
Singapore is a costly place to live in and that is why may people continue to see how to trade forex in Singapore as they view FX trading as a way to augment their income and make their lives more comfortable in Singapore. Finance and finance-related business are the backbone of the conomy and so the knowledge about trading among the general population is much higher than in many regions of the world.
Also, stock trading is not too popular in Singapore as they are not many home grown companies within Singapore and so most of the trading takes place on shares and stocks that belong to companies that are in other parts of Asia or in the US. It is the financial hub of Asia and so the access for trading, whether it is stocks of FX, is very high for anyone in Singapore as compared to other regions and many financial professional have set up their base in this country specifically for this reason. Also, we have seen that FX trading is very famous within Singapore as the traders over there are generally very well aware of the FX market. Singapore is also a place, which traditionally has seen a lot of funds moving through the country and most of the wire transfers sent from Asia or to Asia pass through the banks in Singapore as it has been the hub of all financial transfers as well.
For all these varieties of reasons, many people in the country are aware of FX trading and they view it as an opportunity to make some extra money so that they can add to their income. That is why many of the regulated FX brokers continue to do good business in the region and the traders use their accounts to trade some money and ensure that they generate atleast something more than what the banks offer them in the form of interest. The traders are also generally happy to park their funds within the brokers and are on the constant look out for opportunities to trade as saving of these funds in banks do not give much returns and there are also not many other avenues where the investors can invest their idle funds. So, the trading ecosystem in Singapore is always a big hub of constant activity.
So, What are the Advantages of Forex Trading?
The advantages of forex trading are many and especially so, if you are in Singapore. Singapore forex traders have a distinct advantage as they are surrounded by an ecosystem that is thriving and hence full of knolwdge which the beginners can use and leverage upon for their own trading. One of the main advantages of FX market is the fact that it is open 24X5. None of the stock markets are open for so long which means that the stock trading for respective markets are open only during the respective countries’ timezeones making it very difficult for participants from other countries to trade those stocks. On the other hand, FX market is open 24X5 which means that anyone living in any part of the world would be able to treade FX irrespective of the timezone that he lives in as the FX market would be open for him all through his day.
This is an advantage that has helped the FX market grow over the past many decades. Another one of the big advantages as far as the FX market is concerned is the fact that it is prevalent everywhere in the world and the prices of each and every instrument cannot be controlled or manipulated by a single entity or group of entities or even a country for that matter. A country’s economy is reflected through the FX price of the respective currency and so it cannot be easily manipulated. On the other hand, as it has been proved time and again, any stock of any company in any part of the world can be controlled by a specific entity or group of entities as the size of such stocks and the markets are much smaller as compared to that of the FX market. This kind of manipulation increases the risk in these markets manifold and hence many of the traders tend to lose a lot of their funds and become heartbroken due to this kind of control. On the other hand, this is not possible in the FX market, atleast on a large scale and so many traders tend to prefer FX trading as compared to many other instruments or the stock markets for that matter. FX markets are traded by people all around the world and so it is much more easy to analyse and setup your trades and trade them according to your plan.
Conclusion:
Forex trading in Singapore is probably one of the most easiest and open things to do as far as regulations and dealing with the authoties is concerned. Singapore is the financial hub of Asia and so the laws and regulations surrounding FX trading are well developed. Also, these have been slowly developed and improved upon over a period of several decades and hence it has been well thought-out and the regulators have ensured that the playing field is as open and level as is possible.
Under such circumstances, it is easy for the traders to just focus on their trading and not worry about the laws and whether what they are doing is legal or not. As long as they stick to regulated brokers and are aware of what is right and what is wrong, they can trade with full freedom which is one of the main reasons why large FX traders from all parts of Asia want to fly in to Singapore and run their trading career from there while many financial and trading entities also setiup shop in Singapore to take advantage of the strong and well-reasoned regulations that can be seen in Singapore. Of course, there are lot of rules and regulations set up by the MAS with respect to starting FX trading within the country both for individuals and businesses but overall, despite all the laws, people and businesses in Asia continue to flock to Singapore for their trading career and business.
