Forex Singapore Trading Account

If you are in Singapore and want to earn some money on the side, you may try and open an account with a forex Singapore broker. This however does not mean that you do not need any prior knowledge before you start trading. The fact is that the forex market is one of the most difficult markets to understand. It is also very popular because of the high potential of profit.

Opening an account with a forex Singapore broker will help in more than one way. For one, it will give you access to a demo account. A demo account with the forex Singapore broker will allow you to place virtual trades in the market at real-time currency rates without putting up any cash. The best way for an adult to learn is through participation. You can try your hand for as long as the broker allows you to. On expiry of the trial period you may be asked to deposit the minimum required amount in to your account.

Once there is money in your account the forex Singapore broker will probably not allow you to trade in the demo account. However, if you think you still do not have enough confidence, you can continue the learning process by creating small positions. You will see that your confidence increases with every profitable trade.

There will also be losing trades but that is part and parcel of trading in financial markets. A good forex Singapore broker will also provide the necessary resources that you may require for learning how to manage the risks associated with forex markets.

Forex Course for Beginners

The forex market is not only the largest but also the most complex of all markets. Most beginners find it difficult to internalise the basics and understand what makes the market move the way it moves. What adds to the complexity is that it is also one of the most fluctuating markets in the financial world. If you are a beginner, you could consider taking a forex course to understand these complexities and learn how to maximise your profit.

The reality is that the forex market is so large that despite its recent popularity there are no signs of reduction in its unpredictability and the associated risks. The fact that it is an over-the-counter market makes matters even worse for a beginner. Beginners get easily carried away by the enormous gains that they may make early in their trading career forgetting that there is a similar potential of loss. A forex course can prove to be of great help in knowing the factors that influence market movements.

A good forex course will also teach risk management strategies. Like other financial markets, there are risks in forex trading as well. There will be profitable as well as losing trades. Your success depends upon maximising the number of profitable trades and minimising losing trades. The forex course you choose should cover proven trading strategies that have 60-70% winning chances.

The best forex course is the one that teaches you by allowing you to participate. Participation in trading activities makes it easier for adults to develop the kind of emotionless mindset required for the success of a forex trading career.

What You Need To Be Aware Of While Choosing a Forex Broker

Just as it is in other businesses it is not uncommon to hear about forex broker scams. The fact of the matter is that even a well reputed forex broker can cheat you because there is no formal regulatory central agency the way there are stock exchanges for the stock market. This is also the reason why it is extremely crucial to know how you choose your forex broker and understand how s/he can cheat you.

One of the most common ways that a forex broker can cheat you is to provide you with fake rates of currency pairs. Keep in mind that brokers have access to better technology and can choose to show whatever price they want to. The fact is that every broker offers a different spread on currency pairs and this will always differ from the actual quotes in the interbank market. This gives brokers a chance to change rates whenever they want to. The best part is that they are on the right side of the law as they are covered by the terms and conditions of the contract you sign with them.

Fraudulent brokers can easily programme cheating schemes into their trading platforms. For example, they could fraudulently run your stop losses to make more money out of you. However, at the same time it must also be said to their credit that good brokers do not normally indulge in such fraudulent practices and do not change their spreads simply to cheat their clients.

To protect yourself from forex broker scams it is necessary that you check the rates offered by your broker with other sources, preferably with interbank rates.

Trading In Foreign Exchange Explained In Simple Terms

The ability to trade with margins is one of the reasons of the immense popularity of trading in foreign exchange. Margin trading or leverage means that a trader can take a large position with a small capital outlay, which increases the profit potential manifold. However, it works both ways as it increases the potential for loss as well.

Trade in foreign exchange is basically done in currency pairs. The quoted rate reflects the value of one currency as compared to the other in the pair. For example, if EUR/AUD is being quoted at 1.23, it means that one euro is equal to 1.23 Australian dollars. The base currency is always the one that is listed first in the pair. What is interesting in the foreign exchange market is that both bull and bear market are always present at any given pointy in time. This is because you are primarily betting on which currency will increase in value as compared to the other. If you are bullish on one, you are bearish on the other.

Traders in foreign exchange can take advantage no matter which way they think the market will move in future as they have the option of going long or short in a currency pair. The minimum movement in foreign exchange rates is known as a pip. In case of AUD against the US dollar this would be the fourth decimal place. Suppose AUD/USD is quoting at 1.70 and you were to buy 10,000 units. If the price moves up by 0.01, it would mean that you make a profit of $1.

Which is Better: Forex CFDs or Conventional Forex Trading

Ever since trading in foreign currencies was opened to the general public it has become increasingly popular with the investing community. Its popularity has also been instrumental in the introduction of trading in forex with CFDs.

With the introduction of forex CFDs, traders not only have another option they are also faced with a dilemma of choosing between the two. While there are many similarities between spot trading and CFD trading in forex, there are also differences that may influence your decision.

In forex, both spot trade and CFD trading offer an enormous amount of leverage. Leverage allows an investor to place trades of a much larger value than the amount deposited with the broker. While leverage increases the profit potential, it is a double edged sword that can cut both ways.

Another similarity is that both allow traders to make a profit regardless of whether the market is going up or down. Just as traders can buy or sell a currency pair, they can also buy and sell forex CFDs. In fact, CFDs can be bought or sold regardless of whether you are trading in shares, commodities, indices or forex.

However, one of the major differences is that most CFD dealers offer a guaranteed stop loss, a feature not available in spot trading. While a lot depends upon whether you are dealing with a market maker or have direct market access, availability of a guaranteed stop loss has a fair advantage over normal stop loss. Moreover, forex CFDs are more flexible in terms of size of your trades and are simpler; your profit or loss is simply the difference between the current value and the value on expiry of the contract.

CFD Trading Singapore: Disciplined Trading

Regardless of the financial product you are trading you need to work out a plan before placing your trades. No matter how simple and easy to execute a CFD trading Singapore plan is, it requires a fair amount of discipline. Trading without discipline is a sure invitation to trouble. Strict discipline, on the other hand can yield handsome profits.

Firstly, enter a CFD trading Singapore trade only after you are sure of the point at which you will exit and stick to it regardless of market behaviour. Indirectly, it means that you need to avoid greed and not be afraid to book a loss. Remember that you placed the trade after due diligence and you should stick to it. Unnecessary greed can have dire consequences and so can your refusal to book a loss. 

Secondly, never get lured by promises that CFD trading Singapore provides fast and easy profits. Markets tend to spring surprises and no matter how experienced you are, you can never be always correct. The most you can do in CFD trading Singapore is to identify a target enter and exit price. Your job is over. Keep your gambling instincts out of it. Whether you make a profit or loss depends upon how the market behaves. 

Thirdly, identify a handful of markets and watch them closely. After that, no matter what you hear or see about astronomical profit potential in other CFD trading Singapore markets, stick to the ones that you have been watching. Trade in a new market only after you have studied it for quite some time.

Basic CFD Trading Advice

While it cannot be denied that there is a huge profit potential in CFD trading, it is also correct that it requires you to hone your trading skills. The fact is that trading CFDs is simple but not easy. 

The first thing that you need to know is that there are the similarities as well as differences between CFD trading and trading in the cash market for the underlying asset. Some differences offer a distinct advantage over direct trading while others can result in huge losses if you do not take due care. It is thus extremely important that you first understand the fine details of CFD trading you open an account. 

It is your hard earned money that is at stake and it does not pay to trade on hunches. Create a position only after you have done your research properly. Trust only your own judgment and not anyone else’s.

The best CFD trading advice you will ever get is to keep emotions out and develop a good CFD trading system. You will feel more comfortable and relaxed if once you are able to adopt that mindset. A good trader has a set of rules or a programme before initiating trades. Create a position only if you are sure of the point at which you will close it. 

Markets have an uncanny habit of throwing surprises. You need to know how to place covering orders and protect yourself from sharp adverse movements. At the same time, a trader should always be adaptive and have the ability switch quickly from bullish to bearish trends.

Trading CFD Singapore: Is It Good Only For the Short Term

It is generally believed that CFDs are suitable only for those with a very short time horizons or day traders. One of the reasons given for that is that you pay interest if you carry the position overnight. The longer the period you keep the position open with the CFD Singapore broker the higher the interest amount. 

It is commonsense that if you want to hold a position for long you would rather buy in the cash market where you do not have to pay a regular maintenance charge. But there is another side to it also. If you are paying hard cash for the full investment amount, you are foregoing the interest that you would otherwise get if the money were to remain in a bank deposit. You need to view the interest that you pay to CFD Singapore the same way. It is just like the way a landlord makes it worthwhile by figuring in the expense of constant maintenance of rental property into his profit calculation. 

It should be kept in mind that the CFD Singapore will typically charge an interest rate that is roughly two to three points above the base rate. However, if you go short in a contract with the CFD Singapore, you are paid an interest rate that is 2-3 points lower than the base rate.

The second point to be made in favour is that CFD Singapore is a leveraged product. If have done your research properly and your instinct proves correct, you stand to get a handsome profit on the full value of the contract with an initial outlay of 10% of the contract value.

Trade in CFD Forex

If at any given point of time you have ever shown an interest in trading, there is a strong possibility that you have got e-mails from CFD forex brokers. Most traders are fascinated by the fact that the forex market is highly liquid and open all through the day. Both these factors are extremely attractive to online traders who can only log in after office hours. 

Another reason why traders find CFD forex trading attractive is the reason that it allows them to buy or sell without actually owning the currencies they trade in. They can go long (buy) or short (sell) and take advantage of all price movements regardless of whether prices of currency pairs are moving up or down. 

When you trade on a CFD forex platform, you need to be clear of the situation. The base price is the price at which you buy a currency pair, which is available in convenient lots or sizes. Like other CFDS, a forex CFD is also a leveraged product that is traded on margins, which means that you can create a position by paying just a fraction of the total value of the contract size. A typical CFD forex trade can be secured by paying just 1% of the contract value; the rest is a margin loan. 

A typical CFD forex broker will offer a very tight spread, the difference between the buy and sell price, which is also the only charge that you need to pay for trading in forex CFDs. Leveraged trading allows exceptional profit potential with a small initial outlay but you need to be aware that adverse movements can wipe off the entire margin and land you in trouble.

CFD Pricing

CFD refers to contract for difference, a system of trading without actual physical ownership. The parties to the contract agree to exchange the difference between the current value of the contract and its value on its expiry. The asset may be a share, commodity, currency or index. The seller pays the difference to the buyer if the difference is positive. On the other hand, if the difference is negative, the buyer stands to lose money.

It is a derivative product that allows traders to speculate on price movements without having to own the underlying asset. It is a leveraged product, which means that traders have to put up only a small margin amount of the total value of the contract. 

A CFD provider works on the same lines as a traditional broker who acts on behalf of an account holder. Providers do not carry any risk and hedge their positions in relation to their clients in the cash market. For example, if a client were to buy 10,000 CFDs of EUR/AUD, it means that the CFD provider has created a short position in the currency pair. He will simultaneously create a long position in the cash market to hedge the risk.

Since the CFD provider is hedging his bets, he is in a position to pass on any price movement to the client. This allows the CFD provider to offer the best cash market price. Transparent pricing that tracks the price movement of cash market without delay assures traders that there is no conflict of interest despite the fact that they and the provider are counterparties in the contract.