Forextrading is currently considered a global affair. Daily, the market seesapproximately $6.6 trillion volume across different countries. With suchfigures and promises of financial security, it is only natural that more peopleacross the globe are trying to get into space. If you fall into this demographyof Singaporean investors looking to diversify into the forex market, thisarticle is for you. Here, you'll learn what it takes to trade forex in yourcountry and the legal bindings and regulations attached to this financialmarket.
Can You Trade Forex in Singapore?
Before wedive into the specifics of being a professional forex investor in Singapore,the first thing to consider is whether or not you're legally allowed to ventureinto currency trades in this region. The answer to this is quite direct. Forextrading is legal in Singapore, and anyone can trade the markets as long they gothrough an authorized and regulated broker.
TheMonetary Authority of Singapore (MAS), the country's central bank and financialregulatory authority, has strict rules protecting consumer rights in theforeign exchange market. These rules are targeted towards brokerage approvalsand ensure that service to providers in the currency market is regulated. Aslong as MAS regulates your brokerage platforms, all your transactions arelegal. MAS requirements for forex brokers are as follows:
● Brokersmust hold a Capital Markets Service (CMS) license.
● Brokersmust separate clients' funds from personal holdings.
● Thereshould be clear and constant reporting to MAS. This report will includefinancial statements, trading statistics, and complaints.
On theother hand, there are possibilities of exploring over-the-counter (OTC) forextrading alternatives. The downside to this is that MAS has issued warnings thatsuch trades might be at risk of investors losing their funds. At the same time,no instructions are issued against traders taking this route for theirtransactions.
Both OTCand brokerage systems can be used across several asset classes in the currencymarket, including CFD trading, stocks,commodities, and shares. While there is freedom to practice as an individual inthe currency exchange market, it might be different for institutions. Certainrestrictions apply to institutional trades,banks, and other financial institutions. One is that financial employees ofthese institutions must reveal their existing accounts to compliancedepartments for monitoring upon joining such companies.
How To Trade Forex in Singapore
As theuniversal market that it is, the process of buying and selling foreigncurrencies is the same across countries. The only significant distinction isthe different regulatory bodies to which participants answer. Here is how toget started as a forex trader in Singapore.
Find a MAS-Approved Brokerage Platform
Somebrokers have gone to the length of acquiring a MAS CMS license to operatelegally in Singapore. While hunting for brokers, this should be the first thingon your mind. You can check if your trading platform or service provider is fitto run operations by checking on the MAS official website.The trading platform is also a considerable part of an investor's overallexperience. Therefore, you should pay more attention to it. When choosing aplatform, look out for user-friendly interfaces, trading tools that would helpboost your successes, indicators, and advanced features for analysis. Lastly,the commission fees differ for different brokers. Be clear on the terms ofcommissions and transaction fees before proceeding.
Open Your Trading Account
Yourtrading account could be a live or demo account, depending on your level ofexpertise. It is advisable to start with a demo account and test the watersbefore diving fully into the market. Once you decide which to begin with, youcan fund your accounting using the broker's payment method. Your tradingplatform should be easy to navigate, even for a beginner. In most cases, yourbroker would offer guidance in these stages.
Trade on the Go
Trade andget better by constantly refining and reviewing your trading strategies. Onceyou've perfected your methods, you can always upscale and enter bigger markets.Also, look into diversifying your assets and trying CFDs. They are among thesafest alternatives for risk management and preventing losses.
Last Tips For Trading Forex in Singapore
TheSingapore stock and forex market is well known for its large audience, whichcould be a huge positive to investors regarding liquidity. This also has addedadvantages, like better stability and flexibility for traders. Some helpfultips for maximizing these opportunities are to set your stops and limits,monitor your position, and use leverage. The stop-loss is an automated order toclose or open your position when the market moves a few points for you oragainst you. Leverage is an approach to starting with less capital than usual.These tips are fundamentals of success in the market, and it'll do you a lot ofgood to get familiar with them.
