Forex Trading in Singapore – How to get started (2019)

forex trading in singapore

Forex trading in Singapore has become very very popular among the locals since Singapore is the main forex hub in the Central East Asia since many years.

In this article you will learn how to get started very fast!

What is forex currency trading?

FOREX stands for foreign exchange market which is decentralized. (Source:* Wikipedia.org)

On internet you can come across different names for forex like forex trading, currency trading or even currency market when you want to trade currencies. All these terms basically mean the same.

It is the name for speculative trading with the aim to make money on price changes of various currency pairs.

Forex trading works in the way that you buy one currency and sell another currency. The daily price increments of currency pairs are so small, that it would require high amounts of money to achieve reasonable earnings. This is the reason why leverage is being used almost every time in forex trading.

Forex trading is a so-called over-the-counter (OTC) market. That means that currencies are being traded without any central authority like exchange but instead etc. This means for you that you are trading forex through your broker.

Today, you can trade in currencies in a variety of markets. Just imagine that the best forex brokers in Singapore  these days offer  around 60 currency pairs for trading!

Main forex currency pairs:

  • EUR/USD – The Euro/Dollar Pair
  • USD/JPY – Dollar/Japanese Yen
  • GBP/USD – British Pound Sterling/US Dollar
  • USD/CHF – The US Dollar/Swiss Franc
  • AUD/USD – Australian Dollar/US Dollar
  • USD/CAD – The US Dollar/Canadian Dollar
  • NZD/USD – New Zealand Dollar/US Dollar

One specific of Singapore forex trading is that you might be interested to trade local currency:

  • USD/SGD – US Dollar/ Singapore Dollar
  • EURO/SGD – Euro / Singapore Dollar

We recommend that you trade through eToro as they have 47 different forex pairs which is more than enough!

Forex Trading takes place on trading platforms between two different currencies.

One of the most traded is EUR / USD. This means that you are trading euros against the US dollar. If this rate is 1.1267, then it means that for every euro you get $ 1,1267. If this rate goes up to 1.13, it means the euro has become relatively stronger relative to the US dollar. It is important to point out that this could be due to a strengthened euro, a weakening dollar or both.

There will be no forex trading without the opportunity to buy one currency against another. Otherwise, you would have to go down to the bank and buy dollars and keep them at home until you could exchange them for more. That would be inappropriate and because of the difference in the buying and selling prices it would not be realistic either.

Therefore, it is important to understand what affects currencies, especially in the relationship between two currencies. If you understand that, you can make good money on forex trading.

How to trade forex in Singapore

You must be on a trading platform that offers forex trading. Here I show you how to do it on eToro, so I would advise you to create an account with them so you can better follow the example.

When you get into your eToro account, you click on “Trading Markets” on the left hand side. At the top you click where it says “Currencies.”

In total, you will find more than 47 different currency combinations at eToro. The most traded are EURUSD, GBPUSD and USDJPY. But you have far more options than the one at eToro.

If you want to trade with EURUSD, just click on it. On the next page you can choose to go directly to the buy / sell page by clicking on “Trade” but you can also see statistics here and read what others say about EURUSD.

Image Source: Bloomberg Markets

Since we have already decided to buy, we go to the trading function.

** etoro buy/sell picture**

At eToro you have a number of options. At the top you can see that the market is closed today. The market is open all day Monday through Friday, so it is only closed on weekends.

In the picture you can see that we would like to buy for $ 10,000. Now we come to the gear section, because as you can see, it stands for the X30. This means that you have an exposure of 30 times more than you have. So 30 × 10,000 gives an exposure of $ 300,000.

Even if you choose X1, ie. without leverage, it is still a CFD trade because you do not own euros or US dollars. If you buy, the euro must be worth more money before you make money. If you believe that the US dollar will be worth more than the euro in the future, then you have to sell, because here you hope the exchange rate of EURUSD falls.

Forex Trading is simple because you do not actually own any currencies, so you only keep track of how many dollars you can get for a euro. Similarly, you can trade USD against the Swedish krona or something else entirely.

To understand how to make money on forex, it is important to understand how a currency is affected.

Forex market is open 5 days a week from Monday morning until Friday evening.

Singapore time zone is however different than London GMT time.

Therefore Singaporeans must align a little bit!

If you are in Singapore, it pretty much depends on the currency pairs you are trading!

In below table you can see that the most “volatility” is during the overlap of Sydney and Tokyo forex trading sessions (between 8AM – 2PM Singapore Time Zone) you can find peak times for JPY/SGD currency pairs and

During the overlap of Tokyo and London sessions that are good to trade for example EUR/JPY for example at 3PM – 5PM Singapore time.

However our tip is, if you can stay up late, the best time to trade forex in Singapore is during the peak forex hours meaning from 8PM until 12PM Singapore time, while this is the showtime time when London and New York overlaps and that’s the timing for the most popular currency pairs EUR/USD that moves up and down during this time.

singapore forex market hours

Well this is a tricky question!

Why is that you may ask ?

Because every trader has different expectations, trading style and goals.

In average the best retail Singapore forex traders make around 20%-30% gain per month.

What affects forex exchange rates?

On the surface, it seems relatively simple what affects an exchange rate. If the US economy is doing well, then the US dollar will go up. Here it is important to remember that forex trading is one currency against another. So, if the overall world economy goes up, then it is no longer enough to strengthen the US dollar against the euro, as both EU countries and the US can see growing growth.

Therefore, you often have to go down and find other items that can affect one currency relative to another. This is where you need to analyze an economy more closely and keep an eye on what national and central banks are saying.

Obviously, if the Fed, the US central bank, cut interest rates or up, then the ECB, the European Central Bank, would probably follow relatively quickly as we are living in a globalized economy today where countries are constantly trading with each other. But there will always be small changes that affect either the euro or the dollar as everyone is watching what is happening. Today, there are a number of measures, reports and figures that are kept in mind as they affect the economy and thus a currency.

If US unemployment figures show fewer unemployed in the last quarter, it would most likely strengthen the dollar against the euro. At least in the short term. This is because there is constantly shifting knowledge between figures from different economies, and it is here that you can make a lot of money as a day trader. If you understand how to use this knowledge correctly.

The good day trader starts to see patterns in exchange rates and can therefore make money every time something happens in a country. It can either be a policy decision or a change in interest rates. This is something that we have written more about in our currency converter .

At MAS Monetary Authority Singapore you can also read more about how monetary and exchange rate policy works. As a newcomer to forex trading, it is a good idea to have some understanding of this, as this will give you a better understanding of what affects exchange rates.

MAS Monetary Authority Singapore
MAS Monetary Authority of Singapore building

Find the right forex broker in Singapore

There are a number of forex brokers in Singapore that you can choose from today when it comes to forex trading. Basically all CFD-based trading platforms offer currency trading. If you use a well known known currency platform such as MetaTrader 4 or 5 or even cTrader, then you will have the cutting edge tools to trade technical indicators.

We recommend that you use eToro, however, you cannot use them with MetaTrader 4 or MetaTrader 5. However, if you are going to start currency trading, I would recommend that you start with eToro rather than MetaTrader.