It’s little wonder that the forex market remains so popular amongst aspiring traders and entrepreneurs alike, with this entity seeing in excess of $5.1 trillion traded globally every single day.
It should also come as no surprise that so many look to establish a forex trading business in Singapore, with the Asian trading session seeing particularly high levels of activity and enjoying a lucrative crossover with the European session when it begins at 8 am GMT.
In this post, we’ll consider this endeavor in further detail, while appraising the key considerations when launching your very own forex trading business overseas:
1. The Use of Leverage and Capital Management
One of the main appeals of forex trading to aspiring investors is that this discipline offers significant leverage when compared with stocks and commodities.
This refers to borrowing a fixed amount of money to open up desired trades and positions, with this capital usually provided by a viable forex broker.
Ultimately, this enables traders to control a huge sum of cash with a relatively small margin outlay, with margin-based leverage calculated by dividing the total transaction by the size of your required deposit.
Of course, leverage represents a double-edged sword, as you can also lose considerably more than your initial outlay. This requires you to manage your capital outlay carefully, and look to scale your investments in line with your knowledge base, experience, and profits.
2. Build Knowledge and Hone Your Strategy
Ultimately, knowledge is your single most important weapon when starting out as a forex trader, as this helps to inform your decisions and create a sense of determinism that enables you to understand the underlying rules that govern change in the marketplace.
With this in mind, studying the markets and building a broad base of theoretical knowledge is key, as it’s from here that you can develop viable strategies and seek to optimize your profitability in any given set of market conditions.
At the same time, we’d also recommend using a demo forex trading account, which can be accessed through any reputable broker for a period of months. This will provide you with access to a simulated real-time marketplace, in which you hone practical trading skills and test your strategies in a completely risk-free environment.
3. Choose the Right Broker in Singapore
Of course, there are numerous forex brokers available in the market, so it’s important to identify the criteria that distinguish the most reputable operators. Once you’ve found the right broker, then you can start forex trading in Singpore.
Firstly, you’ll need to ensure that any brokerage platform is fully licensed and regulated by the Monetary Authority of Singapore (MAS), as this is the region’s sole governmental agency responsible for the forex market.
Beyond this, it’s also important that you prioritize brokers that offer access to a wider range of markets and a comprehensive suite of analytical tools and news resources.
This enables you to diversify your portfolio successfully over time, while also helping you to make informed trading decisions that capitalize on market trends in real-time.