Forex Trading In Singapore

The trading of foreign currencies online is a leveraged product, which means that you are only required to deposit a small percentage of the full value of your account funds to place an Fx trade. This translates to the potential for profits or losses from an initial capital outlay being significantly higher than in traditional trading.

When an investor decides to invest in the Fx market, he or she must first open a currency trading account with a broker.  In Fx trading,  investors use leverage to profit from fluctuations in exchange rates between two different countries.  Leverage is basically a loan that is provided to a trader by the Fx broker who is handling an Fx account.  The leverage that is achievable in the Forex market is one of the highest obtainable by investors.

Usually, the amount of leverage provided is either 1:50, 1:100 or 1:200 or more, depending on the broker and the size of the position the investor is trading.  Standard trading is done on 100,000 units of currency, which is called “one lot.”  For a trade of this size, the leverage provided is usually 50:1 or 100:1.  Leveraging of 200:1 is usually used for positions of $50,000 or less. 

The leverage provided on a currency trade is 100:1.  In other words,  in order to trade $100,000 of currency with a 1% margin, a trader will only have to deposit $1000 into his or her margin account.  Leverage of this size is significantly larger than the 2:1 leverage commonly provided on equities and the 15:1 leverage provided by the futures market.

Although 100:1 leverage may seem extremely risky, the risk is significantly less when you consider that currency prices usually change by less than 1% during one day of trading. 

If currencies fluctuated as much as equities, online brokers would not be able to provide as much leverage.

All Forex trading is quoted in terms of one currency versus another.  Each currency pair has a “base” currency and a “counter” currency. The base currency is the one appearing on the left of the currency pair and the counter currency appears on the right. For example, in “EUR/USD,” the EUR is the “base” currency and the USD is the “counter” currency.

Currency price fluctuations are triggered by currencies either appreciating in value (strengthening) or depreciating in value (weakening). For example, If the price of EUR/USD fell, this would indicate that the counter currency (US dollar) was appreciating, while the base currency (Euros) was depreciating. 

When trading in Fx, you would buy a currency pair if you think that it will strengthen against the counter currency. Alternatively,  you would sell a currency pair if you thought the base currency was weakening in value against the counter currency and make profit.

The word “pip” is an acronym for “price interest point” or “point in percentage.”  A pip measures the amount of fluctuation in the exchange rate for a currency pair.  For currency pairs displayed with four decimal places, one pip is equal to 0.0001.  

Most currency pairs are quoted to five decimal points, with the change from the 4th decimal in price commonly being referred to as a “pip.”  For example, if the price of the EUR/USD currency pair moved from 1.33800 to 1.33920, it is said to have climbed by 12 pips (92-80=12).

Simply stated, a pip is what we in the Fx market consider a “point” for calculating profits and losses.

eToro is a reasonably novel but fast-growing brokerage firm with overhead 5,000,000 traders in over 140 Countries. Unlike the enormous mainstream of brokers. You can trade Cryptos, Currencies, Stocks and Commodities with this broker.

Plus500

Plus500 was established in 2008 as an online international trading platform that is popularly used in Asia, Europe and Australia and elsewhere in the world. In the United Kingdom (UK), the company operates under the name Plus500 UK Ltd and is regulated by the Financial Conduct Authority of the UK (FCA).

IG

IG Broker is also based in the UK and is a leading spread betting brokerage firm overseen and regulated by the Financial Conduct Authority (FCA), which oversees all brokerage firms and brokers in the UK.

FxPro

London based FxPro was founded in 2006 and is an online brokerage firm offering trading accounts for Stocks trading, Spread betting, foreign currency exchanges, as well as accounts for trading CFD’s.

Capital.com

Capital.com is a global online brokerage firm that offers trading services across various asset classes, including forex, commodities, indices, and cryptocurrencies. It’s located in Cyprus.

Pepperstone

Pepperstone broker is founded in Australia, Melbourne and has offices in USA, Dallas and China, Shanghai.

IC Markets

IC Markets is an Australian forex broker, The ICMarkets constitutes one of the biggest online retail foreign exchange brokers in Australia.

FP Markets

FP Markets (First Prudential Markets) is an Australian-based online broker founded in 2005. It is regulated by ASIC.

Forex.com

Forex.com UK was established in 1999 and is regulated by the UK’s Financial Conduct Authority (FCA).

Interactive Brokers

Interactive Brokers Group Inc is a true online ECN brokerage, You can trade bonds, stocks, Forex, optionsand futures in bulk orders with this broker. The broker headquarter is at Greenwich, Connecticut of United States.