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Forex Trading in Singapore: Best Brokers, Strategies & Tips

FOREX Trading Singapore

Forex trading involves exchanging currencies, such as selling Euros to buy US dollars, and is foundational for engaging in the global FX market. 

This global FX market, operating 24/5, has grown to a staggering USD 7.5 trillion in 2022, highlighting Singapore’s status as a central financial hub in Asia.

This article discusses the top Forex trading platforms in Singapore, delving into effective strategies and essential trading knowledge. It emphasizes the substantial profit potential that these platforms offer to traders in the dynamic FX market.

What is Forex Trading

Forex trading, also known as foreign exchange trading, involves the exchange of currencies on a global market. It operates 24 hours a day, enabling trade across various time zones. This continuous operation makes it distinct from stock markets, which have set hours. 

Forex markets are highly fluid, allowing currency values to fluctuate frequently and rapidly due to various factors, including economic indicators, market sentiment, and global events.

How Forex Trading Works

Forex trading works by allowing participants to buy and sell currencies in pairs on an open market. Here’s a breakdown of the key components and how they interact within the forex market:

Currency Pairs

Every transaction in the forex market involves the simultaneous buying of one currency and the selling of another. These are grouped into pairs, like EUR/USD or USD/JPY.

The base currency is the first currency listed (EUR in EUR/USD), and the quote currency is the second (USD in EUR/USD).

The price of a forex pair is how much one unit of the base currency is worth in the quote currency. 

For example, if EUR/USD is 1.20, it means 1 Euro is equivalent to 1.20 US dollars.

Market Participants

  • Central Banks: Influence forex rates through monetary policy, currency intervention, and economic management.
  • Banks and Financial Institutions: Facilitate the bulk of currency volume transactions for clients and also trade on their own behalf.
  • Corporations: Participate in forex primarily for business and trade necessities, such as paying for goods in another currency.
  • Retail Traders and Investors: Speculate on the direction of currencies and seek to earn profits.

Market Structure

  • Spot Market: Deals with transactions at current market prices.
  • Forward Market: Agreements to buy or sell a set amount of a currency at a specified price on a future date.
  • Futures Market: Similar to forwards but standardized and traded on an exchange.
  • Options and Swaps: More complex instruments that allow further strategies to be employed.

Trading Process

  • Opening a Position: Traders select a currency pair, decide the size of the trade, and whether to buy or sell.
  • Executing a Trade: Orders can be executed through brokers or trading platforms that facilitate access to the forex market.
  • Monitoring and Closing: Traders monitor their positions and market conditions, closing their trade to realize a profit or cut a loss.

Factors Influencing Exchange Rates

  • Economic Indicators: GDP growth rates, employment levels, retail sales, inflation, and others.
  • Political Stability: Elections, policy changes, and international relations can affect currency stability.
  • Market Sentiment: Traders’ perceptions and future expectations can drive market trends.

How to Choose a Forex Broker in Singapore

Choosing the right forex broker in Singapore involves careful consideration of several factors to ensure the broker meets your investment needs and adheres to regulatory standards. Here’s how you can approach selecting a forex broker:

  • Licensing and Regulation: Ensure the broker has a capital markets services licence granted by the Monetary Authority of Singapore (MAS). A MAS-licensed broker meets strict regulatory requirements, providing a layer of security and professional standards.
  • Trading Platforms and Tools: Opt for a platform that is intuitive and easy to navigate. This can enhance your trading experience, especially if you are a beginner. 
  • Look for platforms that offer comprehensive charting tools, a variety of order types, and accessible technical indicators that cater to both new and experienced traders.The availability of market analysis, research tools, and educational resources is crucial. 
  • These help you make informed decisions by understanding and analyzing market dynamics.
  • Costs and Fees: Compare the costs associated with trading. Look for brokers that offer tight spreads between the buy and sell prices to minimize your cost on each trade.
  • Be aware of any potential account maintenance fees, deposit and withdrawal fees, inactivity fees, and the minimum deposit required. These can significantly affect your overall trading costs.
  • Customer Support: Ensure the broker offers robust customer service, ideally available 24/7, to support trading across global time zones. Check if the broker provides multiple communication channels such as a hotline, email, and live chat. The quality of customer service can be pivotal, especially in resolving trade disputes and technical issues.
  • Reputation and Reviews: Spend some time reading reviews and testimonials from other users. Insights from other traders can provide real-world information on the reliability and quality of the broker’s services.
  • Technology and Innovation: Given Singapore’s emphasis on FinTech, consider brokers that integrate the latest technologies, including mobile trading. This not only provides convenience but also ensures you stay connected to the market on the go.
  • Demo Accounts: Before committing, try out the broker’s services through a demo account. This allows you to get a feel for the trading platform and its features without risking real money.
  • Compliance and Safety: Lastly, verify the broker’s compliance with international and local regulations to ensure the safety of your investments.

Top 5 Best Forex Brokers in Singapore

BrokerPlatformMinimum DepositCommission FeeMinimum Spread
CMC MarketsNext generation platform or MetaTrader4S$2000 commission for most trade types; variable feesVariable or fixed
IGProprietary platformS$250Zero commission for CFDs; variable feesFixed and variable
OandaUser-friendly platformsS$0Zero commission for most types of trades; variable feesTight variable
Saxo BankSaxoTraderGoS$200Commissions on raw spreads; variable feesRaw spreads
Interactive BrokersTrader Workstation (TWS)S$0Depends on trading volumes, lower for high turnover with its forex trading accountS$0.01 pips for major currency pairs, such as EUR/USD, USD.JPY

CMC Markets is ideal for beginners with user-friendly platforms and extensive resources. IG is tailored for forex beginners, featuring an intuitive platform. Oanda suits cost-conscious and day traders with its zero deposit requirement. Saxo Bank caters to experienced traders with advanced tools and research. Interactive Brokers is suitable for active, experienced, and cost-conscious traders.

CMC Markets logo

1. CMC Markets – Best For Beginners and Intermediate Traders

Established in 2006, CMC Markets is a Singapore-registered broker specializing in over-the-counter derivatives contracts and leveraged foreign exchange trading services. It has 16 years of experience offering contracts of differences(CFDs) services in Singapore.

Best Features

  • Platforms: User-friendly Next generation platform or MetaTrader4.
  • Multiple account types: Standard, Premium, and Corporate.
  • Resources: Education resources, market analysis, or research tools.

Review: 2.8 stars out of 5 from 35 reviews

“The team at CMC have been awesome – excellent customer service and really good UX overall.” – Ms. Lucy Barraclough

IG Markets logo

2. IG – Best for Forex Trade Beginners

IG Markets, established in the UK in 1974, offers professional online trading services, such as forex trading, contracts for differences(CFDs), and stockbroking. IG’s platforms cater to various investors ranging from beginners to professionals. The user-friendly platform of IG, which guides traders toward fluent experiences, is particularly appealing to beginner investors.

Best Features

  • Platform: A user-friendly proprietary platform for beginners with charts, monitor tools, and order types.
  • Account options: Standard and CFD Accounts for different trading styles or risks.
  • Spreads: fixed and variable.

Review: 2.8 stars out of 5 from 62 reviews

“IG has a very good user interface and their customer service is really one of the best. Their response time is fast and efficient. They are really a honest broker.” – Mr. Prakash Ramasamy

Oanda logo

3. Oanda – Best for Cost-Conscious Traders, Beginners, and Day Traders

About

Established in the US in 1996, Oanda focuses on contracts for differences(CFDs) in forex, stocks, and indexes. The broker also emphasizes pricing transparency and education resources for traders, making it a leading forex broker in Singapore.

Best Features

  • Spreads: Focused on tight variable currency pairs.
  • Multiple account types: Standard, Premium, and Corporate.
  • Charting tools: basic and functional charting tools for technical analysis and user-friendly platforms for ease of use.

Review: 3.5 stars out of 5 from 51 reviews

“Very good experience and learning a lots with their training platform that they provided…Thank you OANDA this platform can help in my passive income.” – Mr. JasGmail

SAXO logo

4. Saxo Bank – Best for Experienced, Active & Research-Oriented Traders

Headquartered in Denmark in 1992 and registered as Saxo Capital Markets Pte Ltd. with the Monetary Authority of Singapore in 2006, Saxo Bank offers various investing services, such as Forex, CFDs, and stocks, providing investors with all-round experiences.

Best Features

  • Advanced charting tools: Advanced technical indicators, charting tools, and order types.
  • Account types: Standard and Premium.
  • Multilingual platform: Multi-languages are available on SaxoTraderGo, offering raw spreads to high-volume traders.

Review: 3.8 stars of 406

“I do recommend you look into this platform, for your daily investments, or long term savings plans.” – Mr. Michael Motet Hansen

Interactive Brokers logo

5. Interactive Brokers – Best for Active, Experienced & Cost-Conscious Traders

Founded in the US in 1978, Interactive Brokers(IBKR), a listed company on the NYSE, has offered investing services worldwide since then. The broker, registered in Singapore, provides clients with multi-investing services, such as forex trading, CFDs, stocks, and bonds. Its abundant trading experience, combined with the latest technology, helps beginning or experienced clients with a smooth investing journey.

Best Features

  • Advanced trading platform: Its Trader Workstation offers real-time data, extensive charting capabilities, automated trading strategies, and advanced order types to assist investors in a seamless forex trading experience.
  • Broad product range: IBKR provides wide access to many currency pairs for trading, giving traders more choices in forex trading.
  • Super-low spreads: The tight 0.01 pips offer reduces traders’ costs, meaning more profits in returns.

Review: 2.1 stars of 24 from 24 reviews

“IBKR exchange rates are way better…overall, I would highly recommend IBKR, have used them for a few years now.” – Mr. Paul Wee

Common Mistakes & Strategies for Success

Strategies

Forex traders use various tactics to explore for gains in the currency market. Among them, three popular approaches used by traders are:

  • Carry trade: This strategy involves borrowing a low-interest-rate currency and investing in a high-interest-rate currency. Traders profit from the interest rate differentials between the 2 rates. However, it does not come without risks. Interest rate fluctuations and economic trend reversals may alter the consequences.
  • Range trading: This strategy aims to exploit currency pairs’ tendency to bounce back by buying near support levels, where they tend to fall further, and selling near resistance levels, where they tend to fall further. Traders use technical indicators, such as Bolliger Bands, to look for opportunities in the market. Nevertheless, past performance is not a guarantee of the future. Investors may suffer losses due to course reversals.
  • Trend trading: The strategy focuses on detecting and bankrolling the prevailing market trend by buying and selling high or buying low and selling high. Investors use charting tools or other technical indicators to identify market opportunities for entry or exit.

Technical Analysis vs. Fundamental Analysis

Technical analysis and fundamental analysis are two primary methods used by traders and investors to evaluate securities and make investment decisions. 

FeatureFundamental AnalysisTechnical Analysis
DefinitionEvaluates securities by attempting to measure their intrinsic value.Uses statistical trends gathered from trading activity, such as price movement and volume.
Type of InvestorsValue investors, long-term investors.Day traders, swing traders, arbitrageurs.
FocusFinancial statements, company health, industry position, market conditions, economic factors.Price charts, trading patterns, indicators, and trends.
Time HorizonLong-term investment decisions.Short-term trading opportunities.
Data UsedEarnings, dividends, future growth, return on equity, profit margins.Historical prices, volume, moving averages, RSI, MACD.
GoalTo determine the real value of a stock and buy/sell based on under/overvaluation.To predict price movements and capitalize on price volatility.
Example TechniquesDiscounted cash flow (DCF) analysis, economic moat evaluation, P/E ratio.Support and resistance levels, chart patterns, momentum indicators.
Decision BasisEconomic, financial, and qualitative factors.Price trends and patterns derived from market data.
Predictive ElementProjected company and economic performance.Price movements based on historical data and trends.
Psychological/Sentimental InfluenceLess influenced by market sentiment. Focuses more on long-term potential.Heavily influenced by trader psychology and market sentiment.

Common Challenges and Risk Management

Forex traders often face several challenges, including:

  • Jumping into trading without understanding the market fundamentals.
  • Engaging in trades without defined objectives or strategies.
  • Not using protective measures like stop-loss orders effectively.
  • Excessively frequent trading, often to compensate for losses or out of impulse.
  • Trying to recover losses quickly through aggressive trading, typically following a loss.

Three key risk management strategies in forex trading remain particularly effective:

  • Position Sizing: Allocate either a fixed percentage or a specified amount of capital to each trade to limit potential losses.
  • Stop-Loss Orders: Establish a predetermined price or price range at which to exit a position, minimizing losses in volatile market conditions.
  • Take-Profit Orders: Place an automatic order to sell a position once it reaches a target price, securing the desired profit.

FAQs

1. Can I trade forex with S$100?

Yes, you can start with a required minimum deposit of S$100. However, the capital amount may exclude your choice of brokers from requiring large deposits and affect your other investment preferences.

2. Can I trade forex with S$25?

Yes, but the choice of the right broker is more restricted, and so are your investing criteria.

3. How to learn to trade?

Traders can enhance their knowledge and skills using various resources:

  • Online Courses: Platforms like Investopedia Academy, Forex.com, and IG Academy offer comprehensive training.
  • Books, Webinars, Podcasts: A wealth of information is available through libraries, professional sites, and broker platforms.
  • Forex Forums and Communities: Participating in these online groups allows traders to exchange insights and experiences, benefiting from collective wisdom.

Closing

Whether you’re just starting out or you’re an experienced market participant: always continue to learn and adapt. The forex market is dynamic and demands a strong blend of discipline, knowledge, and emotional control. Success in this field is not just about understanding the markets, but also about understanding yourself. Last, investments carry risks, so thorough research is necessary before investing.

Key Takeaways

  • The Monetary Authority of Singapore strictly regulates forex markets, ensuring a secure trading environment for both new and experienced traders.
  • To succeed in forex trading in Singapore, it’s crucial to engage in continuous learning and practice, utilizing demo accounts and educational resources available through top brokers.
  • Utilize both technical and fundamental analysis to make informed trading decisions, and employ risk management techniques such as position sizing, stop-loss, and take-profit orders to safeguard your investments.

Need some financial support? 1 Fullerton Credit offers loans up to 6X your monthly salary with 1-4% interest rate that can be repaid up to 12 months! Request a quote to compare your options. 

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