A Basic Guide to Forex Trading

Forex trading with IG Singapore - set up a free account and you could start online forex marketing trading from just pips on over 90 currency pairs.

So there is always a possibility of counter party risk. Contact us New client:

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Forex trading is an activity where speculators participate in the global financial markets with the objective of profiting from the price movements between currencies. Learn the basics of forex trading and how you can do it in Singapore.

So in order to trade stocks you have 2 transaction cost to cover, the commission and the spread. But what about forex? If you made profits, your equity will be added accordingly. Likewise if you sustain losses, your equity will be deducted accordingly. Forex trading is a leveraged instrument. It is not uncommon to see broker offering 1: But leverage is a double edged sword. And this is the reason why you hear stories of traders busting their trading account. They are leveraging excessively relative to their account size, even a small price movement against them is enough to wipe out their trading capital.

In forex trading, there is something called the carry trade. When you have a positive carry trade, it means that the currency you are long pays a higher interest rate than the currency you are short. You are long Audjpy, this means you are buying the Aussie and selling the Yen. The Aussie currently pays interest of about 2. So there is always a possibility of counter party risk.

And for you the retail trader, your counter party risk is usually your broker. In other words, the value of a currency price either increases or decreases. Forex Trading is a method of making a profit by trading on currency pairs. Trading Forex in Singapore can be a profitable venture if you know how to do it. While in the past Singapore Forex trading was a challenge, it is no longer the case. Today there are many international licensed brokers for Singaporeans. Your Funds are at Risk.

To trade Forex currencies online, a new trader must open an account with a broker. Brokers own trading companies that provide a platform or place where Forex Traders can trade through an online account by the use of the customized software.

ECN Trading in Singapore is one of the best online trading methods. By trading with a broker who offers the use of an Electronic Communications Network ECN to their clients, the trader can be connected with other buyers and sellers of currency pairs.

The broker will usually charge a small commission fee for this service, but the benefits of trading through an ECN include the ability to trade after closing hours. ECN Trading prevents brokers from trading against the customer.

Trading through Meta Trader 4 Singapore is a good idea for new traders. Meta Trader 4, developed by MetaQuotes Software helps new traders through the provision of tools for price analysis, the placement and management of trades. Traders on Meta Trader 4 have the option of automated trading.