What are the Best Times to Trade Forex in Singapore?
The best time to trade forex in Singapore is between 9 and 12 PM in the evening, as the London and New York markets overlap, creating the best trading conditions.
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Owing to its global status as a trading hub, Singapore has an established reputation as a global forex brand. An established regulatory framework and favorable taxation law make it an attractive destination for prospective forex traders.
Here are the necessary steps to start trading Forex in Singapore:
The Monetary Authority of Singapore (MAS) is the primary regulatory body overseeing the financial industry in Singapore, including Forex trading. All Forex brokers operating in Singapore must be licensed by MAS, and they must comply with the Securities and Futures Act (SFA), which includes regulations for dealing in capital markets products, such as Forex contracts.
MAS has expanded the scope of this regulation to include over-the-counter (OTC) derivatives. Brokers must apply for a Capital Market Services (CMS) license to operate legally in Singapore. Therefore, the first step to trading in Singapore starts with choosing a MAS-licensed forex broker.
The key considerations include:
To start trading, you must open a Forex trading account with a licensed broker. The process generally involves:
Before diving into the Forex market, it's essential to understand the basic concepts and terminology. Forex trading involves buying one currency while selling another, and these transactions are carried out in currency pairs (e.g., SGD/USD). Traders aim to profit from changes in the exchange rates between these pairs.
Key concepts to know include:
Becoming a successful Forex trader requires time and effort. Not only does it entail knowing the market concepts, but knowing yourself as well, as trading style makes a cornerstone of a trading career.
The most typical trading approaches include:
Before risking real money, practice with a demo account provided by your broker. Demo accounts allow you to trade with virtual funds, giving you the opportunity to familiarize yourself with the trading platform, test your strategies, and understand market dynamics without any financial risk.
A good trading plan is like a roadmap of all possible activities. It must include:
Singapore operates on GMT+8, while New York functions on GMT-4 (a 12-hour difference). This overlap between the Asian trading session and the closing of the New York session, followed by the opening of the European session in London (GMT+1), is a factor to consider for all short-term traders.
Consider how these time zone differences might affect the volatility of your chosen SGD currency pairs. For instance, the SGD/USD pair might experience higher volatility during the overlap between the Asian and New York sessions due to increased trading activity.
Singapore has a favorable tax regime for Forex traders. The Inland Revenue Authority of Singapore (IRAS) considers Forex trading speculative. Hence, the gains from Forex trading are not subject to income tax for individuals who trade as a hobby or side income. This allows traders to retain more of their profits.
However, if you trade Forex full-time or as a primary source of income, it is considered a business activity, and your gains will be subject to tax. It is important to consult with a tax professional to ensure compliance with tax laws and regulations in Singapore.
Forex trading is legal in Singapore. Anyone can trade forex markets as long they access them through an authorized broker, per The Monetary Authority of Singapore (MAS) regulation.
Forex and derivatives trading is tax-free for non-professional traders. However, taxation laws might vary based on personal circumstances and require a consultation with a specialized tax professional.
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What are the Best Times to Trade Forex in Singapore?
The best time to trade forex in Singapore is between 9 and 12 PM in the evening, as the London and New York markets overlap, creating the best trading conditions.
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