Forex Trading Account Singapore – Advantages Over Stocks in Singapore

Forex Trading Account Singapore – Advantages Over Stocks in Singapore

Forex Trading Account Singapore

Stocks and shares are a great investment vehicle. It is what makes Warren Buffett extremely wealthy. As long as the company is generating a lot of profits with very small amount of capital or equity, it is worth investing. However, trading stocks is another story. Forex, on the other hand, has a lot of advantages over stocks and shares. Currency trading has become extremely popular and profitable thanks to these advantages. In this article, we will be sharing some of these advantages Forex provide compare to stocks in Singapore. Forex Trading Account Singapore

Extreme Liquidity

Forex market has a daily volume of USD $ 4 trillion daily while Singapore Exchange (also known as SGX) has only a daily volume of S$ 2 billion (about USD$ 1.4 billion). Although in both market, there is a lot of money, shares traders may sometime find themselves unable to sell or buy the shares they trying to trade. Forex, in the other hand, with such vast liquidity, has no issue of selling or buying the currency pair you want. This allows forex traders to cut their losses, liquidate their position faster and easier than Shares traders. Shares traders need to find a buyer first to sell and liquidity their positions.

24 hours, 5 days a week

SGX opens at 9 am to 5 pm. If you have a day job, you really need some assistance. For example, iPhone applications that allow you to trade through your 3G phone line subscriptions. However, not everyone can use a 3G phone anywhere, and anytime he or she wants. For example, a military personnel. Once you are off work and going home and use your internet connected computer, chances are, SGX is already closed.

Currency trading market is open 24 hours unless it is on weekend or holiday. This mean that you can trade before, during (if you have a 3G phone like iPhone) and after work. Beside, the best timing to trade Forex is at 9pm to 5am. During this period, US market and London market are open. Trading volume will be very huge.

Short Selling

SGX doesn’t allow Share traders to hold a short position beyond a day. However FX market allow you to short sell any currency without restrictions. This allow you to profit any direction of the market. Since trading currency is involve in selling and buying of one currency with another. There is no structural bias to the Forex market. Forex Trading Account Singapore

No commission or middlemen

Regardless of what you trade, there is always a broker helping you to do it. However almost all Forex Brokers charge no commission, no additional transaction fees for your trades. They profit from bid/ask prices, which is very cheap compare to Stocks Brokers’ transaction fees.

Spot trading also allow FX traders to deal with market-maker, whom is responsible for the pricing on a currency pair directly. Middlemen are impractical as it takes up time and it also cost fees. Currency traders will have faster trades with extremely little cost.

Unable to control the pricing

Imagine this, Temask Holdings is planning to buy ABC company’s shares. Would you buy that ABC company’s shares? I would. Any positions that a Hedge funds, big banks, or Super-Rich Individual like Warren Buffett or Bill Gates take will affect the shares pricing. Relying on insider news really helps in making money from shares. However, getting insider news is really really rare and maybe just a rumor.

Spot currency trading, on the other hand, it’s liquidity is like the ocean. To control a currency pair’s pricing, I believe it takes all the net-worth entities to work together. Even they work together, I am not sure is it profitable to do so for all of them.

Conclusion

Thanks to the above mention advantages that Forex has, there are more and more Forex traders in Singapore. Although stocks and shares are great investment vehicles, it is still unable to beat Forex’s flexibility and liquidity. However, both of them share the same advantages. In Singapore, as long as you profit through Capital Gain, it is Tax Free. Forex Trading Account Singapore