This article covers two of the types of forex Singapore accounts that are available to you.
The forex Singapore market involves the buying and selling of global currencies. This market offers traders high liquidity. The unique feature of this market is that individuals are able to trade alongside large hedge funds, banks and corporations. All that you need to do is open a trading account.
There are three types of account you can open. You have the option of a mini, standard and a managed account. Each of these accounts comes with its own pros and cons. The account type most suited to you will depend on the hours you have available for trading on a daily basis, your initial capital investment and your level of risk tolerance.
With a mini account you will be trading smaller lots than in a standard trading account. These types of accounts are normally offered by forex brokers as an attraction to beginner in the forex Singapore market.
The lot value in this account type is $10,000. This is an ideal account for traders who do not have much experience in this market. You can test your trading strategy and plan without risking the entire balance of your account. The initial investment for this type of account is normally between $250 and $500. Some brokers would offer you leverage ratios as high as 400:1 on this type of account. You can limit the high risks attached to forex trading by opening this type of account. It is an easy to handle account. If you feel that a standard lot puts you at too much risk, you can make use of this account to trade a few smaller lots instead of one big standard lot.
The main disadvantage of a mini account is that the small forex movements make your profit level very low. One pip is worth $1 which means you have to make use of high leverage ratios to obtain reasonable returns.
Forex Singapore Standard Trading Account
This is the account that is most commonly utilised in the forex Singapore market. It offers you access to standard lots which are equal in value to $100,000. This does not imply that you have to make a deposit to that value before you can trade. The rules of margin and leverage means that you may only need about $1,000 in your account before you can commence trading in standard lots.
The initial funding for this account is normally higher than a mini account, hence you will receive better service and additional perks than you would in a mini account. Each pip in a standard account is worth $10. This means that if your currency pair moves 100 pips in a single day, you could show a profit of $1,000 for that day. You cannot make this sort of profit in any other account, unless you intend trading more than one lot.
The disadvantage to this type of account is the larger initial investment that is required, compared to the mini account. You will need at least $2,000 to open this type of account. The initial amounts vary and are dependent upon the forex broker you register with.
There are forex brokers who offer both these accounts, along with a premium account and managed accounts.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS