Managing Leverage For Maximum Profitability In Singapore Forex

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Managing Leverage For Maximum Profitability In Singapore Forex – Content tagged 5 Ways You Can Use Forex Trading to Supplement Your Stock Portfolio Where there is high volatility, there is both opportunity and risk.

This article was written in collaboration with Moomoo Financial Singapore Pte. Ltd. All opinions expressed in this article are independent opinions based on our research. is not responsible for any financial loss that may arise from any transaction and readers are encouraged to do their own due diligence. You can view our full editorial process here.

Managing Leverage For Maximum Profitability In Singapore Forex

Managing Leverage For Maximum Profitability In Singapore Forex

Shares, which represent equity ownership in a company, offer the possibility of long-term capital appreciation but come with high risk and volatility. Currently, bonds are less volatile and generate fixed income. By combining these two asset classes, which are generally negatively correlated with each other, investors can balance the level of risk and return in their portfolio.

What Is Forex (fx) Trading?

Generally, when stocks perform poorly due to market volatility, bonds are expected to act as a portfolio stabilizer due to their low volatility and help reduce overall portfolio risk. However, this is not always guaranteed. In 2022, due to the rapid increase in interest rates, both stocks and bonds collapsed, leaving investors to bear the full burden of the market decline.

In contrast, the broad US dollar index – used to measure the value of the US dollar against a basket of currencies widely used in international trade – appreciated by 7.9% during the same period, underscoring the potential benefits of turning your portfolio into success. other asset classes such as forex.

The forex, or foreign exchange market, refers to the global, decentralized market where banks, institutions, and investors buy and sell currencies to hedge or hedge their portfolios against currency risk. Given the mutual relationship of funds in an investor’s stock and bond portfolio, it can be another way to make a profit in your portfolio.

Unlike stock markets, which are limited to fixed working hours per day, the forex market operates in long trading hours – 24 hours a day, 5 days a week – due to different international locations. Moreover, the exchange between the parties is completed directly rather than through any intermediate exchange.

Best Forex Brokers In Singapore

Generally, forex trading hours start every week from 5 am on Monday to 6 am on Saturday (SGT). But this can vary by an hour in March, April, October, and November as countries switch to daylight saving on different days.

Long trading hours mean you have more flexibility to take advantage of opportunities outside of normal stock trading hours. You will be able to react quickly and profitably to any major market news or events that may affect currency prices instead of waiting for a specific exchange to open.

Like stocks, FX pairs also trade in minimum units of one unit. However, for FX pairs, this can be equivalent to placing an investment as large as 100,000 units of base currency in the size of a regular lot or as small as 1,000 units of currency for a micro lot. For this reason, forex trading platforms generally offer traders a high leverage of 20X when trading forex compared to 2-3X for stocks.

Managing Leverage For Maximum Profitability In Singapore Forex

Also, currency movements in FX pairs – which can trade up to five times – can be small, whether on a daily or weekly basis. As a result, averaging is commonly used in forex trading, allowing investors to profit even from small FX movements for a small amount of capital.

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For example, with 5% or 1:20 on the moomoo trading platform, you can manage a micro lot equal to US$1,000 USD/SGD cross for US$50.

Of course, power can be a double-edged sword; while it can increase your potential gains, so does your exposure to potential losses. As with any investment strategy, it is important to stay within your risk tolerance and not trade at the highest level, as any sharp move against you, may result in a limit call.

The forex market is the largest and most liquid financial market. As of 2022, the forex market has an average daily revenue of around US$7.5 trillion. This large amount of money in the market enables the transaction to be placed faster and more with strict expansion.

For investors, forex trading can be another source of income that can be speculative in nature compared to their long or short term portfolio. Because there are more than 190 countries in the world, there are many contracts of currencies available for investors to trade in the forex market, giving investors many trading opportunities.

Best Forex Accounts In Singapore

(1) Majors – They represent the most traded pairs such as EUR/USD, GBP/USD, USD/JPY, and USD/CHF.

(2) Minors – These are currency pairs such as EUR/GBP, GBP/JPY, and CAD/CHF, which are not linked to the US dollar and are generally more widely spread and less liquid than the major pairs.

(3) Exotic – These pairs of currencies include emerging market currencies, which are less liquid and may have a wider spread than smaller pairs. These include USD/SGD, AUD/SGD, and USD/MXN.

Managing Leverage For Maximum Profitability In Singapore Forex

In the moomoo trading app, investors can trade over 30 currency pairs as well as stocks, bonds and options.

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Markets fluctuate in cycles that are affected by many factors such as trade flows, policy changes, economic data, and geopolitical news events. While most stock markets allow only long trades, there are no such limits with forex trading. Investors can make long and short plays that point to profit from the world’s major trends.

This can be useful because (1) markets fall faster than they rise, and (2) the forex market can see volatility during major news announcements such as CPI data, unemployment data, and ISM manufacturing PMI. You can stay on top of that news with moomoo’s Financial Calendar, which allows you to filter by country and priority level—top stars, the most important economic data.

Investors can take advantage of trading different pairs based on their strengths and weaknesses between the base and quote currencies.

When investing in stocks, it makes sense to expect short-term volatility or periods when the market may move sideways. Some investors may use derivatives like options to hedge their long-term investments.

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In the same way, investors can hedge the currency risk they are exposed to when buying foreign stocks. Without hedging, Singaporean investors who buy US stocks may see their returns reduced if the US dollar falls against the Singapore dollar at the time they sell the stock or they may make additional returns if the US dollar strengthens against the Singapore dollar.

To reduce currency risk, investors can sell foreign currency in their stockholding and buy their domestic currency, thereby locking in the exchange rate. For example, if you bought US$10,000 worth of Tesla shares at 1.34 exchange rate (US$1 = 1.34 SGD), you can sell USD and buy SGD to hedge against any fall at the transition stage.

This can be especially useful when large FX movements are expected in the market. While hedging can help reduce uncertainty when investing in overseas stocks, investors also need to understand the risks and consider the financial costs involved.

Managing Leverage For Maximum Profitability In Singapore Forex

Also Read: Treasury-Bills, Fixed Deposit Accounts or Money Market Funds: Advantages and Disadvantages of Using Fixed Income Investments to Protect Your Capital.

How To Trade Forex In Singapore

Now you can trade forex on moomoo as well as stocks, futures, and options. Enjoy zero commission costs and low spreads from 0.6 pips on major pairs such as EUR/USD and USD/JPY. You can enjoy a special monthly FX discount* from US $30 to US $200 when you trade between 10 and 200 lots.

Check the Forex tab under Markets in the moomoo app to see the full list of FX for sale. FX pairs are classified according to geographic regions such as Asia-Pacific, Europe and Americas, and others. You can get a quick overview of price movements between different pairs to get a better understanding of how certain pairs are performing against each other.

From here, you can select an FX pair to trade. For example, if you selected the USD/SGD pair, you will be redirected to the quotes page, as shown below. Here you will find live quotes and charts, share or read comments posted by other moomoo users, and stay updated on the latest news related to the FX pair.

Placing a forex trade on moomoo is easy. With this new feature it is now easier for investors to separate and manage their portfolios in different asset classes in one investment app. Sign up and download the moomoo app today and take your investment to the next level.

How To Trade Forex

All opinions expressed in the article are the independent opinions of. Neither Moomoo Singapore nor its affiliates shall be responsible for the content of the information provided. This advertisement has not been reviewed by the Monetary Authority of Singapore.

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Managing Leverage For Maximum Profitability In Singapore Forex

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