When choosing a forex broker in Singapore, there are five main areas to look at before signing up. Forex traders need to check the trading platforms and CFDs offered, along with the associated spreads and fees with different accounts, the regulation of the forex broker (MAS or another top-tier international authority), and finally, the minimum deposit requirements. Discussed below is what to look when selecting for in a Singaporean forex broker along with recommendations for the top forex brokers in Singapore.
1) Forex Trading Platform
If you are new to forex trading a user-friendly, intuitive platform will allow you to familiarise yourself with trading in the forex market. Monetary Authority of Singapore (MAS) regulated brokers such as Oanda and Interactive Brokers offer proprietary webtrader platforms designed to be a smooth introduction to forex trading.
Experienced traders’ tend to have a preference in regards to trading platforms, with MetaTrader and cTrader platforms dominating the market. Hailed as the gold standard for retail investor accounts, MetaTrader 4 was initially designed to allow retail investors to trade foreign currency in a professional environment. After the platform’s release in 2005, MetaTrader 4 became hugely popular due to its automated trading features including Expert Advisors.
MetaTrader’s most recent release, MetaTrader 5, allows users’ to trade a greater range of financial instruments including commodities and stocks. MetaTrader 5 provides similar Expert Advisor functions to its predecessor with the addition of Market Depth and multi-currency backtesting. Additionally, MT5 allows for more sophisticated charting with 21 timeframes compared to MT4’s 9 timeframes.
cTrader is suited to seasoned traders’ due to the advanced order tools available, including the ability to reverse, double, or close out all open positions in a single click. The extensive order types and trading tools allow experienced forex traders to develop advanced trading strategies that can minimise risk and maximise trading success.
When deciding which forex trading platform suits your needs, it is worth exploring the advanced trading tools offered for different platforms. For instance, Pepperstone allows MetaTrader users’ to download Smart Trader Tools, an exclusive suite of add-ons to assist strategy development and Expert Advisor efficiency.
Many top forex brokers offer demo accounts for traders’ who are unsure which trading platform suits their needs. Demo accounts provide a virtual money balance where traders can familiarise themselves with the platform and test trading strategies – a useful tool for both beginner and advanced forex traders.
2) Range of CFDs Offered
When choosing a forex broker and trading platform it is important to check whether they offer the financial instruments you are looking to trade and the access to global markets required. Although all forex brokers offer major forex pairs such as EUR/USD, GBP/USD and EUR/JPY, certain minor or exotic currency pairs may not be offered.
In addition to forex trading, particular brokers offer wider product ranges that can be used to diversify an investment portfolio. Traders’ may want to minimise risk and diversify their portfolios by trading index, commodity, metal, share, or bond CFDs. Particular brokers offer significantly larger market access than others. For instance, MAS regulated broker CMC Markets offers trading on over 300 currency pairs, 12 cryptocurrencies, and 9400 shares, whilst Saxo Markets offers futures, ETFs, mutual funds, yet no cryptocurrency CFDs.
With cryptocurrency’s increasing popularity, many brokers offer CFD trading on products such as Bitcoin, Bitcoin Cash, Litecoin, Ethereum and Ripple. Due to cryptocurrency’s volatility and high-risk nature, leverage offered tends to be much lower than forex products, averaging 5:1.
3) Spreads And Fees
Prior to picking your next Singaporean forex broker, it is worth establishing which fee structure is best suited to your currency trading needs. Forex brokers tend to offer two different commission structures, with either a commission-free spread or a round-trip commission fee with tighter spreads.
With commission-free structures where fees are included in the spread, forex traders will see larger spreads yet no additional commission fees. For major currencies, all-inclusive spreads can start at 1.0 pips.
When paying round-trip commission, traders may gain access to ECN-like spreads as low as 0.0 pips when trading CFDs with certain forex brokers such as Pepperstone. With top-tier liquidity providers, certain forex brokers are able to offer tight spreads similar to ECN spreads, providing retail investor account holders access to competitive, institutional-grade pricing.
It is important to beware of hidden fees that will make the spreads offered less competitive. Some forex brokers charge inactivity, deposit and withdrawal fees that can cause spreads to be less competitive than they initially appear.
For those wanting to make frequent withdrawals, it is worth choosing a forex broker that charges no or competitive withdrawal fees and offers withdrawal in different base currencies including the Singapore Dollar. Likewise, if you are not an active trader it is best to establish whether the forex broker charges inactivity fees. With certain top forex brokers, clients are penalised if they trade infrequently, reducing any net profits from any successful trades made.
4) Monetary Authority Of Singapore Regulation
As the main regulatory body and Central Bank of Singapore, MAS issues Capital Markets Service Licenses to Singapore forex brokers and ensures financial markets run fairly and efficiently. Many forex traders choose to invest in Singapore’s financial markets as they are the leading financial hub in Southeast Asia, and in the top 4 in the world.
Many requirements for forex brokers in Singapore are similar to the leading financial hubs of the world, making MAS a credible authority when compared to international standards. As with MAS broker requirements, FCA (UK), SFBC (Switzerland), NFA (US), and ACPR (France), all require client funds to be held in segregated accounts. Segregated accounts ensure forex traders’ funds are not used for day-to-day business expenses, offering some protection to traders if a broker were to come into trouble or fail.
MAS strongly promotes both domestic and international forex traders’ to invest in Singapore’s financial markets. As such, Singaporean forex traders’ have the advantage of tax-free capital gains if trading forex is not their main source of income, making forex trading an appealing investment and hobby for many.
Forex traders’ should beware that cryptocurrency is not currently regulated by MAS as the financial product is not considered legal tender. Due to the lack of regulation and volatile nature of Crypto, investors’ should be aware of the high risk associated with the product prior to trading it.
If you are wanting to trade forex with a broker that is not MAS regulated or based in Singapore, it is recommended to find a broker that is overseen by other top-tier authorities with similar standards and regulation. For instance, the Australian forex broker Pepperstone is overseen by ASIC and FSA, and similarly to MAS, requires client funds to be held in segregated accounts to provide investors’ protection.
To check whether a broker is regulated by MAS, search the broker’s details in MAS’s Financial Institutions Directory online.
5) Minimum Deposits
Minimum deposits vary among different forex brokers and the account types offered. Many standard accounts require an initial deposit of SGD $0-200. Whilst VIP and Pro accounts require significantly larger minimum deposits, suited to high volume, experienced traders.
Although the industry average for initial deposits is reasonable, certain MAS regulated forex brokers require much higher deposits. For example, Saxo Bank requires a $10,000 minimum deposit, ruling out many potential forex traders.
When depositing funds with a forex broker in Singapore, it is important to check whether certain deposit methods carry additional fees. For instance, some forex brokers charge a fee if traders use credit cards, whilst others will charge a flat-rate fee for each deposit.
Best Forex Brokers In Singapore
Interactive Brokers have recently expanded their brokerage services to Singaporean clients. In 2019 they received a MAS license, with the forex broker setting up an office in Singapore in 2020.
Interactive Brokers clients’ are able to execute trades on the brokers proprietary platforms such as Client Portal (desktop platform), WebTrader (online platform), IBKR Mobile, and IBot, with a free demo account available for prospective forex traders. For forex traders who prefer the advanced trading tools offered by MetaTrader and cTrader platforms, fx brokers such as Pepperstone are better suited.
Interactive Brokers is seen as an accessible forex broker as they require no minimum deposit and charge no withdrawal fees, yet users will pay a $10 inactivity fee per month if they do not generate $10 of commission for the forex broker. Interactive Brokers are an excellent choice for Singaporean clients wanting large global market access, with products offered including Fx, Bonds, Options, CFDs, Cryptos, Warrants, Indices, ETFs, and Metals.
Oanda is a MAS regulated broker offering low fees and an easy introduction to trading CFDs and forex. The forex broker requires no minimum deposit, charges no deposit fees, with a free withdrawal if clients are using PayPal. Yet, be aware of the high withdrawal fees connected to bank transfers.
Users can trade on Oanda’s proprietary web platform or the MetaTrader 4 desktop platform. The forex brokers web and mobile platforms are a great option for those new to foreign currency trading due to the interfaces’ intuitive and user-friendly design. A restriction of OANDA is the limited global market access. Although the broker offers a wide range of Contracts for Difference, including Stock Index, Bond and Commodity CFDs, the broker provides a modest number of currency pairs compared to top forex brokers such as Pepperstone, making the broker better suited to those new to forex trading.
City Index is an established forex broker overseen by MAS with its parent company listed on the New York Stock Exchange. Specialising in forex, CFDs, and crypto, City Index is a top forex broker with low fees and no minimum deposit for standard accounts if traders deposit funds via PayPal or bank transfer.
For traders wanting to focus on forex and CFD trading, City Index is an excellent option with market access to over 84 currency pairs, 4500 stock CFDs, 57 ETF CFDs, and 8 Cryptos. City Index forex traders have a choice of platforms including WebTrader, Advantage Web and MetaTrader 4, as well as City Index’s mobile app. All of which offer a customisable trading platform where advanced order types can be executed.
Alpari is a forex broker based in Mauritius and regulated by FSC of the Republic of Mauritius. Like MAS regulated brokers, the FSC offers investors protection by requiring client funds to be held in segregated accounts.
Suited to both beginner and experienced traders, Alpari offers access to over 250 markets including Forex, Indices, Metals and Crytpo. ECN-like STP (Straight Through Process) trades can be executed on either MetaTrader 4 or MetaTrader 5, via web, desktop and mobile platforms. Alpari clients’ have a range of account types to choose from that provide varied market access, including a standard MT4, Micro MT4, Pro MT4, and ECN-like MT4 or MT5 account.
Pepperstone offers international forex traders low fees, ECN-like spreads, a selection of the top trading platforms, and an excellent range of currency pairs and crypto CFDs to trade. Although not MAS regulated, Pepperstone is overseen by two of the most credible financial authorities in the world – the FSA (Financial Conduct Authority, UK) and ASIC (Australian Securities and Investments Commission). If you are looking to trade in an environment similar to ECN trading with no dealing desk (NDD) interference, Pepperstone is a great option for forex trading.