Online trading in Singapore - trading online for beginners and professionals

What is Online Trading?

Online trading has become an incredibly popular means to transact or deal with financial products.

It's not just the different financial instruments that are available online, even brokers and brokerage firms and trading platforms have an electronic version these days.

In conventional trading, whenever a trader wishes to invest his money, he has to place a call to his brokerage firm, place a request to purchase specific security at a desired amount. The broker places the order in the market and later passes on the confirmation to the trader. Once the trading account is confirmed, the broker's fee is charged and within the predetermined period, an order is placed. 

Online trading effectively eliminates the need for a broker. Instead, these days, investors are free to make their trades as and when needed. Online trading in Singapore is as simple as it sounds. Securities are purchased and sold online, and the funds required for these transactions are also transferred online.

Depending on the trading platform you opt for; different investment vehicles are available.

How to Trade Online?

To start trading in Singapore, there are two primary options available.

The first option is to open a cash trading account with a securities brokerage firm of your choosing. After this, you need to link this trading account to a Central Depository Account (CDP) account. The second option is to create a sub-account with one of the online securities brokers in Singapore.

This latter method involves registering with a trading platform online that will connect you with the market and provide access and the ability to make investments.

Online Trading Platform

Since this is perhaps the most important tool to help traders of Singapore find investment opportunities, there is much to focus on.

To start investing, you must know all there is about your desired trading platform.

What is an online trading platform?

An online trading platform is essentially a computer software that offers trade and transactions in financial instruments in real-time.

All the transactions take place according to the prevalent market prices. The only difference is all these operations take place via a computer or any other mobile electronic device. A simple explanation is that it is a helpful instrument that allows investors to invest in financial markets without any physical presence. 

How to Start Trading Online

Whether it is options, stocks, cryptocurrencies, or commodities, there's something on offer for all potential traders. If you want to start trading online, you must find an online broker that provides the trading and environment you want.

From here, you can visit their homepage and can enter into their online community. This involves registering an account on their servers.

How to register

Registering on an online trading platform is quite simple.

You don't have to spend hours together to open an account for yourself. Also, you generally don't have to spend any money here. To register just visit the website of your broker, click the sign-up prompt, and fill in the required details.

It will hardly take a minute or two to fill out the details required in the registration form. The primary fields you need to fill are your name, email address, and password. Don't forget to accept the terms and conditions of the platform if you wish to use it. To activate the account, follow the activation link, which will be sent to your registered email id.

After activation, you need to sign into the account. Once your account is up and running, you need to merely add funds and start trading. 

Registering on an online trading platform
Registering on an online trading platform

How to open a demo account

A demo is usually offered alongside most of the top online brokers available to Singapore. These are invaluable tools that provide access and practice on the market, all for free. Since you do not have to invest any real money here, you can experiment with trading as much as you want.

These accounts are usually enclosed within the main account and accessible through the platform itself. This makes it easy to use alongside your real money trading.

How to open a real account

The real account with almost every single platform online begins when you make your first investment.

This will be the capital you use to make trades on the platform. Again, all that is required here is to register an account on a platform and make that initial deposit.

How to open account
How to open account

How to fund a deposit

There are several payment options available to deposit money to your trading account including credit card, debit card, wire transfer, E-wallets, and Bitcoins. These will vary from platform to platform and so you should ensure that your chosen broker has the payment systems you require.

You can make these deposits directly through the trading platform you use. This makes topping up during the process an easy and quick effort.

Deposit replenishment
Deposit replenishment

Minimum deposit amount

This is the smallest amount you can use to begin investing on a specific platform.

Each broker will have different requirements here. Manage your expectations based on the amount you wish to invest and select the range that is most comfortable for your situation.

How to withdraw money

The other side of deposits is withdrawals. This is the point where you can take out your hard-earned profits. Again, you will use the payment services available on the chosen platform in order to withdraw any funds.

Each broker will have their own set of requirements and restrictions around when and how much you can withdraw at any one time.

Ensure you are familiar with these and don’t get surprised when it comes time to make the transactions.

Trading markets

These are the financial instruments that you will use when navigating the market.

These involve the likes of stocks, indices, commodities, cryptocurrencies, options and more. Each of these have their own slightly unique way of operating and being invested in.

How to trade on the stock market 

The stock exchange is still one of the kings of the trading game. Traders invest their capital in shares of companies that are publicly registered on different exchanges from around the world. With this instrument being such a popular one to trade on, there is access to stock markets through most online brokers.

How to trade indices

Indices are the averages of the assets from a particular exchange. This creates a portfolio of that market which can then be used as a derivative to trade on. Since there is no direct value attached to these indices, they are not directly bought and sold. Traders make money through predicting the changes in value that will occur in the future.

Like with stock market trading, there are a lot of brokers that provide indices trading.

How to trade stocks

Stock trading generally involves acquiring shares in a particular company listed on the exchange.

To generate a profit, traders can go about buying and selling shares from a security they believe will see long term growth in the future. This is a very clear way of trading and appeals to many online investors for this reason.

Stock trading
Stock trading

Forex trading

Forex markets are easily one of the most popular instruments for current online traders.

This is because it is based on currency pairs and includes foreign currency from nations all around the world.

Forex trading
Forex trading

How to trade currencies

Currency trading can be readily found at many online brokers, due to its increasing popularity. These assets are grouped in pairs and therefore derive a relative value based on the pairing.

So, with Forex you are not looking for just growth in a particular currency but rather growth relative to another one.

Major pairs

These are the most commonly traded pairs. They include many of the most powerful currencies around the world, like the EUR USD and GBP. Their popularity allows traders to find a lot of information on them and their price changes.

The most popular currency pairs
The most popular currency pairs
Cross courses

These are currency pairings that do not include the USD.

An alternative selection of securities that aren’t dependent on the value of the dollar at all. These typically focus on the Euro and Yen but can include a range of other currencies.

Cryptocurrencies trading

Cryptocurrencies are a decentralised digital currency that can be traded through an exchange or as a derivative through a broker. They are generally volatile assets and include a wide variety of independent coins, established across their own network.

Cryptocurrencies trading
Cryptocurrencies trading

How to trade bitcoin

The most popular cryptocurrency worldwide is bitcoin.

Due to its popularity, it is the easiest coin to find and trade on broker platforms online. This makes trading it relatively easy to do, simply through connecting to any platform that hosts crypto trading.

How to trade bitcoin
How to trade bitcoin

How to trade ethereum

Ethereum is worth a lot less than bitcoin at the moment, however, it is seeing notable growth and is currently a well-recognised crypto. Having risen above most of the pack, Ethereum has gathered a significant following and joins most crypto traders’ offerings as a result.

How to trade ethereum
How to trade ethereum

How to trade ripple

Slowly going down the list, ripple is another growing cryptocurrency. Not as popular as the above two, this asset still sees substantial amounts of trading action. This is especially the case with derivative markets, where there is no exchange of coins but rather trading on the value of the asset alone.

How to trade ripple
How to trade ripple

Commodity trading

Commodities are those goods that are used regularly within certain business sectors.

Due to this, commodities tend to hold their values quite well, being inherently attached to the good itself. They include precious metals, like gold and silver, and other goods like crude oil.

How to trade metals

Metals trading is primarily done through derivative trading. This can often be seen in the form of ETFs, which are a portfolio of assets compiled together. Since their values are intrinsically high, these make good additions to a trader’s repertoire.

How to trade gold

Gold is easily the most well-known precious metal and a highly sought-after asset.

It has been used throughout history to demarcate the value of goods and currencies. Today, it holds a similar role in the trading market, acting as an ideal hedging method against losses through inflation.

As a result of this high level of interest, gold trading can be found at many of the top online brokers offering any form of commodity trading.

How to trade silver

Silver is traded in much the same way as gold. Both of these precious metals hold value incredibly well and make good additions to trader portfolios for this exact reason.

How to trade crude oil

Crude oil is a little different to the precious metals mentioned, but still serves a similar purpose in the grand scheme of things. Its use in day to day business is still very much essential and as such it retains value well and can be quite accurately predicted. Many commodity brokers will have this asset available to trade on.

Commodity trading
Commodity trading

How to trade assets

Assets are the bread and butter of the trading market.

These are the tools you will use to create value in the market and generate profit. Understanding how to best acquire, hold, and sell these securities is the secret to learning how to trade.

How to trade cfds

CFDs, or contracts for difference, are becoming commonplace amongst online brokers. These derivatives are generally used by platforms called market makers and do not involve trading a good with another trader. Rather, the trader is making deals on the changing values of these derivatives and generating profit through trades made directly with the broker.

CFDs are relatively easy to understand and use, especially as they do not require you to actually buy and sell anything.

How to trade etfs 

An exchange traded fund (ETF) is a collection of different securities collected together. These can be traded through an exchange, but most come in the form of derivatives. Since they are a collection of assets, they are inherently diversified and generally offer good stability in the market.

ETFs make for an interesting trading experience and a lot of quality brokers supply this experience to their clients.

How to trade binary options

Options trading has quickly become one of the most popular investment opportunities.

Binary options consist of a derivative trade that can only result in two possible scenarios. Either you are successful in the trade, or you lose the trade. Generally, you are trying to estimate the direction the price will move in the future.

The basic structure and ease of use of these trades make them a common choice for newer traders especially.

Invest in assets
Invest in assets

Safety of Internet Trading

Internet safety is always a hot topic. Understanding the risks involved is half the battle, the other half is picking the correct sites and platforms to use.

How safe is it to trade online?

Online trading is safe. However, considering the trading security threats and behavioural risks is important. For instance, whenever you place a trade, you take a risk. This risk essentially depends on your trading potential, the strategy you use, and how the underlying financial instrument performs.

The other half of the security of online trading depends on the security of the website or the platform you use. Online trading platforms use a secure server for encrypting data, offer a two-step authentication process, system monitoring options, automatic logout option, and encrypt the files using a secure socket layer encryption. Their customer support is also there to offer assistance.

Overall, if you are using a trusted and certified online broker, you are most likely going to be fine. All the same, stay vigilant when doing anything online.

My online trades are protected 

Again, this involves picking a reliable online broker. A good trading platform will go out of its way to ensure that your trades are always as protected as possible.  

When signing up, don't forget to set a strong password for your account. By linking your account with a phone number, you can also often use a 2-step authentication process to log in. When you sign in, you will receive a one-time SMS code for authorization.

There are usually other security features in place to ensure user verification and authorization. Another factor to consider is the payment service you will be using for your transactions. This will oversee handling of any investments put into your account and your profits that you take out of it. Pick a system you can completely trust and is permitted on the trading platform you use.

FAQ :

Is online trading safe?

Yes. Online trading is safe. As long as you are a prudent trader, are careful with the financial information you share, and select a reputable online broker then you have nothing to worry about. Online trading is more accessible and secure than most offline trading as well.

Yes, online trading is profitable. The profitability depends on the trades you make and the amount of time you dedicate to this craft. Like with anything else, practice makes perfect. There are a lot of factors that go into becoming a successful trader and the more you can isolate and develop these, the more success you will have.

Of course, trading has risks attached. Be aware of these risks, and the potential to lose trades. Money management and the amount you invest is definitely a big part of a successful trading strategy.

To start trading online, you need to select an online platform of your choice, create an account, and register yourself on the platform. Then, you just deposit funds into your account, and place trades. It is as easy as that for the traders of Singapore and most of the world nowadays.

The layout and structure of the online trade rooms is also inviting and intuitive for new traders to understand. Learning the basics is easier than ever. To help get started, you can also use the free demo many platforms will have available. This will give you as much practice as you need to learn the market and the platform you are using to make trades.

Day trading generally involves making many smaller trades over the course of a single day’s activity. This means that the trades will generally have very short time frames and expire rapidly. With multiple trades going at once, this can require a good deal of capital to start investing. At the same time, the trades are continuously expiring and potentially earning profits along the way.

Much of the required capital will depend on the specific requirements of the platform you use. This is because different platforms will have different deposit and investment requirements. It will directly affect the amount you can place on a single trade and the total amount you can use to make trades throughout the day.

Calculate your available funds and see if day trading is right for you and your chosen platform.

There are several authorized brokerage firms available to Singapore online. These are all readily available through the internet by visiting their website and joining their community. This means that a stable internet connection is required to start trading online.

Once you have settled on your future broker, you must find a payment system they have available to use. This will allow you to transfer funds from your bank account to your trading account on the platform. This can sometimes even be done directly through the bank.

Make the first deposit into your account and then use that to start investing. Many platforms will have various tools and tutorials to help you understand how their platform works and learn more about the market.

Utilise powerful assets like the demo accounts that let you practice and develop strategies. This will make trading for real a lot less stressful. Keep track of your finances and develop money management strategies to help plan out your investments.

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