You too can become one of the fabled trading nomads. I’m not talking about those many who travel around Asia or other cities in Europe and America to teach English for a year before returning home; no, these are different people – they are traders on the forex market.
Here are some tips on how to become a trading nomad in Singapore.
Assess your strengths and weaknesses.
Firstly you must assess your strengths and weaknesses. I would recommend that you have some experience trading stocks or other markets before giving the Forex market a go; it is very different from traditional markets like stocks and has its own set of rules. Also, be prepared for an initial bad run where most if not all your trades lose money. Suppose you can ride this out, though, then there’s good potential for a long term career.
Use a broker or open a direct trading account.
You can either use a broker or open a direct trading account with a Forex market maker, and both have their pros and cons. Note, though, that using a broker will disqualify you from dealing directly, so only go the broker route if your goal isn’t to become an independent trader in the future. You must register as self-employed when starting since most brokers don’t accept employees of other companies until they have been gainfully employed for at least six months.
Use your capital
Once set up, you’ll need some capital behind you; this is what sets trading nomads apart from the many people who want to be one but give up after their first month of losing money (see earlier note about bad runs). If you have been trading for a while, you should have some capital from your profits, but saving up around $5,000 would be a good start. You can also borrow money from the bank or rent it from somebody else, but this will incur extra cost and is not recommended.
Look at the markets
Once set up and ready to go, you’ll need to look at the markets. Most nomads trade the EUR/USD as it’s relatively straightforward and has lots of liquidity (i.e. people want to buy and sell). The best times to trade are when the market is about to open on Sunday evening London time (8 PM GMT) or during US hours; avoid Asian sessions at all costs as they tend to be more volatile and hasty.
Make some money
Once you’re set-up, have your capital behind you, are trading the EUR/USD and are comfortable with the markets, it’s time to make some money. Be prepared for both lots of ups and downs. You may experience some great months followed by terrible months where you lose more than half of your monthly profit, but if you can ride out these periods, there is a future as a trading nomad.
Focus on long term trade opportunities
When looking for trade opportunities, you should purely focus on the longer-term timeframes (weekly and above) as they give a more accurate picture of what will happen than the daily chart where price volatility is at its greatest. If you’re in a position with another broker, then your account might not allow you to deal direct; if this is true, I’d recommend closing it and only dealing through your new broker until you’ve paid back all your debts (if any).
Be prepared for whipsaws.
Be prepared for whipsaws (price moving in one direction before reversing suddenly) when using trend lines; this is why you must keep an eye on volume and shifts in volume, which can indicate that a reversal is near. I recommend always waiting for a closing price outside of the trend line and trading only in the same direction as the trend.
New traders interested in trading options in singapore are advised to use an online broker with an excellent reputauion from Saxo Bank and trade on a demo account before investing real money.