1. As with all things in life, it is important to start off with a understanding of the fundaments. You can get more information on Futures Trading here from our website or through the internet.
2. Set aside an initial capital outlay. Most broking firms will require a minimun of Sgd 5,000 to start a trading account which you can trade Futures, spot FX and spot gold & silver. However, due to the current market volatility, an initial outlay of Sgd 10,000 to sgd 20,000 will be more comfortable to start with. Make sure that these are excess funds that you can do without as this will affect your trading mindset.
3. Choose a broking firm to open account. Futures trades does not have a Central Depository like trading in shares, therefore you cannot trade initiate a trade with Broker A and square it through Broker B. Most local broking firms charge about Usd10-15 per lot. Although nowadays many interactive brokers, which allow you to open an account online, can charge lower but I would recommend you open a account with the local broking firms. As local broking firms are governed by MAS, clients’ funds are protected and segregated from the firm’s other funds. List of SGX clearing members.
4. Your trading account is maintained in the currency of your initial deposit, ie Sgd. However, the profits and losses as well as margin requirements, commissions are maintained in different currencies depending on your positions. Say, Nikkei is traded in Yen and HangSeng is traded in Hkd. The broking firms pays u interest on the credit balances of each currency (subjected to a minimum balance), but will also charge you on debit balances of the currencies. There is also an element of exchange rate risk when converting you profits / losses back to sgd.

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1. TheMidnightStar » How to invest in Gold? — February 23, 2009 @ 1:05 am

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