Five common mistakes made by new CFD traders in Singapore

Singapore is the 9th largest foreign exchange market in the world. Since its introduction to the Singapore Exchange (SGX) in 2004, financial derivative instruments have grown exponentially in both volume and value of transactions. 

A Financial Derivatives Industry survey conducted by SGX reveals that many investors are starting to move away from traditional stock exchanges towards online trading platforms – with up to 70% of traders using CFDs for their investments over the counter.

The CFD industry has faced some negative publicity due to a few high-profile cases involving fraudsters who illegally solicited clients through SMS messages or social media channels promising unrealistic returns on investment. There are also reports of inexperienced traders becoming victims of prominent fund managers who use their trading strategies to take advantage of small-time traders. 

As the saying goes, with significant risk comes great rewards – but before you go on to explore CFD trading as a career option or investment opportunity, make sure you are aware of common mistakes made by Singaporean CFDs traders. 

Do your research

Rising too quickly without market research is one of the biggest mistakes that investors can fall prey to at all levels. Don’t get ahead of yourself when entering the market with higher amounts than necessary because this increases your level of exposure. 

If an investor uses their entire portfolio to trade in multiple trades simultaneously, they are overexposing themselves and will be worse off if even just one trade is unsuccessful. Furthermore, it makes no sense to invest every cent you have into one trade with the hopes of doubling your capital. You may end up losing all of it.

Investing is not a sprint but rather a marathon, and you can’t expect to achieve overnight success without putting in hard work and careful consideration beforehand. Do your research – monitor the market trends and analyse records before making major investment decisions that may affect how much you stand to gain or lose.

Always trade safely when trading Singapore CFDs 

It’s easy to feel confident in your ability to pick good trades and make intelligent decisions when the investment starts going in your favour, but this is when people tend to get cocky and become overconfident in their abilities. Learn from others who have experienced reckless trading; if something feels too good to be true, it probably is.

Never invest more than you can afford 

Only use what you are prepared to lose and minimise your risk as much as possible. Then, stick to the plan! Do not let greed cloud your judgement and make impulsive decisions. This will put you at risk of enormous losses if trades turn south quickly. 

Never give up on a successful trade too early because you think that luck has turned against you – there’s no shame in cutting your losses rather than allowing an unworthy trade to continue taking bites out of your capital until nothing remains. After all, there is always another chance for a comeback given enough time.

Singapore CFD traders should also consider investing in financial education. 

Investing in education is an excellent way to learn more about the trading market and become a much better investor in general. There are numerous online resources, from free seminars to paid webinars, which can teach you the basics of trading, no matter your level of experience. 

Financial education is essential for investors who wish to make intelligent decisions with their money because it allows them to recognise market trends and understand how financial instruments work. This will help you avoid making common mistakes in future investments.


Remember, there will always be another opportunity around the corner if you are unwilling to risk your entire portfolio. If this sounds like a challenge or you think it’s too much work, trading is not for you: stick with what you know and enjoy doing instead of wasting time on something that does not add to your personal or professional growth. New traders interested in investing in forex are advised to use a reputable Saxo CFD broker before starting their investment journey.