How to use DBS FX Rates to your advantage?
The foreign exchange may seem difficult at first, but it doesn’t have to be like that always. It is exchanging the amount of your Singaporean dollars to another currency. The amount you will be receiving will be dependent on the exchange rate.
Forex markets are one of the biggest financial markets. And it reaches a worldwide audience through finance, business, and trading.
DBS Bank made exchanging foreign currencies very easy through their online forex services. Holders can access it on their website and mobile banking app.
How can YOU take advantage of this info? Read up and find out.
Table of Contents
Know the Advantages and Disadvantages of Forex Market
It is crucial to get a good grasp of the foreign exchange market before doing any trading. Of course, one can be trading for practical reasons. But most of the traders’ reason would be to earn profit. But it can also turn the other way around.
Advantages of Forex Market
It has a low transaction cost.
The forex market has low transactions fees as compared to other markets. It is because there are fewer variations or spreads compared to other markets.
What are spreads? They are the differences between the value of the buying and the selling currencies. It’s the way of earning profit in foreign exchange.
For example, compare prices at a local money exchange outlet with the forex outlet at the airport. As you can notice, the differences are almost unnoticeable. It is because the value differs in the tenth or hundredth decimal place.
But note that the market has small spreads. That’s because of brokers who offer the currency exchange. As a result, they have minimal transaction fees or no extra fees.
The volatility of rates.
Another reason why you should start with a foreign exchange would be its volatility.
Volatility is either high or low. It is a measure of how drastic prices changes are in the market.
High volatility means that the prices can change in an instant. And most of the assets are non-liquid- the term for how easy a particular item converts to cash. Examples would be stock markets and cryptocurrencies.
Low volatility on the market means that prices are stable. They don’t change that fast, and if there are changes, they are minimal.
You can experience these activities in the foreign exchange market. Use this knowledge to your advantage. It will help you decide when to buy and sell currencies at all times.
It’s 24/5 open hours.
One can trade in the market for 24 hours a day and five times a week. Thus, it’s one great opportunity to plan when you want to trade. And it gives you a lot of time to plan your trading strategies.
Other markets open and close at a specific time. And it can be challenging to adjust your schedule to accommodate the said schedule.
Disadvantages of Forex Market
High leverage
Leverage can be both a dream and a nightmare for a trader. It can give you lots of profit but the downside of that it can also provide a loss.
Leverage is a loan provided by the broker which you can use to buy currencies and multiply your capital. The usual leverage is in the form of a ratio.
Examples would be 1:50, 1:100, and up to 1:500. They offer them based on the experience of the trader and their previous portfolio.
Beginners are prone to making these mistakes, so before using leverage. But, first, make sure you have a better understanding of the risk to mitigate its effects.
Price Determination Process
One may ask how to determine the currency’s price. It involves many multi-layered reasons. It could include the current politics, global concerns, and many more. There’s a lot to consider for the pricing when you trade in forex exchange. And analysing this chunk of information can be difficult.
International politics and the economy affect the forex market through price changes. Because of this uncertainty, traders would use technical analysis instead to forecast prices.
Self-directed learning
One of the biggest challenges of a beginner in this field is having little help or no support. Being self-directed can lead to many mistakes. That is due to a lack of training and limited foreign exchange knowledge.
It may dishearten beginners and make them quit. Be disciplined, and don’t stop striving for effective self-learning.
Get Started With Creating An Account
Now that you get acquainted with the Forex market, you can start looking for avenues to trade. DBS Bank offers an experience on foreign exchange that is convenient and very easy to access.
Open a DBS Multi-Currency Account
To open an account for a DBS Multi-Currency Account, download the DBS digibank app. If you have a Singpass, you can open an account fast.
If you don’t have a Singpass, you can check on DBS’ site for documents needed for the application. Once you’ve created an account, you’re all set for your first transaction.
There are no age restrictions and also no initial deposit required. Also, there will be no foreign exchange conversion fees when using the card.
You’ll get notifications when there are changes on DBS forex rates. It’s an alert feature that can help you get updates on the latest trends.
Transfer Forex Using DBS digibank Mobile App
You can now transfer forex using your account on DBS Bank. One of the methods would be using the digibank Mobile.
Here are the steps to navigate the app. Login to your account using the security feature you set up, or use your USER ID and PIN to log in instead.
Choose Invest Tab, then go to FX. The page will show two currencies: the currency your selling and the currency your buying.
Enter the amount of the currency you’re selling. Next, select the preferred settlement date. It can be today, tomorrow or the day after tomorrow.
Select Review Details, then verify if the information is correct. Once reviewed, click Submit. Take note that currencies can change in value, and you visit this link to check the current DBS forex.
Trade using DBS Digibank
Foreign exchange trades here from 7:00 AM to 5:00 AM the next day. So you can trade from Monday to Friday. Only note that the daily cut off for the same day trade would at 5:00 PM.
The least amount for a trade would be SGD 100 or equal to other currencies. After that, you can trade up to the maxed amount, SGD 500,000.
To start trade in digibank is almost as easy as accessing the DBS digibank Mobile App.
Log in first using your USER ID and Pin. Then, navigate the Menu bar, choose Invest and select Foreign Exchange. Next, choose from the nine available currencies to buy and sell.
The nine currencies available are the following:
- Australian Dollar
- Canadian Dollar
- Chinese Yuan
- Euro
- British Pound
- Japanese Yen
- U.S. Dollar
- Singaporean Dollar
It’s better to familiarise yourself with how to trade on DBS Forex on their two platforms. Then, afterwards, you’re ready for the next step.
Create strategy from research and experience
To be a successful trader, you have to develop a winning strategy that takes time to perfect. Here are three things to consider when making your strategy.
Supply and Demand
One has to understand how the concept of supply and demand affects the currency market.
The value of dollars increases when there is a shortage in money circulation. So, the value decreases when there are too many dollars circulating.
What currencies are currently in demand and surplus? Which currencies do you think will increase in value in the future?
Take note of these things when creating your strategy.
Current DBS foreign exchange rate vs Past rates
Make a list of trades you have already done. Take note of changes in the trading currency values from the past to your most current.
Were you able to make a profit? or was it a loss? Each experience in trading will help you track your transactions.
Create a forecast from the past data you have from your transactions. And also your findings on supply and demand.
The Perfect Timing
Now that you have done your research, it’s time to wait for the timing. Then, take advantage of watching different rates values.
By doing this, you may be able to locate a reasonable exchange rate. Then, buy the currency when the value is lower and sell when the exchange rate looks more promising.
A diversified strategy is one way to spread your risk in a low growth phase. It’s a low-interest-rate environment.
Consider DBS forex rates, among others.
Other than turning on the push notification, you won’t need to do anything else. DBS forex rates are very convenient to view on their platform.
Zero fees on the same day transfers set apart DBS bank from others. Moreover, online transfers to the countries on their list have no transfer fees as well.
You can set a preferred rate through lock-ins. Auto foreign exchange transfers are also possible for amounts about SGD 1000.
Do you need funding?
Extra funding always comes in handy since the perfect opportunity may come. But this opportunity may come to pass if you don’t grab it.
Aside from banks, you can get help from a licensed moneylender in Singapore. When you find that perfect exchange rate, they can fund your needs right away.
Money lending entities offer various instant cash loans which you can use to do trading. Like banks, moneylenders have proven themselves by being in the industry for a long time. And they guarantee quality products and services to their consumers.