At this time of year, the financial media frequently publishes articles outlining possible market scenarios for retail traders. While markets continue to be unpredictable, one of the lenses that can be applied to exploring 2023 is how retail traders' motivations and behaviours have changed.
The '2022 Singapore Leverage Trading Report' by Investment Trends - a market leading global financial services industry research company - was released at the end of October, uncovering insights on the current state of the online retail trading market in Singapore.
Here’s how we see these findings shedding a light on trends unfolding in 2023:
- In line with global trends, CFD/FX trader numbers in Singapore have eased in 2022 after five consecutive years of growth. Inflows of new-to-market and reactivated traders were lower than the previous two years but remained higher than the pre-pandemic era.
This suggests that building relationships with clients will become ever more key, and further focuses OANDA's efforts on developing a best-in-class online trading experience as well as supporting traders with a dedicated Client Relationship service. It also emphasizes the importance of offering advanced analytical tools to help clients identify and seize opportunities in the market.
- The report revealed that new traders are most often motivated by a desire to learn a new skill (44%).The 2022 cohort of new traders is more likely to have been prompted by market volatility (23%, versus 18% the previous year). Most of those who intend to start trading CFDs are current users of listed securities or crypto. They mention risk management tools (30%) as one of the top factors to encourage them to start trading.
This points to the crucial role played by education and access to insights in enabling new traders to trade at their best. Phil Waters, CEO of OANDA Asia Pacific, said, “New traders also need to learn how to navigate volatile markets with a clear focus, and make decisions based on calculated research and observation. This is where effective risk management becomes an essential element of smarter trading. OANDA’s tools give active traders more control through Guaranteed Stop Loss Orders (GSLOs) and Stop Loss Orders (SLOs) - in fact, we are one of the few MAS-regulated brokers who provide margin relief on both of these."
- Three distinct segments of Singaporean leverage traders arose in 2022: ‘mobile-light traders’ (50%), ‘multi-device traders’ (20%) and ‘mobile-heavy traders’ (30%). The ‘mobile heavy’ segment appears to have been the most actively involved in trading.
We see a shift from web platforms to mobile apps, and this trend will only continue as traders want the ability to trade at their fingertips. The convenience of mobile trading doesn't have to come at the expense of sophistication: trading on the go with OANDA means clients can access more than 50 technical tools, including 32 overlay indicators, 11 drawing tools and 9 chart types with our apps for iOS and Android.
- According to Investment Trends, the top three features driving selection for a CFD/FX provider remain platform ease of use (46%), mobile app (42%) and regulation by the MAS (37%). A higher proportion of traders now consider competitive spreads (30%, versus 25% the year before).
- Lastly, one in two Singaporean traders (52%) have used multiple brokers over the past 12 months. Compared to a year ago, a greater proportion of traders using multiple brokers mention the mobile experience or platform ease of use as reasons for doing so.
Further commenting on the report, Phil Waters said, “The findings above show how convenience, trust and value are very much front of mind for traders at the start of 2023. In a market that is increasingly competitive, providing a multi-asset offering on intuitive trading platforms will prove to be a key component of success."
Traders partnering with OANDA join forces with a globally regulated, trusted broker with an award winning platform and competitive pricing on indices, forex, commodities, and metals CFDs. Recognised for its excellence, OANDA was awarded ‘Best forex and CFD broker’ and ‘Most popular broker’ by the TradingView community for 2021 and #1 Broker in Singapore for customer satisfaction by Investment Trends two years running in 2022 and 2021.
Founded in 1996, OANDA was the first company to share exchange rate data free of charge on the Internet, launching an FX trading platform that helped pioneer the development of web-based currency trading five years later. Today, the OANDA group, which includes OANDA Asia Pacific and other subsidiaries of OANDA Global Corporation, provides online multi-asset trading, currency data and analytics to retail and corporate clients around the globe, demonstrating an unrivaled expertise in foreign exchange. With regulated entities in nine of the world’s most active financial markets, OANDA remains dedicated to transforming how the world interacts with trading, enabling clients to trade global market indices, commodities, treasuries, precious metals and currencies on one of the fastest trading platforms in the market.
For more information, please visit oanda.com.
About the report
In its thirteenth annual edition, the 2022 Singapore Leverage Trading Report by Investment Trends provides a detailed analysis of the trading attitudes, behaviours and needs of Singaporean traders of leveraged financial products. It is the largest study of retail investors in Singapore each year. This year’s report was based on an online survey of 2,451 responses from Singaporean investors and traders, concluding in September 2022.
About Investment Trends
Investment Trends is the leading researcher in the retail online share dealing and leveraged trading markets globally. We combine our analytical rigour and strategic thinking with the most advanced research and statistical techniques to help our clients gain competitive advantage. We have over 10 years’ experience in researching the retail wealth management and global broking markets from which we provide new insights and decision-making support to over 200 leading financial service businesses globally. Investment Trends’ clients include a number of global banking organisations, all major online brokers and CFD providers as well as industry regulators, investment platform providers, industry associations and financial planning software providers. www.investmenttrends.com
OANDA Asia Pacific Pte. Ltd. is licensed by the Monetary Authority of Singapore to conduct the regulated activity of dealing in capital markets products that are over-the-counter derivatives contracts. Leveraged trading carries a high degree of risk and may not be suitable for everyone. Losses can exceed deposits. This advertisement has not been reviewed by the Monetary Authority of Singapore.