There is a type of personality that is drawn to short-term trading, and Singapore is not short of such players, whose attention is held by the speed and immediacy of intraday and swing strategies. It is not only an appeal to money. It involves a genuine intellectual engagement in reading price action, developing a thesis and watching it play out over hours or days, something longer-term investing rarely provides. For traders who find that interaction genuinely motivating rather than draining, short-term strategies can produce the sort of sustained focus that good performance demands.
Trading plans built around specific session opens have grown popular among Singapore traders who have found that the initial hour of each major market session tends to generate directional moves that are clear enough to trade against a pre-established plan. The London open is especially appealing because it occurs at the beginning of the evening hours when Singapore traders are still working, and it does not need any discontinuing changes to the schedule. The people who have acquired the behavioral pattern of that session have constructed entry structures on which they are taking advantage of the volatility at the start before the situation stabilizes to the routine of the session.
News trading is a popular pursuit within the Singapore short-term trading community. Sharp and rapid movements around significant economic releases are common, but there is also the risk of being on the wrong side of a gap that blows through stop levels. Traders who excel at this strategy tend to be less focused on the direction of the release and more on how the market is going to react to it, waiting for the initial move to settle before entering in the direction of confirmed momentum, rather than attempting to predict the market reaction before the number is released.
The structure of CFD trading is well suited to short-term strategies since it is possible to open and close positions in a single session without the challenges of holding positions overnight. Overnight financing charges do not apply to intraday positions and the leverage these instruments provide magnifies the returns on comparatively small price changes characteristic of the short-term trading of liquid markets. A one percent shift in a key index, unremarkable to a long-term investor, constitutes a significant gain when one is holding a leveraged intraday position which is sized based on a systematic risk model.
Scalping strategies, involving extremely small price movements across multiple trades within a session, demand platform characteristics not available across all brokers in the Singapore retail market. The speed of execution, consistency of the spread, and lack of requotes in a high-volume fast market are factors of critical concern to a strategy in which the profitability of the strategy is based on the ability to capture thin margins on a repeated basis. Traders taking this strategy seriously scrutinize broker infrastructure far more carefully than those whose strategies are less sensitive to execution quality, and platform differences become most visible under the conditions that scalping strategies stress most.
Short term risk management works on a tight time line where the responses made are more disciplined and fast than those demanded by long term risk management. A position moving against a swing trader has hours or days in which to recover or confirm the thesis. An intraday position moving in the wrong direction needs an assessment in minutes. Singapore traders who have developed the ability to make such quick decisions consistently, cutting losses without hesitation when the setup has clearly failed, while giving valid trades room to develop, regard that skill as one of the most difficult to develop and one of the most significant to overall performance.
The accumulated impact of the transaction costs is of special concern to short-term strategies in which the amount of trades is large. What may seem to be insignificant on each individual trade becomes a major drag when it is multiplied by dozens of positions in a week. Singapore traders who pursue short-term CFD trading calculate their break-even spread cost before committing to a strategy such that their perceived edge is large enough to withstand the drag of frequent trading and be able to generate net positive returns on a significant sample of trades.
