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SINGAPORE : As the economy grows, it seems more Singaporeans are developing an appetite for risk.
More retail investors are turning to forex trading to increase their returns.
In the last year, at least four new schools teaching the basics of forex trading have opened.
One of them, fx:1 Academy, has seen an enrolment of over 500 students since last July.
Its courses cost more than S$3,000 each for a few seminar style lectures, and coaching from a mentor for six months.
But the pricing has not deterred housewives, students, retirees and working adults from signing up.
Patrick Seow, a retail investor, is a student at fx:1 Academy.
He said: "Forex is actually a very fast market compared to stocks and shares, and you can actually profit within minutes in the forex market compared to conventional stocks and shares. Without proper education, you find that basically, whether it is investing in stocks and shares or in forex, it is going to be risky."
Ezen Ho, another student at fx:1 Academy, said: "Even though I had a finance background, I realised that it is very important to learn practical tips and strategies. So I've been trading for 5 to 6 months now and I've made consistently about 20 to 30 percent returns on my investment."
The growing demand for such courses suggest that Singaporeans are becoming more pro-active when it comes to their investments, and also wanting to diversify.
Traders say the main draw in forex is that the returns have been found to be uncorrelated or sometimes negatively correlated with the equity and bond market returns.
Still, analysts say forex comes with high risks.
David Forrester, Currency Strategist, Barclays Capital Forex Markets, said: "In any investments there are risks, but with forex, there can be sudden explosions of volatility and if you are not locked into the market, and not well informed, you can miss rather dramatic moves.
"We are not talking about just removing gains you have already made, it can result in stop losses and margins being hit, and you are actually losing quite a bit of money."
But with growing interest in forex, fx:1 Academy says it is poised to expand.
Benjamin Song, fx:1 Academy, said: "We already started a school in Malaysia, and we want to establish also in places like Indonesia, Vietnam, Taiwan, India as well as China, of course.
Japan has the world's largest number of retail investors in forex, and most of them are retirees. - CNA/ch
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