Formal Name: Republic of Singapore
Local Name: Singapore
Local Formal Name: Republic of Singapore
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Singapore and Systematic Trading
Singapore is one of the world’s premier financial centers and the primary gateway for institutional capital flowing into Southeast Asia. The Singapore Exchange (SGX) lists equity index futures, currency futures, and commodity derivatives that provide direct access to Asian market dynamics. The SGX MSCI Singapore Index futures, the USD/SGD currency pair, and the SGX iron ore futures are among the most actively traded instruments on the exchange, each connected to significant regional economic trends that systematic approaches capture.
Singapore’s position as a regional financial hub means the Singapore dollar reflects the aggregate of Southeast Asian economic conditions more broadly than any single national economy. The Monetary Authority of Singapore (MAS) conducts monetary policy through the exchange rate rather than interest rates, adjusting the SGD’s nominal effective exchange rate band against a basket of currencies. This policy mechanism produces the Singapore dollar’s distinctive trend characteristics: sustained directional moves during periods of MAS policy adjustment, and tight trading within the band during stable policy periods. The policy-driven nature of Singapore dollar trends makes them particularly systematic in their behavior.
The Barings Bank connection is Singapore-specific in an important way. Nick Leeson operated from Barings Futures (Singapore), and the inspectors’ report cited on TurtleTrader (“By 31 December 1994, cumulative losses stood at S$373.9 million”) was produced by the Inspectors of Barings Futures (Singapore) PTE LTD. The Nikkei 225 futures that Leeson traded were on the Osaka Securities Exchange, but the positions were managed through the Singapore operation. This historical connection places Singapore at the center of one of the most significant zero-sum trading events in financial history.
Singapore’s regulatory environment is among the most rigorous and transparent in Asia, making it the preferred domicile for regional hedge funds, commodity trading advisors, and systematic trading operations. The Monetary Authority of Singapore licenses and supervises fund managers, commodity trading advisors, and financial advisors under a comprehensive framework that provides investor protections comparable to major Western regulatory jurisdictions. For systematic trading practitioners who want to operate professionally in Asia, Singapore provides the combination of regulatory credibility, tax efficiency, and market access that makes it the regional hub of choice.
The 30-minutes-per-day implementation standard aligns naturally with Singapore’s SGT time zone. Major European and US futures markets close during Singapore’s evening and morning hours, making end-of-day systematic trading for global futures portfolios practical within standard Singapore business hours. Singapore’s position at the crossroads of Asian, European, and US trading sessions also provides practical advantages for practitioners who monitor positions across multiple time zones.
Frequently Asked Questions
What makes Singapore significant for global systematic traders?
Singapore hosts the SGX derivatives exchange with regional equity index, currency, and commodity futures; serves as the primary institutional capital gateway for Southeast Asia; and provides the regulatory and tax framework that makes it the preferred domicile for Asian systematic trading operations. The Singapore dollar’s exchange rate-based monetary policy produces systematic, policy-driven currency trends that complement the trend following approach.
What is the Barings Bank connection to Singapore?
Nick Leeson’s positions that destroyed Barings Bank were managed through Barings Futures (Singapore) PTE LTD. The inspectors’ report that documented the losses was produced by the Singapore Inspectors of the firm. Singapore-based clearing and settlement operations were the administrative location through which the Nikkei 225 futures positions that produced the $2.2 billion loss were managed, making Singapore central to the most documented zero-sum trading event in the systematic trading literature.
Why is Singapore a preferred domicile for systematic trading operations in Asia?
Because the Monetary Authority of Singapore provides a rigorous, transparent regulatory framework comparable to major Western jurisdictions, combined with a competitive tax environment, deep legal infrastructure, and proximity to all major Asian markets. Fund managers and commodity trading advisors operating in Asia consistently choose Singapore for its combination of regulatory credibility with institutional investors and operational efficiency for fund administration and compliance.
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