When you are trading in a non-SGD account (e.g. EURUSD is traded in USD), you should be aware of the need to hedge.
So what is hedging?

Let’s say you placed an order for some goods from the US, to be delivered at a future date.
Your order comes to USD 1,000,000 at the time of order.
You pay USD250,000 up front.
The balance of USD 750,000 to be paid in 12 months’ time upon delivery of goods.

At the time of your order, the exchange rate for USDSGD is 1.4200, so:
• You paid up-front (USD 250,000 x 1.4200) = SGD 355.000
• Balance to be paid (USD 750,000 x 1.4200) = SGD 1,065,000
• The total cost of goods is SGD 1,420,000

One year later, when the goods are to to be delivered and the balance paid, the exchange rate is 1.5550.

So now, your balance of USD 750,000 becomes (USD 750,000 x 1.5550) = SGD 1,166,250
Instead of SGD 1,420,000 for the goods, you now pay:
(SGD 335,000 + SGD 1,166,250) = SGD 1,501,250

Which means you have to pay an additional (SGD 1,501,250 – SGD 1,420,000 = SGD 81,250

Hedging Strategy

Order Total: USD 1,000,000
Paid Up-front: USD 250,000
Balance: USD 750,000 — this amount is at risk!

Buy USD 750,000 at the point of the up-front payment
Sell USD 750,000 at the point of taking delivery (and payment of the balance)

Based on the exchange rate given above, you USD forex purchase would have made a profit of around $81,250 – which makes up the the extra SGD you have to pay.

On the other hand, if the exchange rate went down, you would have made a loss on your USD forex purchase, but you also have to pay less in SGD for the balance of USD 750,000.

This is called hedging.