Compare Forex Trading Brokers in Malaysia

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Cost of Trading

Total trading cost at the time of last update, for 1 lot of EUR/USD using the account with the lowest minimum deposit. Includes spread and commission.


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How Do I Trade Forex In Malaysia?

There are several things to consider before you start trading Forex in Malaysia:

  1. Have you picked a good, well-regulated broker?
  2. Do you understand the market well enough to trade Forex successfully?
  3. Do you have a strong trading plan?
  4. Do you have the discipline to carry out your trading plan

At Forex Malaysia, we will help you answer all these questions by comparing, reviewing and rankings brokers. To read more about our methodology, and how we rate Forex brokers, read all about our review process here. Below is a brief overview of how we compare brokers.

How do I pick a good broker?

To pick a good broker in Malaysia we need to look at a few factors:

  • Regulation: It’s absolutely critical to always trade with a well-regulated broker. Malaysian’s can trade with any internationally regulated broker, but for added security, you may want to trade with a broker who holds a license from the Securities Commission of Malaysia (SCM) or the Labuan Financial Services Authority (LFSA). Apart from the SCM and LFSA, the three best regulatory agencies are the FCA, CySEC and ASIC. Be wary of brokers who are only regulated by small island states (the Cayman Islands, Bahamas, Seychelles, etc) or those who aren’t regulated at all.
  • Islamic Account: All SCM/LFSA regulated brokers and most international brokers in the Malaysian market offer an Islamic (swap-free) account, but it is important to check first before you sign up.
  • Broker Type: Do you want a market-maker broker or an ECN broker? Market maker brokers tend to have wider spreads but don’t charge a commission on trades, while ECN brokers have tighter spreads but will charge a commission on every trade. Some brokers will provide both services on different account types, with the ECN services generally reserved for accounts with higher minimum deposits.
  • Trading Conditions: Make sure you understand exactly what spreads your broker offers, how much leverage they will give you and how many currency pairs they offer for trading. You don’t want to sign up a to a broker only to discover that the spread on your favourite currency pair is much wider than its competitors.
  • Trading Platform: Many brokers offer their own trading platforms these days, but MetaTrader 4 is still the industry standard and can move with you if you decide to change broker. Other good standalone platforms are MetaTrader 5 (which is slowly gaining in popularity) and cTrader.
  • Minimum Deposit: This is about how much you can afford to deposit with your broker. Generally, accounts with higher minimum deposits have better trading conditions but it is worth shopping around to find a good balance.
  • Deposit and Withdrawal Methods: All brokers will accept bank transfers and credit or debit cards. Most will also accept online payment systems such as Skrill or Neteller and some will also accept cryptocurrency.

Is Forex trading legal in Malaysia?

The Malaysian government, through the Securities Commission, has done a lot to safeguard the interference of the Ringgit (MYR), while at the same time ensuring that the safety of their citizens who wish to participate in Forex trading is not compromised.  Trading Forex is legal in Malaysia as long as you abide by the set laws and regulations that are put in place by the government and the other regulating bodies.  In short, if a major regulator regulates your broker, you will be fine using this broker.

Choose the Right Broker For You

Best Forex Brokers in Malaysia

When comparing brokers we look at group regulation, trading conditions, bonuses, platform support and reputation. Here are the best Forex brokers in Malaysia, compared and reviewed. 

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Best Forex Demo Accounts Malaysia 2020

Compare the best demo accounts available in Malaysia. Learn what sets them apart and find the best broker for you.

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Best Forex Bonus in Malaysia

A new account bonus is offered by almost every broker on the market. They have a number of conditions, but a good gift for a beginner when opening their first account.

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Islamic Accounts

Compare the best accounts at Sharia-compliant Forex brokers for 2020. Learn what sets them apart and find the best one for you.

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What is Forex Trading?

Forex trading is the exchange of currencies to make a profit from fluctuations in the exchange rate. In Forex trading, currencies are traded in pairs: As you sell one currency, you are buying another.  The first currency in the currency pair is known as the base currency, while the second currency is known as the quote currency. To open a trade, a trader must choose a currency pair, and the direction they expect the exchange rate to move. As the exchange rate between the two currencies changes, the trader can close the trade for a profit or a loss.

As an example, the price of the Euro and United States Dollar currency pair (EURUSD) is 0.8100; meaning that 1 EUR can purchase 0.8100 USD.  In this example, the base currency is the Euro, while the quote currency is the US Dollar. If you buy the EURUSD you are effectively buying the EUR and selling the USD at the same time. When you close your position, you are selling the EUR that you had bought and buying back the USD. If the EUR has strengthened against the USD in that time, you will have made a profit – as you will now be able to afford more USD than you originally sold. More detailed information on how Forex trading works is here.

Novice traders should begin with a limited number of pairs, so choosing which Forex pairs to trade, and which to avoid, is important to know from the start.

What is the difference between trading Forex and trading shares?

People often mistakenly equate Forex trading with trading shares on a stock market. Forex trading differs from investing in stocks in several ways:

  • Currencies are traded in pairs, whereas equities are physical shares that are purchased for cash.
  • The Forex market is a decentralised over-the-counter exchange, where all transactions and participants are confidential, unlike stock markets, which are centralised and where public records are kept of buyers and sellers.
  • Forex trading has a low cost of entry. In order to make substantial profits, equity traders use large amounts of capital, not an option for investors with limited incomes.

Forex trading is not investing as traders never take ownership of the asset being transacted. With CFD Forex trading, the trader is speculating on the future value of the assets involved in the trade. 

How do you trade Forex?

A broker is the only way for individuals (known as retail traders) to access the Forex market. Depending on how a Forex broker is set up, they will either maintain the market (market maker) or offer a direct connection to the international market (direct market access). Either way, a trader will need to create an account at a broker to get started.

Forex trading is usually executed via a product called a Contract for Difference (CFD) with your broker. This is a contract between you and your broker to pay any difference in the price of the two currencies between opening and closing your trade. This is very useful, as it means that neither you nor your broker holds any currency.

Trading Forex and CFDs is not suitable for everyone and comes with a high risk of losing money rapidly due to leverage. 60-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

What is Leverage?

CFD Forex trading is generally leveraged; this means that the trader only contributes a small amount of the trade value and borrows the remainder from a liquidity provider (often large financial institutions or banks that work with your broker).

This has two effects: First, the cost of entry to Forex trading remains low. Second, all profits and all losses are amplified. Traders are responsible for the losses of the full trading amount. Some brokers will offer negative balance protection, so you can never lose more than your account balance, but some do not – be careful that you don’t end up owing your broker money.

How do beginners learn to trade Forex?

Beginners are strongly advised to learn to trade using a demo account before depositing money into an account. Read through our education section for tips on Forex charts, trading platforms and how to read the spread – these are all important things to understand before you start trading with a live account.

Most brokers will offer at least some trading education – take advantage of this. The best brokers will have well-structured courses in both video and ebook format and will also offer webinars and seminars on more advanced topics. Learn as much as you can, as fast as you can, as the more you understand, the more comfortable you will feel in different trading scenarios. As you learn, practise your new skills with your demo account to test your progress. 

It will take some time and persistence to learn how to trade CFDs successfully, as traders need to study the many aspects and strategies to make trades more successful.

How to choose the best Forex strategy?

There are many different Forex trading strategies and you will not find success by using just one. The best trading plan will involve a number of strategies, all working in together in tandem.

At the most basic level, Forex trading strategy will rely on either fundamental analysis (analysing broader economic trends and geopolitical events – i.e. Brexit and it’s effect on the GBPUSD or the release of the US non-farm payrolls and it’s effect on the EURUSD) or technical analysis (analysing historical price action on charts). Technical analysis, in particular, is a large topic of study and there are many strategies that rely on it in various ways.

Other factors to consider when planning a Forex strategy are the time of day (in Malaysia, most of the daylight hours will coincide with Japanese market hours, but the highest market volatility occurs in the New York/London market crossover period), order types (such as a trailing stop loss – possibly the single most valuable part of any strategy) and automated trading software/bots (which can see movements in the market that you may miss).

For more detail on analysis and how to use it, we cover strategies and building a trading plan in our learn to trade section.

How much do I need to start trading Forex?

Trading accounts can be opened for as little as 5 USD, but a recommended deposit is between 200 USD to 500 USD. A minimum 200 USD deposit is advised because your account balance will determine how much leverage you can use.

When you place a leveraged trade, your contribution is called the margin – depending on the leverage you have on your account this could 1% (with 100:1 leverage) or 0.5% (200:1 leverage) or even 0.25% (400:1 leverage). Your margin is your initial trading cost but your broker may also charge a commission per trade or other fees (such as a deposit fee if you use a credit card or bank wire).

The main cost of CFD trading is the spread. This is the difference between the buy and sell prices of a currency pair and is the broker’s fee for placing the trade. The spread is measured in pips (the smallest price move a currency can make). If the sell, or bid, price for GBP/USD is 1.22415 your broker may set the buy, or ask, price at GBP/USD at 1.22424 – a 9 pip difference – and the spread will be 0.9. The tighter the spread, the lower your costs will be.

Going Short or Going Long?

There are two kinds of trades you can make – short or long.  This is unique to CFD trading and is only possible because Forex traders are only speculating on price instead of taking ownership of an asset.

Taking a short position is selling a currency pair, you are predicting that the exchange rate will decrease. However, if a trader speculates that the exchange rate will rise, then they would buy the currency pair by placing a buy order or opening a long position.

How to Choose A Forex Trading Platform

The top Forex brokers support a variety of trading platforms, have faster trade execution, and have good training, webinar and onboarding resources.

When choosing a trading platform, you need to consider if you want to use a third-party trading platform that can move with you between brokers, or if you want to use a broker-specific platform, many of which are more user-friendly.

MetaTrader 4, MetaTrader 5 (MT4/MT5) and cTrader are examples of third-party platforms that are widely supported by the industry, these platforms allow traders to move between brokers when looking for better trading conditions or different products and services.

On the other hand, brokers like eToro have a proprietary platform as they have functionality that is unique to their business, but by using a broker’s proprietary platform you will be at a disadvantage if you do decide to switch broker at a later date.

Is Forex Trading Risky?

Forex trading is a high-risk activity and most traders will lose money – the best way to avoid being one of the losers is to develop a good trading strategy and have a good understanding of risk management in forex trading

The principal risks of trading:

  • Risk 1: The Forex market is extremely volatile at times. It is because of this volatility that we can profit from trades. But the market can move very swiftly, and this can mean a trade can go against you very quickly. If you are trading, you must watch your trades constantly or set automated safeguards to protect your money.
  • Risk 2: The Forex market is not something you can predict. There are just too many factors and actors in the market for it to be fully predictable. Traders need to set a win-loss target ratio where you account for some losses and use a strategy to minimise them.
  • Risk 3: CFD trading requires using leverage. Leverage is a tool used in trading to amplify your profits, but it also amplifies your losses which are automatically deducted from your trading account. Your account balance can be wiped out with a single bad trade.
  • Risk 4: In some cases, interest can be charged on your trades. For example, interest can be charged when you carry trades overnight where a tom-next adjustment is applied, and this could mean that your broker will take funds from your account to pay this fee.

Do I have the discipline to carry out my trading plan?

This is the most difficult question to answer, and you will only be able to answer it once you start trading with a live account. Trading with a demo account will never be able to create the same sense of fear and nervousness that occurs with live trading – preventing your negative emotions from affecting your trading plan is the true test of all Forex traders.

Successfully carrying out a trading plan is a test of your psychological strength and it is where many traders fail. You will need caution, decisiveness, discipline and intelligence in order to succeed. But if you are well-prepared, well-educated and have a good broker you already have the advantage.

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Forex Malaysia is a reader-supported magazine. When you sign up for an account through our links, we sometimes earn a commission, which enables us to continue making our website better for you.

Our goal is to create high-quality, factually correct, and meaningful educational content that furthers our readers interest in trading and education. It is free from commercial bias, conflict of interest and as accurate as our writers are able. To read more about our methodology, and how we rate Forex brokers, read all about our review process here.

To read more about who we are, how to contact us, and how we work, read our about us page.

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Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.