Top Malaysian Forex Brokers

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Trading conditions:

FXTM

FXTM is an award-winning broker offering both ECN and dealing-desk accounts. Support is provided for both MetaTrader platforms and expert advisors and scalping are permitted. Oversight comes from CySEC and the FCA (amongst others) and trading conditions are excellent, with tight spreads and leverage up to 1:1000 (depending on country of residence and trading experience). For the beginner, free education and webinars are available and technical analysis and signals are free once you have registered.

Trading conditions:

Alpari

Alpari has some of the best trading conditions in the industry across two standard accounts and two ECN accounts. With a tiny minimum deposit on the micro account and an excellent ECN Pro account for professionals, Alpari is a broker for every trader. This is backed up by responsive customer service open seven days a week and support for the industry-leading MT4 and MT5 platforms. The only downside to Alpari is the brief education section and lack of market analysis.

Trading conditions:

eToro

eToro pioneered social trading in 2012 and has been widely recognised for making the social trading experience as smooth and engaging as possible. 

Customers will not find a large amount of market research or education; spreads are wider than most other brokers and fees are high, but if you are looking for a fun and simple social trading experience then eToro is the best.

Trading conditions:

AvaTrade

AvaTrade is one of the most reputable brokers in the world with leading trading platforms, and account types and educational material.  AvaTrade has built a brand on a solid reputation and continues to please new customers as they join this brokerage.  AvaTrade offers trading in commodities, cryptocurrencies, forex, exchange-traded funds, options, bonds, and equities.  AvaTrade is a good choice for any type of forex trader ranging from beginners to scalpers and intraday traders to long-term traders.

Trading conditions:

HotForex

HotForex is an award-winning, global broker and has a reputation for client satisfaction. 

Trading conditions are varied across four account types, but spreads are generally tight (and are often zero pips on the market execution account). All accounts are also available as Islamic accounts, and HotForex also offers copy-trading and managed accounts.  All clients have a dedicated account manager, and deposits and withdrawals are free no matter the funding method.

HotForex has managed to attract a broad-based global clientele by offering multiple language capabilities and has a dedicated Malaysian team.

Trading conditions:

XM

XM Group (XM) is a full dealing desk broker which offers floating spreads and suits all kinds of traders.  XM offers swap-free Islamic accounts as well as a variety of other account types to suit traders.  It is a perfect broker for scalpers, intraday traders as well as long-term traders because of the tight spreads, fast execution times and good analysis software.  XM has a low minimum deposit making this broker accessible for traders just starting out.

Trading conditions:

Markets.com

Markets.com is a leading global brand in Forex trading online. Established in 2008, Markets.com has created a competitive market-maker product that is popular with traders and has won them International industry awards for their trading product and customer service. With a competitive account offering and a recently-extended range of trading platforms supported, Markets.com continues to grow their client base past 5 million registered accounts.

Trading conditions:

easyMarkets

easyMarkets exceeds the general needs of traders by providing strong basic services expected from a broker while working to innovate to meet the greater expectations of the client base.  With simple account types, a strong variety of platforms to support traders, a good introduction package waiting for beginner traders, and exceptional attention put to the needs of professional traders, easyMarkets makes the list of one of our favourite brokers to recommend to Malaysian clients.

Trading conditions:

GKFX Prime

GKFX is a young and distinguished broker on the Asian market winning many of the most respected industry awards - the first coming only a year after their launch.  They offer massive leverage of up to 1:1000, no minimum deposits for new traders and a big focus on integrity and quality service to their clients.

Trading conditions:

FBS

FBS stands out in the Asian forex trading market which is clear by the number of accolades which this broker has won thanks to its high standard services.  FBS is the holder of the Best Customer Service Broker Asia 2016 as well as the Highly Recommended Broker Insurance of the Year in Indonesia. In 2012, FBS emerged as the fastest growing broker in all of Asia.  FBS offers its customers, great account options, bonuses, trading on more than 46 instruments total.  There are 4 cryptocurrencies, 3 CFDs, 4 metals, 35 forex pairs.

Trading conditions:

HYCM

HYCM has over 40 years of experience in Forex trading, FCA regulation, and delivers a comprehensive market education suite to all traders.  With attractive fixed spreads that are due to drop even further in the coming months, the best software options for trading and attractive bonuses, this broker is one to consider. 

Trading conditions:

Pepperstone

Pepperstone is well-regulated Forex broker suitable for anyone who wants an STP account with a reputable ASIC-regulated broker.  The spreads are tight, and the account minimum deposits are reasonable for the standard trader.  If you wish to have a VIP account of a Micro account, Pepperstone is not for you.  Besides, I got tripped up by the negative balance protection, which does allow for losses great than your account balance - so making it not real negative balance protection.

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Forex Trading in Malaysia

Forex trading in Malaysia is increasingly popular but many people are still concerned about the regulatory environment and the legality of the industry.

As far as regulation of Forex brokers is concerned, the Malaysian regulatory setup is in its infancy and hampered by decades of paranoia over the strength of the Ringgit. There is still some confusion over who is the actual regulatory authority for Forex brokers: The Bank Negara Malaysia is responsible for the Ringgit, while the Securities Commission of Malaysia oversees and licenses financial companies – but neither company holds responsibility for regulating Forex brokers.

To add further confusion, many Forex brokers operating in Malaysia are regulated by the Labuan Financial Services Authority (LFSA), the regulatory body for the Labuan International Business and Financial Centre (LIBFC). The LIBFC, based on the island of Labuan off the Borneo coast, was created in 1990 by the Malaysian government as a free trade zone and financial centre. Labuan is widely seen as a business-friendly environment, anchored by a simple and attractive tax system and the LFSA has a robust, modern and internationally recognised legal framework.

In reality, most Forex brokers operating in Malaysia remain regulated offshore. It is easier to comply with local regulations by saying that retail Forex trading with an offshore brokerage is considered foreign investment. Since most Forex trading in Malaysia does not involve the Ringgit, the regulatory agencies tend to ignore the vast majority of Forex brokers and traders in the country.

As long as you are not physically exchanging the Ringgit for foreign currency, or asking others to do the same through your business, the Malaysian regulatory agencies will not get involved.

This lack of local regulatory oversight leads to another problem though: there are many Forex brokers operating in Malaysia that are poorly regulated, or not regulated at all, and many of these are fraudulent. Therefore, it is important to make sure that any broker you choose to work with is regulated by one of the major international regulatory bodies (such as ASIC, CySec or the FCA).

Choosing a Forex Broker in Malaysia

You should always choose a Forex broker carefully to ensure that you get one that suits you best. We are going to look at the various factors you need to consider before choosing a broker, these are:

  • Regulation
  • Type of Broker
  • Trading Accounts
  • Demo Account
  • Spreads
  • Leverage
  • Trading Tools
  • Customer Service
  • Bonuses

Regulation

As mentioned previously, regulation is critical and the first thing to look for when choosing a broker is how well-regulated they are; this will determine how well protected you are as a customer. Before you start trading make sure that your broker is well regulated and considered safe by the wider Forex trading community. We never review a broker that we consider unsafe or untrustworthy and will always highlight where and how they are regulated.

Types of Forex Brokers

There are two distinct business models for Forex brokers, and they mean a very different trading experience for customers.

Brokers can generally be separated into two major categories:

  • Dealing Desk Brokers (DD) or Market Makers;
  • Non-Dealing Desk Brokers (NDD) which can be divided into two categories:
    • Electronic Communication Network (ECN);
    • Electronic Communication Network/Straight Through Processing (ECN/STP);

Different Types of Forex Brokers

Dealing Desk Brokers

Dealing Desk Brokers, also called market makers, are brokers who set their own price rates for currency transactions. In essence, a dealing desk broker will always be the counterparty to your trade. This means that all dealing desk brokers trade against their own client base.

In a Dealing Desk environment, there is an obvious conflict of interest because the Forex broker makes money not only from charging you on the spread, but they also profit from your losing trades. However, the main advantage of choosing a Dealing Desk Broker is that they generally have lower minimum deposit requirements and will not charge commission.

Non-Dealing Desk Brokers

TThe Non-Dealing Desk market environment is designed to give traders true market pricing and execution with no price re-quotes. Unlike dealing desk brokers, a non-dealing desk broker will not act as counterparty to your trade and will post your trade directly to the market. The main disadvantage of non-dealing desk brokers is that the required minimum deposit is usually higher, and commission is charged on trades.

ECN Brokers

ECN (Electronic Communication Network) brokers are so-called because they rely on a network of market participants (usually large lenders such as banks) to serve as counterparties to Forex trades. When you post a trade with an ECN they will find a third-party to take the other side of your trade, removing the conflict of interest present with a market maker.

ECN brokers will have tight spreads (and will charge commission on trades) but if there is not enough liquidity to execute your order, you’ll often get re-quotes.

ECN/STP Brokers

STP is short for Straight Through Processing – with STP your order is sent directly to the counterparty through the Financial Information Exchange (FIX) protocol. The FIX protocol decreases trade execution time, reduces slippage and ensures that traders get the best available pricing.

An ECN/STP Forex broker operates the same way as an ECN broker does but with less chance of getting requoted on your trade. Some STP brokers will also act as a market maker if your order cannot be executed by the interbank market.

The main disadvantage of an STP Forex Broker is that you’ll receive dynamic (varying) spreads depending on market volatility and available liquidity.

Trading Accounts

Brokers will often have different tiers of accounts for you to select from. The more capital you intend to deposit with the broker, the tighter spreads you will receive and the higher leverage you will get. You will also have more access to account managers, data and signals.

Some basic trading accounts have a required minimum deposit of only 5 USD (20 MYR) but generally, most will be between 100 USD (4000 MYR) and 500 USD (20,000 MYR). I would always recommend that you only deposit money that you are comfortable losing because while trading can be very profitable, it is a high-risk venture.

Demo Accounts

Forex brokers will also have demo accounts, which are free accounts where you can practice your strategies and trading.

Demo accounts are important for beginners as well as for experienced traders who want to test different trading strategies. Some demo accounts are time-limited and after the demo period expires you will be encouraged to sign up for a funded account. Most brokers will allow you to keep your demo account once you have opened a live account.

Spreads

The spread is the difference between the buying price and the selling price of a currency. This difference is where a broker makes their money. As discussed above, direct market access brokers will charge a commission and have tighter spreads whereas market maker brokers will have no commission and wider spreads. Spreads will also change depending on a broker’s deal with their liquidity provider. We will go into more detail on spreads and commission and the bottom of this page.

Leverage

Leverage is additional capital borrowed from a liquidity provider and enables traders to open larger positions than would be possible with their existing account balance. It is presented as a ratio (such as 50:1 or 200:1)

Leverage is used because the movements in the currency markets are very small, so if retail traders did not use leverage their gains would be tiny. Brokers usually offer leverage anywhere from 100:1 to 1000:1, the exact amount you receive will depend on which liquidity provider your broker uses and your experience as a trader.

Leverage is dangerous because it not only maximises your profits, but it also maximises your losses. It’s advisable for retail traders with little experience to start with lower leverage because the risk exposure at higher levels can be significant. As you gain more experience and your broker sees that you are trading successfully, they may offer you increased leverage on your account.

Trading Tools at Forex Brokers

Brokers usually offer forex tools like calculators, economic calendars as well as trading signals so that you have easy access to as much information as possible.  When you sign up with a broker, ask your account manager what tools you will have access to for free, and what they will charge you for. This is often posted on their website but having this discussion with the broker before you have made your first deposit will often get you more free tools than is standard.

Customer Service

It is important that you choose a broker that has excellent customer service. All brokers offer customer service 5 days a week, but it is only a select few that will give you access to a dedicated account manager and weekend assistance. For some brokers this will require a larger minimum deposit and access to the higher levels of account tiers. Make sure your broker offers customer support in your preferred method of communication – whether that’s chat, email or telephone. eToro, for instance, no longer offers live customer support and operates a ticket system for all queries and problems.

Signup Bonuses

There is controversy over whether giving bonuses to first-time traders should be allowed. European regulators have recently banned the practice, and it looks like the Australian regulator will soon follow suit, while others around the world still allow it. Some brokers offer bonuses based on the amount that you deposit in your account, and others give you offers or run tournaments. Some offer no deposit bonuses to get you started.

Important note: Do not rely on bonuses because they are often come with fine print and are used as a mechanism to drive in new customers.  You will often not be able to withdraw them without trading with a broker for many months.

Forex Spreads and Commission

Spread and commission are the two ways brokers make money from traders. The spread is charged by all brokers, while commission is generally only charged by direct market access brokers (ECN or ECN/STP brokers). Let’s look at both in more detail:

Spreads

The first, and main source, of income for brokers, is the two-way quotation system. When you’re deciding whether to buy or sell a currency you’ll notice that a broker will give you two quotes: the Bid and the Ask price.

The bid price is the price at which you sell, while the ask price is the price at which you buy. The asking price will always be greater than the bid price. The difference between the bid price and the ask price is called the spread.

If the quotes of the spreads are very small, or what is called tight, that means they are very competitive. If the spreads are wide, the broker is trying to make more money from their customers who trade these pairs. It can be that the pairs have very little liquidity or that the broker is trying to make additional profits from their customers who trade these pairs.

In order to make money as a trader, you have first to overcome the spread. Forex brokers generally offer two types of spreads:

  • Variable spreads: which is determined by currency pair liquidity and market volatility.
  • Fixed spreads: which are pre-agreed in advance by your broker and are not influenced by market conditions. Fixed spreads are usually found for the major pairs with higher liquidity and sometimes limited to certain account types.

To read more about spreads and what the spread tells you, we have an article here.

Commission

Generally, commissions in Forex trading are similar to the spread in the sense that they are charged on every order placed. Unlike the Forex spread, commissions aren’t determined by either market volatility or by currency liquidity, but by your broker. Forex brokers generally offer two types of commissions:

  • Fixed commissions: The standard pricing structure offered by the majority of Forex Broker is around $3 per each $100k notional value trade. Usually, you’ll have to pay a commission both when you open and close a position, so it’s the full round turn cost that we have to keep in mind.
  • Variable commissions: This commission pricing model is determined by your total turnover, in other words, your total volume traded. With the variable commissions, a broker may also charge the volume commission rate based on the account balance and the total volume traded.

The bottom line is that no matter what type of the fee structure you prefer there is one certainty – there is a cost of doing business in the Forex market.

Additionally, you have to consider that aside from the transactional costs of trading there might be some extra costs like data feeds fee, overnight rollovers, and other hidden fees such as deposit or withdrawal fees.

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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.