Forex Trading in Malaysia – Be Clear of the Facts Before Signing up with Malaysian Forex Brokers
Located in Southeast Asia, Malaysia is a federal constitutional monarchy with very hazy regulations when it comes to Forex trading. With a total landmass of over 330,000 square kilometers, it is made up of thirteen states and three federal territories. Over recent years, Malaysia has seen some considerable expansion and improvements of the local economy. With many experts putting a figure of 40% on the rise. These changes in the country’s economy, have of course led to increased wealth and greatly improved living standards. All of which have meant an increasing number of Malaysian people are becoming interested in Forex trading. It wasn’t very many years ago, that Forex trading would have been an illegal form of investment, with anyone caught trading in foreign currencies running the risk of being sent to jail. Things have changed dramatically, in recent years, but Forex trading in Malaysia, and choosing Forex brokers in Malaysia is still a risky business. And anyone considering this form of investment should be very wary and careful about what they are doing.
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An up to date look into the world of Forex trading in Malaysia
Many consider Malaysia to be an emerging market economy, which can be considered a good thing, but is also seen by some unscrupulous elements as a way to make a lot of money from inexperienced and naive Malaysian citizens. There have been numerous instances of Forex trading being touted as a get rich quick scheme, and a number of residents have had their fingers severely burned. There have been a number of fraudulent brokers and so-called experts who have been more than happy to pull the wool over the eyes of inexperienced traders. The country’s regulatory authorities aren’t taking this lying down, and are eager to charge anyone found guilty of fraud and deception in relation to Forex trading services very severely.
Anyone considering a venture into the world of Forex trading shouldn’t feel too worried, as it is easy to protect yourself from any unnecessary risks. There are a number of top Forex brokers in Malaysia and as long as you take the right precautions, be aware of the risks, and do enough research, there should be no problems. The best advice we can give is to research local legislation, and be certain that anything you read is up to date and truthful. If you have any doubts at all then walk away and choose only the best Malaysian Forex brokers. Forex trading is Malaysia is still a relatively new concept, and legislation still has a way to go, to keep up with more regulated countries such as the UK. If you want to be certain of the best possible protection you might be better choosing to trade with a broker that operates from a more a regulated location. In many of Malaysia’s states, government official still consider Forex trading to be illegal, and local Islamic beliefs can outlaw it all together.
If you are still looking for the best Malaysian forex brokers, lets give you some tips on how to find one.
How to pick top Forex brokers in Malaysia
Once you’re certain of local regulations, and are clear where you stand on religious grounds, it’s time to do some research and find the best Forex brokers Malaysia has to offer. Picking the right one is going to be important, because this is the only way you can keep your funds safe and secure. Due diligence is the byword when it comes to choosing a Forex partner, and if you don’t spend enough time reading all the small print and understanding the intricacies of trading you are putting yourself at risk of unwelcome problems. Wherever you might be located, in the world of Forex trading there are always going to be unscrupulous brokers, and people who want nothing more than to take all your money. Fraud prevention has come on in leaps and bounds but that doesn’t mean you can be complacent. We can help by sharing some sound advice that will get you well on the road to success.
- Do your research – We will of course, be providing you with as much information as we can, and there are also a number of other websites you can use for your own research. Don’t enter the market without gaining some knowledge of how Forex trading works, and understanding the latest regulations. The world of Forex trading doesn’t stand still for a minute. It is constantly evolving, and nowhere is this more apparent than Malaysia. Don’t be afraid to talk with other traders either, as they will have a wealth of useful information. Once you’ve got a list of possible contenders check for reviews online, and not just the good ones, as the negative ones can be very revealing.
- Open a demo account – Most of the best Malaysian Forex brokers will have the option of opening a demo account, which is the perfect opportunity to try out a broker before risking any real money. With a pot of virtual cash you can get a feel for the broker, find your way around the trading platform, maybe try autotrading, and learn how to make payments.
- Is it really too good to be true? – Quite often, if an offer seems far too good to be true it will be. There are very few schemes that will deliver on promises of untold wealth, and Forex trading is one of them. Being successful takes hard work, knowledge, patience and requires the services of a good Malaysian Forex broker.
- Choose an FX broker in Malaysia that is regulated – All over the world there are various regulatory bodies that oversee the Forex market and ensure FX brokers meet certain standards. In the UK it is the FCA, in Germany there is BaFIN, CySEC in Cyprus, and in the USA it is SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission). but what about Malaysia? Is there a body that protects retail traders?
Forex trading in Malaysia falls under the remit of the Malaysian Securities Commission
The Securities Commission Malaysia, was formed in March 1993 under the Securities Commission Act 1993. It is a self funding statutory body that is responsible for investigating and enforcing certain rules with the ultimate aim of protecting Malaysian investors. It reports to the Minister of Finance and as well as overseeing the world of Forex trading it has a number of other functions. These include:
- Approving corporate bond issues
- Regulating matters in relation to securities and derivatives contracts
- Regulating matters relating to unit trust schemes
- Supervision of exchanges, clearing houses and central depositories
- Registration of prospectuses of corporations
- Licensing and supervision of licensed persons
- Ensuring market institutions and licensed people conduct business properly
- The encouragement of self regulation
The main aim of the Securities Commission is to be responsible for the protection of investors. It does this through various regulatory functions. It also has an obligation to promote and encourage the development of the securities and derivatives markets by virtue of statute.
There is another body that has a part to play in the Malaysian Forex trading market. The country’s central bank known as the Bank Negara Malaysia. It became a major player towards the end of the 1980s and played an important part in the Forex trading market for a number of years. However, it was asked to stop trading when the country’s Federal Reserve realized its speculation was having a significant impact on currency reserves. It became insolvent in 1994 following the sale of large quantities of currency reserves, but luckily was bailed out by the Malaysian Finance Ministry.
More recently it joined together with the Securities Commission and established the Finance Accreditation Agency (FAA). An independent and international quality assurance and accreditation body for the financial services industry.
While the regulation of the Forex industry is still under development it is nevertheless a very exciting market to be involved in. And we hope we’ve help make your choice of Malaysian Forex broker a little easier.
A final few words for those of you looking for the top Forex brokers in Malaysia
While it’s not possible for us to be specific and provide you with a few names, it is possible for us to offer a few words of advice. Choosing the best Malaysian Forex brokers is really more of a personal choice, as each and everyone of you will have your own set of preferences and priorities. We can give you some general tips and hints and point out the most important factors to consider. So, before we finish let’s look at some of the things you should be considering, in order to increase your chances of success.
- Choose the right Forex broker – It’s important to pick a broker you can trust. Also bear in mind the broker’s reputation, and whether they have taken the time to be a licensed and regulated broker. Other considerations will include how much you will be required to make for an initial deposit, the trading platforms available, customer service and the level of spreads.
- Start with a demo account – This is the most sensible move to make for a newbie trader, as it will allow you some time to get a feel for the broker you’ve chosen and check whether forex trading is right for you. Many of the brokers offering this type of account only make this option available for a certain period of time. However, there are a few that offer demo accounts with no time limits, so this will be the best option of all.
- Be wary of leverage – Many Forex brokers offer some very attractive leverage, and it can be very important, especially if your trading funds are limited. However, be wary, as trading using leverage can be very risky. While it gives the opportunity for large profits it can equally lead to significant losses.
- Understand the charts – Charts can be a very useful set of tools but there is little point having them if you don’t understand the information being shared, Spend some time honing your knowledge and take advantage of any training your broker has provided.
- Keep your emotions in check – It is all too easy to let your emotions rule your trading decisions, especially in the beginning. Teach yourself to keep those emotions in check as successful Forex trading requires discipline.
Wherever you might be located, we wish you all the best with your Forex trading. Keep us as one of your favorites because we’ve got lots more to share.