Forex trading in Malaysia: market review and top online brokers

The Malaysian financial market is brought together by its original and Islamic parts. It has a diversified and open economy, with a total capital market valuation of around a trillion dollars for December 2020. Despite the fallback caused by pandemics, the markets recovered following the later upturn in economic activity.

Based on the IMF’s index of financial development, Malaysia has been charting consistent development, particularly in terms of depth, openness, and efficiency. Their data points out that Malaysia’s overall financial sector developed significantly between 1993 and 2016. It has been performing remarkably, surpassing its companions in the emerging markets and, in some aspects, even financial markets of advanced economies.

Notably, Malaysia ranks 12th out of 190 countries in the World Bank’s Ease of Doing Business index – one that rates countries based on how favorable their regulatory environment is for business operations, and the level of protection of property rights. Also, the World Competitiveness Yearbook 2021 ranks Malaysia’s global competitiveness at 25th place out of 64 economies.

Malaysia’s solid Islamic financial legislative environment, its digital inclination, an integral Islamic community, and the Government’s intention to lead the Islamic economy have forged the way for it to become a global Islamic fintech hub. According to the Central bank of Malaysia, it focuses on the implementation of technology to deliver Shariah-compliant financial solutions, products, and services through Islamic accounts Forex trading.

Online trading in Malaysia

The Bursa Malaysia Exchange supports trade execution in Malaysian shares, bonds, funds, and ETFs, including Islamic products. Exchange transactions are largely executed in Malaysian Ringgits – the country’s national currency.

Online brokers generally offer several trading activities, including:

Contracts for difference (CFD) Trading in Malaysia

Making transactions in CFDs assumes speculating on the future of your underlying assets. It may be a currency pair, commodity, stock, index, or other financial instruments.

OANDA offers a lot of options for contracts compared to other brokers. The list of financial instruments consists of CFDs on indices, commodities, and bonds. The broker gives access to two types of trading platforms: fxTrode (Oanda’s personal development) and MetaTrader 4. Both of these platforms are available in three types: desktop, mobile, and Web.

In addition to CFDs, traders can choose from a variety of instruments such as Forex: more than 70 currency pairs; metals: Gold and Silver; commodities: Oil, Natural Gas, Copper, and Wheat; indices – 16 in total and Bonds.

Globally, OANDA offers three account types: demo, Standard, and Advanced Trader, which makes the broker a fine fit for both new and seasoned trades. Moreover, it requires no minimum deposit to open an account with OANDA, but new traders who’ll top up their accounts get a welcome bonus of up to $1000.

Trading with Islamic Forex accounts in Malaysia

Suitable for people who wish to trade following Sharia law with Islamic financial products, including Sukuk (Islamic bonds), Mudharabah (profit sharing), Wadiah (safekeeping), Musharakah (joint venture), Murabahah (cost plus finance), Ijar (leasing), Hawala (an international fund transfer system), Takaful (Islamic insurance).

XM Group provides Muslim traders with Islamic accounts, including a swap-free one with a fixed fee instead of a swap. The fee is not an interest and is built upon the direction of the order.

It is a trustworthy broker, regulated by CySEC, IFSC, ASIC, and FCA in facilitating the trade of numerous financial instruments and assets in multiple national markets.

Forex Trading in Malaysia

Exchange of one currency for other forms the basis of Forex trading. Rates move up or down as one currency rises or falls relative to another in a particular currency pair. 

The popularity of Forex trading went up greatly once online trading became possible. Today, the Forex market is the most liquid and largest financial market globally and has a daily turnover of $6.6 trillion a day.

The official law in Malaysia states that you can trade Forex in the country through an approved and registered organization. There are multiple reputable brokers you can trade with.  

HF Markets – before rebranding known as HotForex –is a truly global multi-asset broker with a presence in over 180 countries, 27 supported languages, and over two and a half million open accounts.  It provides online trading in Forex and CFDs on commodities, gold, silver, and indices. In particular, HF Markets provides low transaction costs and flexible leverage on Forex Gold trading. You can find more information about this trading instrument in our article.

HF Markets is a reliable broker that offers some of the best possible conditions for trading. One perfect choice if you’re looking for diversity in your trading portfolio. Also, it offers a very generous bonus of up to $5000 on your account and provides an HFcopy – a Social Trading feature where anyone can join as a follower or as a strategy provider.

As followers, traders choose from the list of strategy providers and link their accounts to theirs, so that the performance of the latter gets copied and translated into the accounts of the former.

Forex trading regulation and taxation in Malaysia

Why do we phrase a headline in this way, unlike in our other articles? Is Forex trading illegal there? Short answer – no! But it has specific features we have to mention. 

In 2012, the Central Bank of Malaysia – Negara – claimed that foreign exchange operations are allowed only through investment, licensed commercial, or Islamic banks. Yet, according to Forex Malaysia, the brokers you choose must comply with certain guidelines, set by: 

The Capital Markets and Services Act of 2007 is a Malaysian law that consolidates the Securities Industry Act of 1983 and the Futures Industry Act of 1993. It regulates and provides for matters relating to the activities, markets, and intermediaries in the capital markets. As this act provides for all companies involved in the securities and derivatives markets, it covers all CFD brokers.

The Exchange Control Act Of 1953, imposes general restrictions on Forex deals by residents and non-residents. The last ones are not in unfavorable conditions: they are allowed to transfer foreign currencies, investment returns, and trading profits from deals in Malaysia abroad as well as to purchase and own ringgit assets, such as land property and securities.

The Securities Commission Act Of 1993, authorizes the Malaysian Securities Commission to license and manage businesses dealing in securities. The Money Changing Act Of 1998 establishes regulations for money-changing businesses.

Traders do pay taxes. Trading gains are not tax-free income in Malaysia, so all your profits are taxable if your brokerage and capital are abroad. According to Forex Malaysia, locals have to declare just as with any other income, either as an individual or a company.

When searching for a broker to trade through in Malaysia, you should check if they offer a suitable range of assets, a user-friendly trading platform, fine regulation, and adequate financial security for your margin deposit. Moreover, Islamic traders may find Malaysia an especially good place to open Sharia law-compliant accounts and trade Islamic financial products.

How to start Forex trading in Malaysia?

All you need is a basic understanding of how the Forex market works, reliable brokers, and a speedy Internet connection. Sounds easy enough, but let’s break it down point by point. 

Market understanding and trading education

Most reputable brokers provide their users with trading guides, e-books, expert articles, and educational videos. And they are right to invest in it – the more you know about a market, the better you understand how it works, the more actively you trade, the more profit you make, and the longer stay with them. 

FXTM (Forex Time) definitely can help you to build your trading skills with their free educational resources. The broker provides learner-friendly, easy-to-read manuals and introductions for beginners and intermediates alike. More experienced traders may also benefit from trading guides if they’d like to refresh their knowledge. The list of available resources includes guides, e-books, webinars, and videos. 

Moreover, FXTM offers multiple investment opportunities and attractive trading conditions as well as interesting trading tools and features, Copy Trading being the main one.

Trading strategy and chance to practice

Usually, trading strategies are built on your market knowledge and experience. And if we assume that the previous point got us covered with the educational base, then gaining some practical experience without losing tons of money on tryouts may be tricky. 

However, there is one option you better pick as a trading newbie – a broker that provides a demo account! It is a great thing when you want to try out different strategies or trade different currencies without taking any risks.

Alpari allows new users to open a demo account – a practical approach to learning the basics of trading. Also, it is a comfortable introduction to the MT4 and MT5 platforms, which most of the other brokers support as well. 

Another thing that Alpari offers traders is Forex PAMM accounts in line with its investment services. That’s a very strong advantage as many users are looking for a possibility to make some passive income in addition to or in replacement of active trading.

Cryptocurrency trading in Malaysia

According to the official website of the Malaysian Central Bank, Bitcoin, and other cryptocurrencies are not recognized as legal tender there. It means that the Central bank does not cover and regulate their operations. However, this fact doesn’t make cryptocurrency illegal per se, but the public is advised to be cautious of the risks associated with the usage of digital currency.

The cryptocurrency was officially recognized by the Malaysian Court as a security and commodity in 2018. The Court stated that it may be considered as a form of a commodity (even if in intangible form) with an attached value, the same way value is attached to shares. Also, there are a few platforms, regulated by the Securities Commission. 

AvaTrade gives you the opportunity to trade one of the most popular Cryptocurrencies 24 hours a day, having the ability to open long or short positions. It has such a range of Crypto as Bitcoin, Bitcoin Cash, Ethereum, Ripple, Dash, Litecoin, Bitcoin Gold, and EOS. In addition to Crypto, 1250 instruments are available to clients: stocks, securities, indices, commodities, currency pairs, and CFDs.

In addition to web platforms with AvaTrade, you can also use a mobile app. The advantages of trading using a mobile app are obvious. With an Internet connection and a mobile software package, the user can carry out trading operations from any corner of the globe.

The company holds several regulatory licenses, including ASIC, FSA, Abu Dhabi, and British Virgin Islands regulators.

AvaTrade is a broker that provides optimal working conditions for traders with any level of experience. It has such a useful tool as Ava Copy Trading – AvaSocial that enables you to copy the performance of successful traders you choose and gain with them the way they trade.

Top Forex Brokers in Malaysia

The Forex market in Malaysia is rapidly growing. There are numerous legal institutions that traders can use for forex trading. Thanks to this expansion, the Malaysian market has the potential to offer immense opportunities. However, Forex trading can be challenging for beginners to master. But no worries! There is a great opportunity to start your way in the Forex market – Social Trading (also known as Copy Trading). By doing it, you can get passive income in the Forex market by automatically copying deals of professional traders.

Offering it and many other features, here comes the list of the best Forex brokers in Malaysia: 

OANDA in Malaysia

OANDA is a well-known broker for traders of every level. OANDA offers trading in over 100 instruments including currency pairs, indices, commodities, bonds, and metals. There are 9 base currencies available in the company: EUR, GBP, CHF, USD, CAD, AUD, JPY, HKD, and SGD.

Globally, OANDA offers three account types: demo, Standard, and Advanced Trader, which makes the broker a fine fit for both new and seasoned trades. Moreover, it requires no minimum deposit to open an account with OANDA, but new traders who’ll top up their accounts get a welcome bonus of up to $1000.

XM Group in Malaysia

XM Group has been there for more than a decade and offers one of the broadest trading instrument choices with attractive trading conditions, numerous educational materials, and trade incentives. It is suitable for traders of all levels who want to have access to many market sectors and have their broker’s support as they go. And of course, we can’t forget the nicest part – XM Group offers three bonus program types, complementing them with free VPS and zero-fee deposits and withdrawals. You’ll get a 100% automatic entry bonus of up to $5000 on your first deposit.

HF Markets in Malaysia

HF Markets is a reliable broker that offers some of the best possible conditions for trading. One perfect choice if you’re looking for diversity in your trading portfolio. Also, it offers a very generous bonus of up to $5000 on your account and provides HFcopy – Copy Trading feature where anyone can join as a follower or as a strategy provider.

As followers, traders choose from the list of strategy providers and link their accounts to theirs so that the performance of the latter gets copied and translated into the accounts of the former.

NAGA Markets in Malaysia

NAGA would be one of the best options if you’re looking for a broker that can provide you with advanced, but user-friendly trading tools and introduce you to the trading community at the same time. It offers a wide choice of trade instruments and educational bases to make trading more effective and secure. The last point is guaranteed by several reputable regulative bodies, those rules NAGA has to follow (The UK: FCA, Cyprus: CySEC, Europe: MiFID II, MiFIR)

NAGA’s special feature is friendliness to users with any skill level, allowed by unique copy trading mechanisms. If you’re just starting as a trader, you can practice with a demo account first, then switch to the real one and activate that auto-copy function. If you’re a trading pro, you’ll get a nice copy bonus, when your movements will be successfully followed. Win-win for everyone!

AvaTrade in Malaysia

No matter if we talk about trading instruments available or kinds of platforms and operating system broker supports, you probably would like to have as much trading freedom as possible. 

In that case, look at AvaTrade with more than 1250 assets, including Forex, stocks, bonds, indices, cryptocurrencies, and 24/7 multilingual support all over the globe. It is a global broker regulated by six international and regional financial authorities. Also, it is especially successful in the UK, Germany, South Africa, and Egypt – countries not only hard to win but also to enter. 

Forex Time (FXTM) in Malaysia

FXTM is an international online trading broker that provides users with an extensive educational base, investment opportunities, and attractive trading conditions. Moreover, it offers interesting trading tools and features, Copy Trading being the main one.

Alpari in Malaysia

Alpari is a very experienced and versatile broker. It has an in-depth knowledge of the industry and provides users with various account types and platforms. In addition, it offers not only PAMM accounts but also portfolios to diversify any investment strategy you’re up to. So, if you’re looking for a solid combination of experience, reliability, and functionality in one broker, Alpari may be your choice.

If you’d like to diversify your portfolio and value all features, mentioned above, equally, then it’s a good thing that actually you don’t have to pick just one broker. Be sure to take full advantage of available demo accounts to test all your strategies, and benefit from some of the most attractive bonus systems.

By registering and confirming an account with several of the TOP brokers in Malaysia, you can not only compare trading platforms to find the most fitting one but also maximize the Forex bonuses you receive. It will allow you to conduct more tests of various trading strategies and set the way to become a real pro-trader.