Top Platforms for CFD Trading in Malaysia

What are CFDs?

When choosing a CFD trading platform in Malaysia, it is crucial to consider various factors to ensure you select the most suitable option for your trading needs. Here is a step-by-step guide to help you make an informed decision:

Regulatory Compliance

Ensure that the CFD platform provider is regulated by a reputable authority, such as the UK's Financial Conduct Authority (FCA) or the EU's European Securities and Markets Authority (ESMA). This will offer you greater security and protection in your trading activities.

Platform Features

Evaluate the features offered by the platform, such as user-friendly interfaces, charting tools, technical indicators, and order execution options. These features can significantly impact your trading experience and efficiency.

Trading Assets

Assess the range of trading instruments available on the platform, including stocks, indices, commodities, and currencies. A diverse asset selection will provide you with more opportunities to diversify your trading portfolio and capitalize on market movements.

Brokerage Fees

Compare the fees charged by different CFD providers, including spreads, commissions, and overnight financing charges. Lower fees can help maximize your potential profits but also consider the overall service quality provided by the broker.

Customer Support and Educational Resources

Evaluate the quality of customer support and the availability of educational resources, such as webinars, articles, and video tutorials. These resources can help you develop your trading skills and stay informed about market developments.

By considering these factors and conducting thorough research, you can choose the best CFD trading platform in Malaysia that meets your requirements and enhances your trading experience.

Are CFD Trading Legit in Malaysia?

CFD trading is permitted in Malaysia, and brokers intending to offer CFDs to Malaysian residents must obtain authorization from the Securities Commission Malaysia (SCM) and adhere to its regulations and operational standards.

The SCM is responsible for overseeing the forex industry, and in 2018, legislation was introduced specifically targeting CFDs. These regulations mandate licensed brokers to maintain certain capital levels, inform clients about CFD risks, and contribute to the country's Capital Market Compensation Fund.

Although CFD trading is legal in Malaysia, there is no regulatory framework in place to protect cryptocurrency investors who trade crypto CFDs. The Central Bank of Malaysia does not regard cryptocurrency as legal tender, leaving it unregulated.

To offer CFD trading in Malaysia, a broker must be authorized by the SCM and comply with its rules and operational standards. The broker needs a minimum paid-up capital of RM 10 million during its operation to secure a CFD dealing license from the SCM. Licensed brokers must maintain specific capital levels, educate clients about CFD risks, and contribute to the nation's capital.

The SCM has imposed restrictions on leverage and bonuses for CFD trading in Malaysia. The minimum margin requirements for individual share CFDs are 10% for index shares and 20% for non-index shares. Meanwhile, index CFDs have a minimum margin requirement of 5%. Nonetheless, leverage rates for CFD trading in Malaysia differ across platforms and asset types, with some rates reaching up to 1:400.

Rules and Regulation

Can I make money with CFDs in Malaysia?

Yes, it's possible to make money with CFDs in Malaysia through skillful trading. However, it's essential to remember that highly leveraged instruments carry significant risks, especially for beginners. According to statistics, up to 80% of traders lose money in this market due to a lack of strategy and the use of excessive leverage. To increase your chances of success, you need to invest time in developing and testing a trading strategy and improving your trading skills.

For beginners in Malaysia, it's crucial to start with a solid foundation of knowledge. Begin by understanding the basics of CFD trading, including the mechanics of entering and exiting trades, margin requirements, and risk management techniques. Familiarize yourself with the various asset classes available for CFD trading, such as stocks, indices, commodities, and currencies. This knowledge will help you identify the markets and instruments that align with your interests and risk appetite.

Next, focus on developing a trading strategy that suits your objectives, risk tolerance, and trading style. This may involve using technical and fundamental analysis to identify potential trading opportunities, as well as defining entry and exit points, stop-loss levels, and profit targets. Start with a simple strategy and gradually refine it as you gain experience and a better understanding of market dynamics.

Consider using a demo account before transitioning to a live account. A demo account allows you to practice trading with virtual funds, enabling you to test your strategy and develop your skills without risking real money. Once you are confident in your strategy and skills, you can start trading with a live account.

What are the cheapest CFD brokers in Malaysia?

Tickmill and IC Markets are known to be among the cheapest CFD brokers in Malaysia, offering low spreads and fees per lot for traders looking for cost-effective options.

Tickmill provides traders with multiple account types, including Classic, Pro, and VIP accounts. Spreads for the Classic account start from 1.6 pips, while Pro and VIP accounts offer spreads from as low as 0.0 pips with a commission per lot. They also provide access to a wide range of financial instruments, including forex, indices, commodities, and bonds.

IC Markets, the largest forex broker globally by trading volume, offers three account types. The Standard account offers spreads starting from 1.0 pips with no additional commissions, while the Raw Spread and cTrader Raw accounts have spreads starting from 0.0 pips and charge a commission per lot. IC Markets provides access to numerous trading instruments, including forex, indices, commodities, stocks, and cryptocurrencies.

What is the best CFD trading platform for beginners in Malaysia?

For beginners in CFD trading, it's essential to choose a platform that offers the necessary tools and features to learn and develop trading skills without risking a significant amount of money. For instance, demo accounts provide an opportunity to practice trading without risking real money. Beginners need to test different trading strategies and understand the platform's functionalities before trading with real money.

Traders can also try micro or cent accounts, which allow investing small amounts of money. They make trading more accessible and less intimidating for beginners who might not have a lot of capital to invest. Low minimum deposit is another important feature for beginners, as it allows traders to start trading with a small amount of money and gradually increase their investment as they gain more experience.

Passive income opportunities like copy trading and PAMM accounts can also be helpful for beginners. These features can provide an additional source of income for beginners while they are still learning how to trade. It's essential for brokers to offer these features to attract and retain beginner traders and provide them with the necessary tools and resources to learn and succeed in CFD trading.

For instance, IC Markets and FxPro are two well-established CFD brokers that offer a range of trading instruments, including forex, stocks, and commodities. Both brokers have demo accounts and micro or cent accounts, which are ideal for beginners who want to practice trading without risking large sums of money.