How To Legally Start Forex Trading In Malaysia

Is Forex regulated in Malaysia?

Yes, Forex trading is legal in Malaysia, providing a structured and regulated environment for traders to engage with the global currency market.

https://www.bnm.gov.my/

Bank Negara Malaysia (BNM), the nation's central bank, stands at the helm of this regulation, ensuring that Forex trading activities align with the country's financial laws and policies. For private traders, the pathway to Forex trading is twofold:

1. The primary and most secure route is through licensed institutions. These include commercial banks, Islamic banks, investment banks, and international Islamic banks that have received approval from Bank Negara Malaysia (BNM). Trading within this framework guarantees compliance with national financial regulations and offers traders a layer of security and oversight.

2. An alternative, yet riskier, option is trading Forex through an internationally regulated Forex broker. This option opens the doors to global markets but comes with its set of challenges and risks, primarily related to regulatory compliance and fund security.

Understanding these pathways is crucial for any trader looking to explore the Forex market in Malaysia, ensuring that their trading activities are both legal and protected under the watchful eye of BNM.

Forex trading through a broker that is regulated in Malaysia

For Malaysian residents aspiring to venture into Forex trading, the path is clearly marked by regulations set forth by Bank Negara Malaysia (BNM), the nation's central bank. These regulations ensure that trading activities are conducted within a legal framework, safeguarding the interests of traders and the integrity of the financial market.

Forex trading through a broker that is regulated in Malaysia

Exploring the Forex market through internationally regulated brokers opens a broader horizon for Malaysian traders. These brokers, licensed in jurisdictions outside Malaysia, such as the UK, Europe, Australia, or Singapore, offer access to a vast array of global financial instruments and markets. However, it is crucial for traders to perform due diligence by verifying the regulatory status of these brokers and the protections they offer, particularly regarding the segregation of client funds.

Best Forex brokers in Malaysia

1

9.4/10

Go to broker

Your capital is at risk.

Minimum deposit:

$10

Bonus for deposit:

60%

Regulation:

FSC

Review

RoboForex is a brokerage company that was founded in 2009. RoboForex is a leading software developer in the Forex industry and one of the best Forex brokers based on client reviews.

RoboForex is recognized as a reliable partner by the most respected financial market experts. The company has won numerous prestigious awards. The RoboForex group of companies has an international license to provide services from FSC Belize (license No. 000138/437).

Pros/Cons

•Availability of favorable trading conditions and a minimum deposit

•Unique investment program CopyFx

•Highest affiliate payments: up to 84% of the fee paid by the referral

•Market launch - STP and ECN

•Instant withdrawal of funds

•Minimum deposit - $10

•A small number of currency pairs - 36, for accounts: Pro, Pro-Cent, ECN, Prime

•Lack of tools when trading on the R StocksTrader platform

Study Review

2

9.2/10

Go to broker

Your capital is at risk.

Minimum deposit:

$5

Bonus for deposit:

50%

Regulation:

MISA

Review

Pocket Option is an innovative Forex and binary options broker with over $500 million in trading volume. It offers active trading on financial markets, copy trading, and passive income on holding funds in dollar and cryptocurrency safes. The broker provides an in-house platform to trade binary options and MetaTrader platforms to trade CFDs on currencies, cryptocurrencies, stocks, indices, and commodities. Pocket Option was incorporated in 2017. The broker’s service is available in more than 95 countries and regions globally. Today, over 10 million users are registered with the broker, and 100,000 traders regularly use its services. In July 2023, it obtained a license from Mwali International Services Authority number T2023322.

Pros/Cons

•MetaTrader provides for trading binary options and CFDs;

•A demo mode is available for all account types;

•To register, you may use your Google email or Facebook/Google account;

•Active, social, and algorithmic trading is available on MT4 and MT5 accounts;

•Spreads are from 1.2 pips for Forex and no fees per lot;

•Referral program for retail clients with rewards of up to 50%-80% of the referee’s income;

•“My Safe” service that provides for crediting 10% per annum on the account balance not involved in trading;

•Cash back and promo codes for binary option traders;

•50% deposit bonus.

•The broker offers neither cent accounts for novice traders to test strategies and advisors, nor ECN accounts with near zero spreads for professional traders;

•Real-time communication with operators is available upon funding the account.

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3

9.1/10

Go to broker

Your capital is at risk.

Minimum deposit:

$100

Bonus for deposit:

0%

Regulation:

ASIC, SCB, CySEC, FCA

Review

Eightcap offers more than 800 trading instruments, namely CFDs [contract for (price) differences] on currency pairs, cryptocurrencies, indices, stocks, commodities, and precious metals. The broker has a minimum deposit of $100, a free demo account, and two live account types, which differ in trading costs. One account type has standard spreads without a fee, and the other has raw spreads that carry a brokerage fee. The maximum leverage is 1:500. Traders can use any strategy with minimal restrictions. Trading is carried out through MetaTrader 4, MetaTrader 5, and TradingView. Eightcap has two main features. First, the broker has a powerful training and analytical base. Second, the platform offers a number of unique tools, for example, Capitalise.ai, which provides automated trading with minimal risk. At the same time, there are no options for passive income, not even a referral program.

Pros/Cons

•The broker is registered in the Bahamas and Seychelles, and is regulated by the Securities Commission of the Bahamas (SCB, SIA-F220), ASIC (391441), FCA (921296), CySEC (246/14). Also, it partners with many proprietary firms;

•Traders need to deposit only $100 to open a live account, and the broker imposes few trading limits on its clients;

•Hundreds of the most popular CFDs are available, and the pool is constantly expanding;

•Eightcap provides one of the most profitable trading costs with really tight spreads;

•Almost all options for depositing/withdrawing funds are available and the broker does not charge a withdrawal fee;

•The broker’s clients can work through any of the three top trading platforms, including mobile versions of the MetaTrader solutions;

•The company provides high-quality training, extensive analytics, and its own developments for automated trading.

•No joint accounts, copy trading, referral program, or other options for passive income;

•Eightcap has some regional restrictions. For example, some services are not available in Australia;

•The broker's technical support is efficient and competent, but it is not available on weekends.

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Your location is United States

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Is Forex trading haram or halal in Malaysia?

In Malaysia, where Islam is the official religion and deeply integrated into the national identity, the question of whether Forex trading is haram or halal is significant. Islamic finance principles prohibit gambling (maisir) and uncertainty (gharar), both of which are inherent in speculative trading practices.

However, Forex trading can be considered halal if it adheres to Shariah-compliant methods of trading. This includes using Islamic accounts that do not incur overnight swaps or interest (riba), and employing strategies that avoid excessive speculation and ensure transactions are backed by actual assets. Moreover, trading should be conducted with a clear intention and not for gambling purposes.

As such, Malaysian Muslim traders often seek guidance from Islamic scholars and financial advisors to ensure their trading activities are in harmony with Islamic laws, making Forex trading a practice that can be aligned with Islamic principles, provided it is conducted responsibly and ethically. For more information, read: Best Forex Swap Free (Islamic) Accounts 2024

How to start Forex trading in Malaysia?

Embarking on the Forex trading journey in Malaysia requires a blend of education, strategic planning, and risk management. Here's how to get started:

1. Educate Yourself: Before diving in, it’s crucial to understand the Forex market, its workings, and the factors that affect currency movements. Utilize online courses, webinars, and books to build a solid foundation.

2. Choose a Broker and Open an Account: Select a broker regulated by Bank Negara Malaysia (BNM) or a reputable international body. Look for brokers offering Islamic accounts if you require Shariah-compliant trading. Opening an account typically involves submitting identification documents and completing a registration process.

Which Forex trading broker is the best in Malaysia?

Selecting the best Forex broker is pivotal for a successful trading experience in Malaysia. Here are tips to guide your choice:

• Regulatory Compliance: Ensure the broker is regulated by BNM or other recognized international regulatory bodies. This safeguards your trading activities and investments.