Best Forex Brokers in Malaysia

The legalization of currency trading in Malaysia has marked the beginning of the new era in the country’s financial landscape. However, despite the surging interest, the growth of forex trading is still hampered by the confusing regulatory landscape, which is a breeding ground for shady financial practices.

forex brokers in Malaysia

This is not to say licensed forex brokers in Malaysia are non-existent – they just happen to be a little bit harder to find. Here is an overview of factors one should keep in mind when selecting a trusted forex broker, along with some insights relevant to Malaysia.

Best Brokers For Beginner Currency Traders

Currency trading has been recognized as a legitimate financial activity. Nevertheless, not every licensed forex broker in Malaysia is suitable for entry-level traders. So, if you are at the beginning of your trading experience and have not yet settled with a trusted forex broker, there are a couple of things to look for in potential candidates. 

The first is, quite obviously, simplicity – after all, currency trading poses enough challenges in its own right:

The second factor crucial for newbies is the presence of educational tools. 

Keeping these two criteria in mind while choosing the best forex broker will help you avoid unnecessary hurdles and find a reliable partner. 

Best Forex Trading Platforms

The general rules for choosing the best forex broker are generally the same around the world. Some of the familiar ones include the trustworthiness of the broker, functionality, and convenience of the interface, and compliance with local and international regulation, among others. In the domain of broker Forex Malaysia, however, there are a couple of additional things to consider, and these have to do with the country’s tricky regulatory landscape.

The most important thing to understand is that not every forex broker Malaysia has is subject to the regulation of its financial authorities. The national currency, Ringgit, is regulated by Bank Negara Malaysia, but the regulation of financial institutions is made by the Securities Commission of Malaysia. To make things even more complicated, many forex brokers in Malaysia operate under the regulation of the Labuan Financial Services Authority, a regulatory body that provides a business-friendly environment.

In such a tangled mess of regulatory bodies finding a trusted forex broker Malaysia may seem nearly impossible. Fortunately, many of these factors may not even matter when it comes to Forex trading. For starters, the chances are that your trusted forex broker has very little to do with Malaysian regulation. Many of them are considered a foreign investment and, as a result, regulated offshore. What’s more, as long as no Ringgit exchange is taking place during trading, Malaysian regulations do not apply. Simply put, in most cases, selecting a trusted forex broker Malaysia is not that different from a trusted platform anywhere else.

Best Forex Brokers For Low Costs

The cost of trade is another important aspect of selecting a suitable forex broker. This cost is formed by charging a fee from each transaction made by the trader and is the main source of income for brokers. 

In the case of broker Forex, the commissions are based on the spread – the difference between buying and selling prices, which is measured in pips (points in percentage). The most popular currency pairs like USD/EUR typically have a spread of 1 to 3 pips, which means that each time you place a bid, you will lose this amount. Naturally, the lower the commission, the more profitable the trading. 

You should also remember that spreads do not always stay the same. This is only true for the so-called fixed spreads, which do not change over time. Quite a few brokers choose another approach by adjusting the spread depending on the state of the market; the practice referred to as a variable spread. As a rule, the variable spread will be lower than a fixed one most of the time. However, during periods of volatility, it will spike dramatically and may cost a hefty sum for traders who ignore it. So understanding their role is crucial if you are interested in low-cost trading.

Best International Offering

As was mentioned above, many of the licensed forex brokers in Malaysia are actually subject to offshore regulation as a foreign investment. So, in a certain sense, your platform of choice may already be an international company even if it is subject to national regulations. In this sense, the term represents compliance with international regulatory standards, not the location of the platform’s main office. 

That being said, there are several regulatory bodies relevant for Malaysian businesses, such as CySec, FCA, and ASIC. If your Malaysia forex broker is compliant with at least one of those – there is probably no reason for concern; otherwise, you will be better off looking elsewhere.

Best For Day Trading 

Day trading is a term for a short-term strategy where a deal is opened and closed within the same day. This approach is often looked down upon by large-scale traders, mostly because it is less predictable and often relies on chance. Nevertheless, day trading has its advantages and, with a good combination of expertise and luck, can be a viable approach.

Many Malaysian forex brokers have already recognized this trend and went the extra mile to make their platforms suitable for day trading. The most popular steps are various UI enhancements to streamline the trading process and analytical tools to monitor the state of the market and provide timely insights. Since many of these details require some time to identify and evaluate, we incorporate this factor in our analysis of the best forex brokers, so you don’t have to do it on your own.

How To Choose A Forex Broker

Aside from regulatory compliance, commissions, and ease of use, selecting the best forex broker in Malaysia involves several additional factors. 

If it is a market maker, also known as the dealing desk broker, you may enjoy lower commissions and minimum deposits. On the other hand, non-dealing desk brokers rely on electronic communication networks and automated protocols to form price rates. This eliminates the conflict of interests but may be less forgiving for beginner traders.

In most cases, they differ by the number of trading volumes and access to additional services like market insights. Malaysian brokers also have Islamic accounts, which is understandably important for Muslim traders. 

How We Rate Forex Brokers

All things considered, choosing the best forex broker is quite an undertaking. For regular users, it is also time-consuming and costly. This is why our team has created a comprehensive methodology that accounts for a multitude of factors. These include, but are not limited to, regulation compliance, commissions and spreads, bonuses, types of accounts and brokers, availability and convenience of tools, and company reputation. 

Each factor is weighed and assigned its score to produce a definitive, measurable result. There is actually a lot going on under the hood, but the main takeaway is that the list is based on accurate and reliable data.

Best Forex Broker Summary

Overall, choosing a trusted forex broker in Malaysia is no different from anywhere else. Non-dealing desk brokers, both STP and ECN, offer better resilience against volatility while market makers may offer lower deposit requirements. Functional trading tools, analytics, and market insights are always a plus. And, of course, no commission is better than any commission.

There are certainly differences to keep in mind. The most obvious are Islamic accounts, which are important for a country with a predominantly Muslim population. It is also important to remember that different financial activities in the country are regulated by various organizations depending on the involvement of national currency. Some may even be subject to offshore regulation, which is important for international deals. 

Finally, there is no one-size-fits-all definition of “the best” – day traders may be more interested in the ease of use while beginners would like to see better user experience and market insights. Professional traders may not even care for any of these, relying instead on Forex tools and their own expertise. This is why our list of best forex brokers is based on a host of factors ranging from the technical stuff and spread sizes all the way to reputation and quality of support. With this information on hand, you can always count on the best deal on the market.