Malaysia is a federal constitutional monarchy located in Southeast Asia. It has a total landmass of more than 330,000 square kilometers, and consists of three federal territories and thirteen states. Malaysia has seen major improvements and enjoyed rapid expansion of its economy in recent years, with some experts putting it at 40%. Coupled with improved living standards and increased wealth, Malaysia has also seen a rise in interest in the Forex market. Not too many years ago, trading on the Forex market would have been illegal, with caught offenders being sent to jail. Thankfully things have moved on from there and would-be Forex traders can now go about their business without the threat of jail.
An insight into the world of Forex trading in Malaysia
Malaysia has quickly gained a reputation for being an emerging market economy in Asia. However, change and rapid growth also have a tendency to attract unscrupulous elements that seek to profit from the inexperience of citizens, particularly if they hold in their hands newfound wealth. It’s all too easy to learn lessons the hard way and fall victim to the ruse of a fraudster. But this doesn’t have to be the way Forex trading works. It is easy to protect yourself from unwelcome risk if you want to participate in the trading of foreign currencies.
The most important rule is to always be aware. Forex trading in Malaysia and Malaysian Forex brokers are still relatively new concepts. Legislation in most locations is a bit behind the times. Trading on the Forex market in a more experienced jurisdiction will offer far more protection. Some local government officials still deem the practice to be illegal, in certain forms, and some local Islamic tendencies can mean it is outlawed all together. Our advice is to study local legislation, and make sure anything you read is bang up to date. Alternatively, seek out other traders to ask for guidance, and be clear on your religious grounds before starting to trade.
Top Forex Brokers for Malaysia
How to choose a reliable Forex broker in Malaysia
Once you’ve jumped the first couple of hurdles the next decision involves selecting the right Forex broker in Malaysia to use to access the market. You want to pick the right business partner to work in the background and keep your funds safe and secure.
You will need to practice due diligence in order to ensure there are no problems waiting to catch you unawares. Fraud goes hand in glove with the Forex market, wherever you may be located in the world. There have been a lot of advances in fraud prevention, but it still pays to be vigilant. Follow our tips and you’ll be well on the road to success.
- There are plenty of websites that will help you find a reputable broker, not just ours. But you will still have to conduct your own research. Understand the industry and make yourself aware of the most up to date options in the market for Malaysia. Speak with other traders and compile a list of possible candidates. Investigate local credentials and see if you can find any negative reviews.
- Take advantage of the free demo account that is offered by the best Forex brokers in Malaysia. Your own money won’t be at risk as you get to play the Forex market with ‘virtual cash’. It’s a great way to get a feel for a broker and be prepared for real money action further down the road.
- If it seems too good to be true, it probably is. Be very wary of seemingly unbelievable claims.
- Check that the Forex brokers in Malaysia are regulated. Wherever you may be located in the world, there will be a regulatory body that ensures brokers perform to a certain standard.
The connection between the Bank Negara and Forex trading
The Bank Negara Malaysia is the country’s central bank, as well as being responsible for managing the local currency, the Ringgit. Financial regulatory responsibilities are left with the Securities Commission in Malaysia. This commission overlooks exchange-traded products, including commodity and Forex futures and how brokers operate in the country. However, regulations are still pretty much in their infancy, and it is still really hazy, as to whether Forex trading is legal.
The Bank Negara Malaysia was a major player in the Forex market in the late 1980s. The activities of the bank, under Governor Jaffar Hussein, caught the attention of Forex players across the globe. It wasn’t long before the influence the Bank Negara had on the direction of the Forex market was substantial. The bank was requested to stop trading when the Federal Reserve’s chairman realized the impact of its speculation. Over the following few years the bank sold large quantities of some of its currency reserves and ended up being technically insolvent in 1994. Luckily it was bailed out by the Malaysian Finance Ministry.
Which just goes to show that even the so-called experts can get their calculations wrong. But that being said, Forex trading is an exciting market to be in, and we’d love to think that we’ve helped you make the best of what’s available.