Tag Archives | forex trading in malaysia

4 FACTS about Trading Forex in Malaysia (Must Read!)

New to forex? No worries. You need to start somewhere. It might as well be today. Before venturing in the exciting world of forex trading, you must understand these 4 FACTS.

1. Forex is technically “not legal” in Malaysia. Let me elaborate. Bank Negara Malaysia does not allow any deposit-taking by to take place by any representative (authorized or unauthorized) of a forex company. All deposit-taking must be done by persons registered under Bank Negara. However, if you trade on your own, you are entitled to use money as you wish, whether to trade or to gamble it away in a casino. It’s up to you. Your life, your call. The Malaysian law is hazy on this. I have not seen or heard of anyone yet who is arrested for trading forex. I won’t guarantee that this will never happen in the future so don’t take my word for this.

2. All forex brokers have HIDDEN FEES. There is no such thing as a totally honest forex broker. Their main purpose is to make profit, whether it is from charging for deposits, or charging for withdrawals, or charging from each transactions made through the spreads, forex brokers will find a way to squeeze some money from any activities made while using their services. Take for example FXPRIMUS. They position themselves as being an honest forex broker. I agree with them to certain extent. However, some things are not stated when they sell their services to you. When you try to withdraw money using wire transfer, they will charge $50 USD  just for that to happen. $50 USD is a lot for most of us Malaysians. That’s equivalent to RM150. So, for some, FXPRIMUS might not be the right option. Regardless of this fact, they are still quite decent and worth checking out.

3. Finding a good mentor to teach you how to trade correctly can be very hard. This is a FACT. Not many successful forex traders in Malaysia are willing to teach how they got to that stage. The skills gained from forex are earned through closed doors. No fan fare, no hype and gimmick. True mastery is gained in front of the computer with deep thinking involved. But once you do find a great mentor, it won’t be as you expected it to be. It may be in form of an e-book or a simple advice from an obscure blog or a discussion in a forum. Check out this website for more insight on finding the right forex mentor.

4. Forex traders in Malaysia are divided into different camps and groups. Let me explain.  Malaysian traders who trade with easy-forex will find it more easier to communicate and get support if they join groups such as easyforexmalaysia.com or  Mocfx. If you happen to trade with Instaforex, there is a group for you to join in Malaysia. You could go to Carigold to find such groups or simply register with an established group such as instaforexmalaysia.net. One thing that I notice is that it is not advisable to trade with different brokers at the same time. This is the vibe I got by reading long discussions in online forums. It’s not that you can’t, its just that the sifu in these groups will only accept you if you show loyalty to their preferred forex broker.

Guys, I have outlined 4 important facts that you must be aware of before trading forex in Malaysia. Gaining mastery in forex takes time but the perks can extremely lucrative. Check out this link to find out one of the best learning resources on forex trading.

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Forex Trading in Malaysia

The Star Newspaper has recently written an article about Forex trading in Malaysia titled Risk or Opportunity. You can check out the article here. What I find interesting is The Star cited Yeo Chin Tiong, Head of Financial Markets for Alliance Bank Malaysia Bhd as saying

“Bank Negara has liberalised many of its policies, including allowing individuals to open foreign currency accounts (even joint accounts) with any authorised bank.”

I’m not sure if I read correctly.

Bank Negara allows individuals to open Forex accounts with authorised banks. So all these while, Forex is legal in Malaysia. I wonder what was the fuss about way back about Forex Trading being banned and so on.

Apparently,  Alliance bank is also offering Forex Trading services to individual traders as cited here

“Two foreign currency-related products offered by Alliance are the (single) foreign currency account, and the dual-currency investment (DCI). Minimum investment for the foreign currency account is 5,000 (of the foreign currency, for example US$5,000). The DCI, however, requires a minimum investment of RM250,000 for individuals with nett assets below RM3mil. For individuals with net assets exceeding RM3mil, they can invest any amount in the DCI.”

So Malaysians, there you have it. A proof that Forex is legal. You don’t need to trade in the dark and watch your back afraid that you might get caught by the cops or the local financial authorities. Just make sure you do things in a law abiding manner and if you do profit, don’t forget to pay your taxes.

Look, Bank Negara Malaysia is not quite bad actually. They don’t play good cop bad cop anymore. Check out the video below. It’s propaganda but I believe very effective at convincing the public about the importance of monitoring and check and balance:

 

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