Forex Trading in Malaysia

Is Forex trading legal in Malaysia?

The short answer to this question is yes, but only with a registered and approved financial institution. The official ruling is that you are only allowed to trade currency legally in Malaysia with licensed institutions, of which there are several. There are some that say that this rule only applies to physical currency and retail Forex Trading, especially online, does not fall into that category because online, you trade theoretical currency. That is why this is considered a tricky question requiring explanation and not just a simple yes or no. The easiest way to trade Forex in Malaysia legally is to use one of the approved institutions, and maintain an Islamic account.

Investing overseas is legal in Malaysia and there are many opinions that say that retail forex trading with an offshore brokerage can be easily considered foreign investment. The main issues that the nation has with Forex is that they are a developing country that wants to control the value of their currency to some degree. Since most Forex trading even in Malaysia does not involve their own currency, they tend to overlook the many ways that Forex can be traded using other currencies.

The idea here is that the laws are written in favor of the government being able to act if they see fit. Meaning, that it is extremely unlikely that you will be arrested in Malaysia for trading Forex because there are ways to do it legally but the government reserves the right to have some control over what is happening. The law does strictly prohibit Forex trading with the funds of others and soliciting funds to trade. This is pretty clear and will get anyone who transgresses these regulations into a heap of trouble.

There are many laws on the books that people do not comply with and they are not even aware of the law in the first place. This means that most of the time, you can go on your merry way and not have any problems with the law, but the minute you do something that crosses the authorities or brings your offenses to the attention of the authorities, you can be penalized for everything that you are doing wrong, even the ones you didn’t know about. Forex trading in Malaysia is a pretty good example. It is likely that if you are trading your own funds, not bothering anyone and not being very public about it, nothing will happen to you at all. If you do something that angers the authorities, they can then come after you for every little law that you are breaking including this one.

Since the law is very grey here, there is a risk of getting into trouble with the government, if you are trading with a brokerage that is not on the list of licensed institutions and then risking everything you do being examined closely as well. That being said, most people who are trading from Malaysia with their own funds and an overseas broker will never have a problem.

Top Malaysian Forex Brokers

  1. FBS Forex
  2. Tifia Forex
  3. Lite Forex
  4. Just Forex

Forex Malaysia Ringgit

TRADING THE MALAYSIAN RINGGIT

The Malaysian currency is called the Ringgit, a name that has been taken from the Malay language and which means “jagged” in translation. Originally, this name refers to the Spanish silver coins with their sharp edges which were in wide circulation in Malaysia in the past. The modern Ringgit was issued in 1967, but was originally given the name Malaysian Dollar in English; the name Ringgit was the Malaysian-language name for the monetary units. Unofficially, the Malaysian Ringgit is still known as the Malaysian Dollar, and is made up of 100 Sen. Its Forex code is MYR. The Malaysian Ringgit is one of the stronger currencies on the Asian continent.

Malaysia is a rapidly developing country which is now experiencing industrialisation. Its currency plays a key role in its development, since it has been strong for some time, and the Malaysian central bank, the Bank Negara Malaysia, has a policy of keeping the exchange rate of the Ringgit down instead of supporting it. Originally, the Malaysian Ringgit was pegged to the US Dollar; however, over time the peg was removed, only to be reinstated in 1997 as Asia suffered a financial crisis. Today, that peg to the US Dollar has once again been removed, and the currency now floats against many major world currencies.

 

THE MALAYSIAN RINGGIT’S HISTORICAL BACKGROUND

The Malaysian Dollar first came into being in 1967, having been issued by the Bank Negara Malaysia, Malaysia’s new central bank. This currency replaced the old Malaya and British Borneo Dollar, yet retained the denominations of its preceding currency, with the exception of the $10,000 denomination. The currencies of Singapore, Brunei and Malaysia had signed up to a currency union under the Interchangeability Agreement, and despite the emergence of three separate currencies for the countries in question, the Malaysian Dollar was still exchangeable at par with the Brunei and Singapore Dollars until 1973, when Malaysia pulled out of this agreement. The symbol RM (for Ringgit Malaysia) was introduced in 1993, replacing the symbol M$, or simply $, to refer to the Malaysian Dollar. The Malaysian Ringgit was a free-floating currency for a 2-year period between 1995 and 1997; however, after the financial crisis in East Asia in 1997, the Bank Negara Malaysia took the decision to peg the currency to the US Dollar in 1998, although this situation came to an end in 2005, leaving the Ringgit to operate within a managed float against a number of major world currencies. The Bank Negara Malaysia often intervenes in the the financial market in order to maintain the trading-level stability of the Malaysian Ringgit, and has designated the currency to be non-tradeable outside the country.

MALAYSIA’S ECONOMIC BACKGROUND

The economy of Malaysia is on the rise, and is developing in industrialisation. The country’s economy is now the fourth biggest in South East Asia after Indonesia, Thailand and the Philippines, and it is the world’s 35th largest economy. The economy of Malaysia is one of the globe’s most competitive, and it is very diverse and robust thanks to the export value of its high-tech products, which stands at around $63 billion. Malaysia also exports large amounts of palm oil products, exporting the second greatest volume after Indonesia.

Malaysia has many natural resources, especially in the minerals, forestry and agricultural sectors. Its most valuable exported resource is petroleum, with tobacco, pineapples, pepper, cocoa, timber and rubber also being vital to the economy’s health.

Although the Malaysian government is introducing policies to increase the amount of income per capita to speed up the process towards making the country a high-income one by 2020, the growth within the country of wages and labour productivity is still slow. As central government revenues are highly dependent upon oil exports, the currency has seen volatile fluctuations, especially during the collapse of oil prices during 2015. In response, the government has stepped up its measures to increase revenue, and has introduced a Government Service Tax at a rate of 6% in order to reduce the deficit and meet the federal debt obligation.

FACTORS INFLUENCING THE MALAYSIAN RINGGIT’S RATE OF EXCHANGE

There are a number of factors known to have an impact on the Forex value of the Malaysian Ringgit. These include the following:

  • The flow of exports and imports into and out of the country
  • The flow of capital into and out of the country
  • The rate of inflation set by the Bank Negara Malaysia
  • The merchandise trade balance
  • The relative growth of the economy
  • The long-term and short-term interest rate differential
  • The cost of borrowing

 

FOREX BROKER ACCEPT MALAYSIAN LOCAL BANK
  1. FBS Forex
  2. Tifia Forex
  3. Lite Forex
  4. Just Forex

Adakah Modal Besar Memengaruhi Kejayaan Trader Forex?

Berapa besar modal awal yang perlu ada untuk trading? Apakah lebih besar lebih baik? atau kecil-kecilan saja tetap boleh untung? Pertanyaan serupa boleh jadi sering muncul dan jadi perdebatan diantara mereka yang jam terbangnya sudah lebih tinggi: Apakah besarnya modal memengaruhi kejayaan trader forex?

 

Trader Bermodal Kecil ataupun Besar Tetap Boleh Untung

Salah satu keuntungan trading forex terletak pada adanya Leverage. Leverage membuat trader yang mempunyai dana ratusan dolar boleh bertrading seolah-olah di tangannya ada uang ribuan dolar. Hal ini membuat siapa saja, dengan modal berapa saja, bisa ikut bermain forex dan mendapatkan profit.

Faktanya, kalau kita bicara tentang persentase profit, maka ada saja trader dengan modal pas-pasan atau malah sekedar hadiah kontes yang pertumbuhan balance-nya bisa mengungguli trader lain dengan modal lebih besar. Kunci kesuksesan trader bukan ada pada besarnya modal, melainkan pada kelihaian trader itu sendiri.

Akan tetapi, ada beberapa keuntungan tertentu bagi trader forex yang menyetorkan modal besar. Jika diasumsikan ada dua trader sama-sama berpengalaman, dengan Win Rate kurang lebih setara, tetapi satu bermodal besar dan satu lagi bermodal kecil, maka kelebihan-kelebihan di bawah ini bisa membuat trader yang bermodal besar mengeruk nominal profit lebih banyak.

 

Kelebihan Trading Dengan Modal Besar

  • Status VIP.

Sebahagian besar broker forex menyediakan akun khusus untuk trader dengan setoran dana besar di kisaran ribuan, puluhan ribu dolar, atau lebih.

Sangat tidak disarankan untuk mengincar status VIP di broker tak teregulasi atau teregulasi di negara offshore, karena apabila broker mengalami masalah maka bisa jadi Anda-lah yang paling awal gagal withdraw, sebagaimana kasus MFX Broker baru-baru ini. Salah-salah juga, Account Manager yang ditugaskan khusus untuk Anda nantinya malah memberikan saran menyesatkan. Bukannya untung malah buntung.

Namun, status VIP di broker dengan regulasi bonafid layak dipertimbangkan. Kenapa? Karena dengan status VIP, biasanya trader bisa menikmati spread atau komisi lebih rendah. Akan ditugaskan juga Account Manager khusus, sehingga ketika ada masalah maka bisa langsung kontak, tak perlu antri email atau chat. Selain itu, bisa jadi akan diberikan fitur-fitur khusus seperti bebas biaya deposit dan withdrawal, pemantauan akun lewat mobile, notifikasi Breaking News dari kantor berita terkemuka, dan lain sebagainya. Fitur-fitur apa saja yang tersedia untuk VIP bisa ditanyakan langsung pada Customer Service (CS) broker, sebelum Anda upgrade status akun.

 

  • Money Management Lebih Fleksibel.

Mudah untuk dipahami bahwa mengatur trading dengan dana ribuan dolar dalam akun tentu bakal lebih nyaman ketimbang dana ratusan dolar. Dan apabila Anda memiliki akun trading ber-lot Mini seperti yang lazim disediakan oleh broker forex lokal, maka jelas betapa tidak mungkin bertrading hanya dengan puluhan atau ratusan dolar saja.

Dengan dana besar, Anda pun bisa lebih bebas saat ingin membuka banyak posisi di saat bersamaan atau menggunakan bermacam-macam strategi trading di beberapa akun berbeda. Akun trading forex juga bisa lebih aman dari “panggilan Margin Call” saat pasar mendadak bergejolak (artinya: risiko lebih rendah), asalkan Money Management sudah tangguh sejak awal dan tak hanya mengandalkan dana yang besar saja.

 

  • Psikologi Modal Besar.

Mereka yang berani bertrading dengan modal besar umumnya ada dua kelompok. Kelompok pertama berisi trader pemula yang meski belum tahu apa-apa tetapi termakan promosi marketing sehingga menyetorkan dana besar sejak awal. Kelompok kedua berisi trader forex yang sudah menjalani proses belajar trading forex, mengalami banyak asam-garam dan memahami lika-liku bisnis ini, sehingga menyetorkan modal besar merupakan simbol kesungguhan untuk meniti karir hingga jadi trader sukses dan profesional.

Apabila Anda termasuk kelompok pertama, maka siap-siaplah menghadapi hangusnya dana. Namun, jika termasuk kelompok kedua, maka aspirasi itu merupakan komitmen yang bisa membuat seseorang menekuni dunia trading dengan lebih serius. Trading dengan dana kecil bisa dengan mudah diabaikan ketika bertemu kendala; tetapi jika telanjur menaruh modal besar, bakal lebih sulit untuk menyikapinya secara asal-asalan. Dari segi ini, modal besar bisa mendorong psikologi trader forex untuk gigih, hati-hati, dan pantang menyerah memperlakukan trading layaknya bisnis.

 

Seberapa Besar Dana Yang Siap Anda Pertaruhkan?

Dapat disimpulkan bahwa meski profitabilitas tinggi bisa dicapai oleh trader bermodal kecil maupun besar, tetapi ada beberapa keunggulan tertentu dari modal besar yang dapat memengaruhi kesuksesan seorang trader forex. Mengetahui itu, apakah kini Anda tertarik untuk menanamkan modal besar?

Tunggu dulu. Terlepas dari apakah besarnya modal memengaruhi kesuksesan trader forex, ada hal yang lebih penting lagi. Yaitu memastikan bahwa dana modal trading benar-benar uang yang siap dipertaruhkan –tentu bukan uang kuliah semester mendatang maupun uang cicilan kredit rumah bulan depan– atau dalam nasehat bahasa Inggris para master, “No more than what you can afford to lose“.

This Is Why Some People Trade – Rather Than Invest

Most of us invest but there are some people who prefer trading. Here’s why.

This quote from American economist Paul Samuelson sums up the difference between investing and trading – investing is for the patient… trading is for those who want more excitement as they search for profits.

Any kind of investable asset, whether it’s individual stocks, stock index ETFs, bonds, commodities or foreign exchange, can be held as a long-term investment or traded for short-term profit. The major difference has to do with how long you hold on to the asset.

Traders will buy an asset and hold it anywhere from a few seconds to a few weeks. Over the last decade or so, and thanks to the exponential growth in computing power, a growing number of traders – called high-frequency traders – hold positions for only fractions of a second. Some of these traders even make use of to automate their trades.Advertisement

All types of traders have one main objective – to make short-term gains on an investment, then sell it and move on to the next idea.

Different types of trading strategies

Some are momentum traders who look for assets that are making a major move up or down and have a large number of shares trading hands, or high trading volume. They hope the will continue, and they hold the asset until the price reaches a pre-set level – which can take minutes or an entire trading day.Advertisement

Technical traders look for patterns or trends in stock, bond, index or currency charts. They then make trades based on what those same patterns have done in the past. They may not know anything about the asset they’re buying or selling… their decision is only based on what the chart looks like.

The patterns may have names like a “double-bottom,” a “V-reversal,” a “head and shoulders top” or a “rounding bottom.”

Day traders are often technical traders – they may look at various charts and indicators before the markets open in the morning. They’ll then make trades throughout the day to try and profit from how they hope the chart will look later in the day.

Other technical traders will hold an investment for several days or several months. Investors will also use technical research to make long-term investment decisions, but they usually base the decision on long-term charts that show longer-term patterns, not just on what happened the day or month before.

There are also fundamental traders. They base their buy and sell decisions on an asset’s fundamentals – things like earnings, profits and debt levels. The short-term fundamental trader may buy or sell a stock based on what an upcoming company earnings report will say or an anticipated acquisition.

Since a change in company fundamentals can take time to significantly affect a stock price (although a surprise change in fundamentals, like when a company doesn’t make as much money as analysts expected, will have an immediate affect on the share price) fundamental traders often hold a position for several days or weeks.

Trading isn’t for everybody

Being a short-term, active trader can be a lot of work and very stressful. We’ve known quite a few bright people who thought they would do some day trading in the morning, make $1000 by noon and take the rest of the day off. But they soon discover that doing that day after day is not that simple – and you can just as easily lose $1000 by noon if you’re on the wrong side of a trade.

That said, many investors who do make a living as traders – but they know what they’re getting into. And that being a successful trader takes more hard work than luck.

Successful traders have three things in common: they choose one short-term trading strategy (like momentum, technical or fundamental, mentioned above) and stick with it, they take a disciplined approach… and they have nerves of steel.

Three keys to disciplined trading

A disciplined approach to trading involves the right mix of assets and knowing how to set your position size and .Advertisement

Many would-be traders put a lot of time into researching what stock to buy. But they hardly give any thought to how many shares they should purchase. Knowing your optimal position size is vital to a well-thought out investment strategy. The amount to buy should be determined, not by how much money you want to make, but how much money you can handle losing.

To help determine your position size, you also need to know your stop-loss levels. A stop-loss, or trailing stop, reflects the most amount of money you’re comfortable losing on an investment. So, if you don’t want to lose more than 25 percent of your position on a stock, you set your stop-loss price at 25 percent below the price you paid for the stock. So, if you paid $20/ share, your stop-loss level would be $15 ($20 – 25%).

As the share price moves higher, and you now don’t want to lose more than 25 percent based on the new higher price, you would establish a trailing stop level. So, if that $20 stock has moved up to $25, your trailing stop level would be 25 percent below that – or $18.75 ($25 – 25%). If the price goes to $30, your trailing stop would be $22.50, and so forth.

Now, you can use your stop-loss target to figure out your position size.

Let’s say you’re buying the $20 stock and you couldn’t handle it if the share price dropped below $17. So, $17 would be your stop-loss level.

Now, consider how much of a paper loss (that is, how much it’s gone down on paper, before you crystallize the loss by selling the position) you can handle. With a $100,000 portfolio, you may feel that a $2000 loss will make you nervous. So, simply divide $2000 by that $3 per share loss you decided you could tolerate ($20 – $17 = $3), and you get your position size. In this case, that would be 667 shares.

Here’s the basic formula (this is just one out of dozens available) and a table to illustrate:

(Maximum $ Risk)/ (Current Stock Price – Stop Price) = Position Size

To Calculate Position Size

1. Portfolio Value 2. Loss Tolerance 3. Maximum $ Risk (3) = (1) x (2) 4. Current Price 5. Stop Price 6. Position Size
(6) = (3)/ [(4) – (5)]
100,000 2% 2,000 20 17 667

www.truewealthpublishing.asia

Asset allocation and risk management

The other part of being a disciplined trader is to know what asset allocation is best for you. Asset allocation refers to the mix of stocks, bonds, cash and other assets in your portfolio. Some say asset allocation is the number one factor affecting investment returns.

For instance, it’s a terrible idea to use all your savings to “play the market” as a trader. The prudent thing to do would be to just use a portion of your overall portfolio to trade – and leave the rest as a mix of good long-term investments, like dividend paying stocks, bonds, cash and some gold.

For the portion you do want to use to trade with, make sure you spread your exposure around a few different sectors. For example, you probably wouldn’t want to just trade energy company shares or make short-term foreign currency trades. Instead, get familiar with a few different sectors so you can make informed trades in any of them. That way, if one sector tanks your entire trading portfolio won’t go down the drain.

And even if it does, because you’ve “diversified your assets” by having the rest of your portfolio in long-term investments, it will be a little less painful.

This article was sponsored by . All views expressed in the article are the independent opinion of Truewealth Publishing.

Forex Trading in Malaysia

Welcome to Forex Malaysia, the first website dedicated to forex trading in Kenya. For those of you who are not familiar with the forex market, it is enough to say that forex stands for ‘Foreign Exchange’ and it represents the trading of currencies one against another. By trading on the forex market, Kenyans can make money by correctly guessing which currency is going to raise and which one is going to fall.

 

How does forex trading work?

To easily explain how forex trading works we will give you a simple example. Let’s consider that you bought 10,000 US Dollars in January 2015 at the rate of 90.75 Kenyan Shillings for one dollar. You paid a total of 907,500 Kenyan Shillings (KES). After holding the US Dollars (USD) for six months you decided to sell them in July 2015 at the rate of 100 KES per USD. You would have gotten exactly 1 Million Shillings and made a profit of 92,500 Shillings in six months, since you bought the dollars cheaper than you sold them.

This is how you make money by trading currencies. In the above example you probably saw that you needed 10,000 dollars to make a profit of about 1,000 in six month. That’s a lot of money and a lot of time, but don’t worry, there are ways to overcome this issues very easy.

Forex Brokers and Leverage

Trading forex is done through a forex broker. The broker is a specialized company that creates the perfect environment for traders to take advantage of the currency fluctuations in no time. Opening an account with a forex broker will allow you to trade on the international forex markets with huge amounts of money and make profits much faster. How is that possible? Through leverage.

Forex brokers offer leverage in order to allow their clients to trade high amounts of money. A broker that gives you a leverage of 1:200 allows you to trade 200 dollars for every dollar you have on your account. If you make a deposit of 100 USD you are able to trade worth of 20,000 USD because of the leverage effect. Why is the broker allowing this? Because he knows currency markets move very slow, and in order to be able to make significant profits in short intervals of time you need to trade with lots of money.

Here is another example to explain why the broker gives you leverage. Let’s consider the currency pair EUR/USD, the most traded currency pair in the world. At the time of writing this article, the rate for EUR/USD is 1.1031 which means that one Euro costs 1.1031 US Dollars. In order to buy 10,000 Euros you need to pay 11,031 US Dollars. Let’s say a trader buys 10,000 Euros through his forex broker at the above mentioned rate, and two days later sells them at 1.1131 (a difference of 100 pips which means a movement of only 0.9% which happens frequently in a two days period). Our trader would make a profit of exactly 100 USD with this trade (notice that for the EUR/USD currency pair, one pip equals one dollar when trading 10,000 – the ‘pip’ is the fourth decimal of the rate). Since he made a profit of $100 in two days the broker knows that his risk is also limited in a two days period, and even if he loses he can’t lose too much. If the trade would have gone the wrong way in the same amount, he would lose $100 only. This is why the broker is willing to allow the trader to buy 10,000 Euros while depositing only 100 dollars. In the worst case scenario when the trade goes bad and the loss gets to 100 dollars the broker will automatically close the trade and limit the loss to the total deposit.

To make a long story short, leverage is given by the brokers in order to help traders make bigger winnings at the risk of higher losses in shorter times. That means, trading more. The more you trade, the better it is for the broker, because of the so called ‘spread’, which is the difference between the buy and sell price of each currency pair. The best part is that forex spread are very low because competition among forex brokers pushed them to lower the spreads to be more attractive to clients. A typical spread for EUR/USD is 3 pips, which means the broker charges only 3 dollars for a trade worth 10,000 Euros. In the above example when our trader won $100, the market moved 103 points for our trader to make a profit of 100 dollars and the broker a profit of 3 dollars (this is because of the 3 pips difference between the buying and selling price).

Forex Brokers in Kenya

Unfortunately there are no reliable forex brokers in Kenya right now, so the only option Kenyan traders have to profit from the forex market is to use an offshore broker (a broker from a foreign country). Luckily for us, there are many international brokers that accept traders from Kenya and where you can easily deposit and withdraw money. You can open an account online in less than five minutes and deposit money with your debit card or other online payment methods such as Skrill, Neteller, Webmoney, Cash U, Paysafecard and many more. Of course, you can also deposit with bank transfers if you want to make larger deposits or withdrawals.

After checking the largest forex brokers in the world I have selected the ones that are most friendly with Kenyans and have the best trading conditions as well as the most accessible deposit and withdrawal methods.