Forex Trading In Malaysia – A Guide For Newcommers

Published:Nov 17, 202309:42
Forex Trading In Malaysia – A Guide For Newcommers
Stock Market Chart. 2d illustration|

Financial security is one of the basic needs of humanity, yet reaching its sustainable level is rather challenging, making the work-life balance almost impossible. One of the best solutions against such an injustice is Forex trading, as it will take your income to a new level, and let you finally live your life, not just work it. 

Forex trading is a time-proven way to improve the financial stability of everyone involved. It is widely spread all over the world, yet, it is just gaining its position in Malaysia.

If you are a resident of Malaysia and want to try your hand at Forex trading, prepare for a journey into its basics. 

What is Forex Trading?

Forex, or foreign exchange, deals with currency trade based on its exchange rate fluctuations. When you are not a trader, you are worried every time your financial savings lose their value; when you are a Forex trader, all the changes are playing on your side, if you predict them correctly. 

The foundation of every forex operation is the currency pair - a quotation of two currencies, whose value is quoted against each other. The first currency is the base currency, and the second is the quote currency

Examples of currency pairs are USD/EUR, USD/MYR, AUD/USD, MYR/EUR, etc. 

When you buy a currency pair, you buy the base currency, when you sell the pair, you sell the base currency and get the quote currency.  

Forex trading requires sound knowledge of the financial system of a particular country and the world, awareness of global events, analytic skills, and cooperation with broker terbaik forex, as their guidance and advice are decisive at the beginning of your way. 

Forex Trading Example

The Malaysian national currency is the Malaysian ringgit (MYR). The current quote for the USD/MYR exchange rate is 4.64 Malaysian ringgit to 1 US dollar. 

If the analysis of the market shows signs of a further increase in the rate, you can buy 1000, 000 USD against MYR at that 4.64 rate. 

If the rate increases to 4.67, the trading profit will be:

100,000 USD x (4.67-4.64 MYR/USD) = 3,000 MYR

The further calculation will show the profit in USD:

1,000 MYR ÷ 4.67 MYR/USD = 642.39 USD

If the prediction was wrong, and the USD/MYR rate decreased to 4.62, there will be a 100,000 USD x (4.62-4.64 MYR/USD) = -2,000 MYR

When converted into U.S. dollars, the loss would be:

-2,000 MYR ÷ 4.64 MYR/USD = -431.03 USD

How to start Forex Trading in Malaysia?

  1. Fundamental knowledge

Leverage, bids, asks, charts, technical analysis, fundamental analysis - these are just a few basic terms you need to understand to get started. Take your time a prepare for the trade, learn the patterns, and analyse the behaviour of the currencies on the market. A deep understanding of Forex isn’t only limited by the financial environment. Make sure you are aware of the world news regarding economics, geopolitics, history, etc. The better understanding of the world you have, the more chances you have for a better analysis of the market.

  1. Copy Trading

Copy trading is quite a common strategy among beginners. It allows one to copy trades of experienced traders at the beginning of the forex venture. While following their patterns, the beginner can learn all the ins and outs of the process, and feel more comfortable while participating in trades. 

  1. Demo account

Once learning the basics, everyone wants to get started, however, the initial trades are always risk-involved. Therefore, reputable forex brokers in Malaysia offer a demo account, which works like a dress rehearsal before the main performance. All the trades will be risk-free and every participant will have a chance to compare the functionality of the available platforms and the brokers. After experiencing the features of all the trials, everyone can choose the most suitable platform. 

  1. The broker

The choice of the broker is the most important part of the trading experience. It must be registered and authorized by the Securities Commission Malaysia (SC), as they are responsible for regulating all the financial markets within the country. The commission’s regulations include:

  • Minimum capital requirement - RM 5 million;
  • Client fund protection - the brokers must ensure the safety of clients' funds, excluding the possibility of their unauthorized usage;
  • Fair trading processes;
  • AML/CFT compliance - Malaysia’s Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) regulations;
  • Disclosure policies - the clients should have access to the information relevant to their trading account;
  • Complaints handling.

The bottom line

Forex trading is one of the best ways to earn a living nowadays and build sustainable wealth in the long-term perspective. Forex is undoubtedly risky like every other kind of performance connected to money. However, with a consistent approach and careful research, you will learn all the details of the process, get to understand all the movements within the market and make your money. Don’t put off a better future, join the Forex trade and open your financial freedom. 

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