Traders in Malaysia are best-served trading with well-regulated international Forex brokers.
I have compiled a list below of the best brokers operating in Malaysia, including detailed assessments of each and an explanation of what brokers offer and tools you can use to pick the best broker for your needs. Read on to find out more.
- Octa, A commission-free broker with a proprietary copy trading service.
- FXTM, Best all-around broker with high floating leverage and fast execution.
- Pepperstone, Great ECN execution on MT4/5, cTader, TradingView and Pepperstone proprietary platform.
- Axi, Spreads starting from 0.0 pips + leverage up to 1:500.
- FP Markets, ECN trading with leverage up to 1:500.
Forex Broker Malaysia Comparison
| | | | | |
Regulators | CySEC, FSCA, MWALI International Services Authority | CMA, FCA, FSC Mauritius, FSCA | ASIC, BaFin, CMA, CySEC, DFSA, FCA, SCB | N/A | ASIC, CMA, CySEC, FSCA |
Year Established | 2011 | 2011 | 2010 | 2007 | 2005 |
Execution Type(s) | Market Maker | ECN/STP, Market Maker | No Dealing Desk, NDD | ECN/STP, Market Maker | ECN/STP |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 0.9 pips | 0.1 pips | 1.1 pips | 1.2 pips | 1.2 pips |
Average Trading Cost GBP/USD | 1.3 pips | 0.2 pips | 1.4 pips | 1.3 pips | 1.4 pips |
Average Trading Cost Gold | $0.30 | $0.18 | $0.15 | $0.16 | $0.16 |
Trading Platform(s) | MetaTrader 4, MetaTrader 5, Proprietary platform | MetaTrader 4, MetaTrader 5, Proprietary platform | Other, MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Trading View+ | MetaTrader 4, MetaTrader 5, Web-based, ATpro platforms | MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based |
Islamic Account | |||||
Negative Balance Protection | N/A | N/A | N/A | ||
| Visit Website | Visit Website | Get Started Visit Website75-95% of traders on margin lose | Visit Website | Visit Website |
Octa
In Summary A commission-free broker with a proprietary copy trading serviceI rate Octa as one of the best Forex brokers in Malaysia due to its low trading fees, starting from 0.6 pips or $6.00 per 1.0 standard round lot, swap-free trading for all traders on many assets, and the four-tier status program that lowers trading fees for active traders. It makes Octa ideal for algorithmic and long-term traders. Octa is also an excellent copy trading broker, featuring its in-house copy trading service and mobile app, with 40M+ trading accounts.
Octa has a $25 minimum deposit requirement, a 50% withdrawable deposit bonus, and a 19-minute average withdrawal processing time for most withdrawals.
Pros & Cons
- Quick withdrawals and deposits
- 0% commission and no overnight charges
- Space with personalised trading ideas
- Customer Support 24/7
- Mobile copy trading services available only for Android
FXTM
In Summary Best all-around broker with high floating leverage and fast executionFXTM was established in 2011 and has since quickly grown to serve 2 million customers. As a Malaysian Forex trader, you can feel secure knowing that FXTM is under the jurisdiction of a reputable regulatory body, the Cyprus Securities and Exchange Commission (CySec) and that it holds a Cyprus Investment Firm (CIF) license. Most importantly, FXTM holds clients’ funds in segregated accounts with top-tier banks separate from the company’s operational funds. If you are a short-term trader in Malaysia, you’ll be pleased with FXTM’s ultra-fast trade execution with an independently audited average of 0.1 seconds per trade. If you are a new Forex trader in Malaysia, FXTM offers trading signals that you can follow through MetaTrader.
Pros & Cons
- Excellent commission-based Forex pricing environment and transparency
- Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
- Quality market research and educational content for beginner traders
- A highly regulated broker with a tier-1 license
- Limited choice of commodities
Pepperstone
In Summary Great ECN execution on MT4/5, cTader, TradingView and Pepperstone proprietary platformI rank Pepperstone among the best Forex brokers in Malaysia for traders seeking a cutting-edge upgrade to the MT4/MT5 platforms, as Pepperstone features the 28-plugin Smart Trader Tools package and Autochartist. Traders also benefit from a well-balanced asset selection, including CFDs on Forex indices, cryptocurrencies, and ETFs. VPS hosting ensures 24/5 low-latency Forex trading.
Pepperstone is also a leading copy trading provider with embedded MT4/MT5/cTrader services, Signal Start, Copy Trading by Pepperstone, and DupliTrade. Pepperstone also connects social traders with 50M+ peers to TradingView.
Pros & Cons
- Excellent choice of trading platforms consisting of MT4/MT5, cTrader, TreadingView and Pepperstone Platform
- Market-leading MT4/MT5 upgrade package, Autochartist, and API trading
- Social trading support via Signal Start, MetaTrader Signals, Copy Trading by Pepperstone, DupliTrade
- Leverage of up to 1:400 depends on jurisdiction and superb trade execution
- Demo accounts have 60-day time limits
Axi
In Summary Spreads starting from 0.0 pips + leverage up to 1:500Pros & Cons
- No minimum deposit and high leverage for most international traders
- Autochartist plugin for MT4 and API trading for algorithmic traders
- AI-powered third-party trading analytics platform PsyQuation
- Excellent trading costs and social trading plus educational resources in 24 languages
- Limited asset selection
FP Markets
In Summary ECN trading with leverage up to 1:500fpmarkets is an ASIC-regulated Australian brokerage which launched in 2005. For most traders, the unique selling point of this broker is in the extremely wide range of tradable assets offered, providing the opportunity to trade over ten thousand individual stocks and shares including publicly quoted Hong Kong and Australian companies. Ffpmarkets also offers 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin. fpmarkets offers an unusual hybrid ECN/STP execution model, meaning their clients can choose between ECN style of execution giving a very high level of speed, and a “straight through processing” execution style which allows for more “natural” spreads.
Pros & Cons
- Choice of trading platforms and auxiliary trading tools
- Very competitive cost structure and excellent asset selection
- Low minimum deposit requirement and leverage of up to 1:500
- Well-regulated and trustworthy
- Availability of Iress geographically restricted
How to Choose the Best Malay Forex Brokers?
To choose the best trusted Forex broker in Malaysia, it is worth beginning by looking at the regulatory framework. There are two categories of regulations for Forex brokers in Malaysia: the first category is brokers regulated domestically in Malaysia; the second category is brokers that accept Malaysian clients but are regulated outside of Malaysia. I believe by far the best range of choice available comes from internationally regulated brokers rather than domestically regulated Malaysian brokers. Almost all international brokers also offer Islamic broker accounts which claim to be sharia compliant.
Domestically Regulated Senarai Brokers
The Securities Commission Malaysia (SCM) regulates all matters relating to the financial markets in Malaysia. Underpinning the SCM’s activities is the ultimate responsibility of protecting the investor. The SCM first issued a licensing scheme in 2007 and subsequent guidelines in 2018.
The SCM has made it easy for anyone to verify the SCM authorization through an online portal. You can search here for a firm’s name to see if they are authorized by the SCM.
Internationally Regulated Brokers Accepting Malaysian Resident Clients
Countries with active financial markets have regulatory bodies, and some regulate Forex brokers more strictly than others. Top regulatory bodies include the UK’s Financial Compliance Authority (FCA), various EU-based regulators such as in Cyprus and Ireland, the Australian Securities & Investments Commission (ASIC), and New Zealand’s Financial Services Provider Registry. These jurisdictions have safeguards to help protect client assets, including requiring brokers to disclose how they hold client funds.
How to Verify SCM Authorization?
In Malaysia, the Securities Commission of Malaysia (SCM) expands and regulates the domestic financial system, including Forex trading. Given the high demand for Forex brokers from Malaysian residents, who are often young, tech-savvy, but financially inexperienced, scammers attempt to undertake fraudulent activities. Trading with a regulated broker can minimize the risks of loss and unethical business practices.
Here is how Malaysian resident Forex traders can verify SCM Authorization:
- Check the broker’s website for a license number, which is usually listed in the footnote of the home page
- The SCM issues two licenses, the New Capital Markets Services License (CMSL) or the New Capital Markets Services Representative’s License (CMSRL)
- Traders should cross-reference the license number with the Public Register of License Holders available on the SCM website, where the SCM lists all current and former licensed intermediaries and representatives
- The regulatory history is equally important, and traders can contact the SCM for specific details
Noteworthy:
- Malaysian traders may trade with licensed international brokers, where favorable trading conditions exist
- Islamic accounts are widely available
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.
Do You Have to Pay Tax on Forex Trading in Malaysia?
Forex traders in Malaysia should consult a licensed professional to receive the most up-to-date information, pay what they owe to the government, and ensure they record their Forex income accordingly.
Malaysia considers Forex income as income tax, but capital gains tax from Forex trading is tax-free. Therefore, if trading does not result in income, it could remain tax-free. Since most profitable traders trade Forex for a living, they are likely to pay income taxes, where an eleven-tier tax bracket levies taxes between 1% and 30%, with 0% taxes on income below 5,000 MYR. Non-residents pay a flat tax of 30%. An accountant can assist Forex traders in navigating the Malaysian tax law and advise on how to proceed, given the tax complexity between income and capital gains, plus possible exemptions.
What is the Best Time to Trade Forex in Malaysia?
Forex traders in Malaysia, just like traders around the world, must consider whether their time zone and daily routine fit with the best times of the day to trade the Forex markets.
Although the Forex markets are open 24 hours a day, 5 days a week, certain times of day are more active with more trading volume flowing through the market.
The most active time of day with the heaviest trading volume is the U.S./London markets overlap from 1 p.m. to 5 p.m. GMT (9 p.m. to 1 a.m. Malaysian Standard Time, or MST). Most traders consider it the best time of the day to place trades, especially intraday trades.
Advantages & Risks of Forex Trading in Malaysia
Before beginner traders start trading Forex, they should clearly understand the risks as well as the potential advantages in trading Forex.
Advantages of Forex Trading in Malaysia:
- Lower capital entry requirements / minimum deposit compared to stock trading.
- Forex markets are open 24/5, allowing retail traders the flexibility to trade part-time while having the time to hold a regular job.
- High liquidity of the Forex market creates many trading opportunities for all strategies across time frames
- Algorithmic trading is available through market-leading trading platforms like MT4 or cTrader available from most brokers.
- Social trading provides another way for beginner traders to get involved in Forex trading through their mobile phones, a widely popular approach in Malaysia.
Risks of Forex Trading in Malaysia:
- Trading without a reliable edge will always result in loss of account over the long term.
- Unrealistic expectations are encouraged by overly aggressive marketing.
- Insufficient trading capital creates insignificant returns / dangerously high-risk appetite / overly leveraged trading. Minimum deposits required by brokers do not necessarily equal adequate levels of capital.
- Poor risk management.
- Lack of portfolio-building strategy via monthly deposits.
- Lack of realistic trading education will result in bad trading habits.
How Can a Beginner Start Forex Trading in Malaysia in 5 Steps?
Getting started with Forex in Malaysia remains a hassle-free process, open to all individuals 18 years and older who can afford to meet the minimum deposit required.
- Beginner traders should start by educating themselves to understand the Forex market. Many high-quality and free educational courses are available online, including from some Forex brokers. Attend free seminars in Malaysia hosted by international Forex brokers, if possible, to learn more about their offerings.
- Carefully examine the trading cost structure of your shortlisted Forex brokers, where major currency pairs should usually be offered at a spread between $4.00 and $8.00 per 1 standard lot.
- If you are interested in algorithmic trading, make sure you choose a broker offering a cutting-edge trading platform, ideally from a user-friendly mobile app such as are provided by market leaders MT4 and cTrader.
- Practice trading on a demo account and ensure you are profitable over 6 months before opening and funding a real money account.
- Opening and funding a real money trading account completes the process, and this is usually a simple step that your chosen Forex broker will be happy to guide you through.
Bottom Line
Forex brokers can give Malaysian traders excellent regulation and trading conditions, whether regulated internationally or domestically by the SCM.
Choose a Forex broker with segregated accounts for client funds, a trading platform that you enjoy using and lets you trade all the markets you want at reasonable spreads and commissions.
If you’re new to Forex trading, always start with a demo account until you are profitable over many months. Then you will be ready to start trading a small live account, which you will probably find feels very different, which may bring new challenges. Slowly build up your account size as you become more profitable.
