Forex Trading in Malaysia – Here is the gist of it!

Forex trading is one of the most popular trend in the global market. It is also called foreign exchange trading or FX trading. It is a form of a decentralized market in which all types of foreign currency can buy or sell currency. It is the largest and most liquid market in the world. The average daily trade volume exceeds $5 billion. This is such a huge figure that even if you combine the trading volumes of all the stock exchanges globally they would not even come close to this figure. But the question that you most likely have on your mind is, what does this have to do with you? You would be surprised at the boundless opportunities that the market has for you as an individual.


Exchange rates

With the right tools even you, an average person, could tap into the 5 trillion dollar market with the right knowledge and the right tools. If you travel to other countries abroad then you have surely done a forex exchange. For example if you travel to France from Malaysia then you will have to change your Malaysian Ringgits for Euros. At the time of exchange, the ongoing rate of exchange will determine the amount of euros that you will get for your dollars. These exchange rates fluctuate rapidly depending on several factors. On one day your Ringgit could get you 0.89 euros but on the next it could get you 0.91 euros. On a smaller scale this may not seem like a lot but on a bigger scale it could add up. Say for example a multi-million dollar company wishes to pay its employees overseas. The small amounts could add up to larger ones. In this case you might prefer to hold on to your money till the exchange rate is more favorable.


Your opportunities

You could buy and sell currency just like you can buy and sell stocks. This will be based on your opinion of where the value lies. The difference is with foreign exchange you can very easily trade down. If you think another currency is increasing you could use your Malaysian Ringgits to purchase it and then keep the currency. If you think it will decrease in value you could sell it. The biggest advantage with the foreign exchange market is that it is so huge that you will easily find a person that can purchase your currency.


To know about the fluctuations in the values of the currencies that you are trading in, you should have your ear on the ground. If you hear like on the news that a country like china is devaluing its currency in order to attract more international business, you could then sell your currency or trade it for another currency on the rise like the U.S dollar. The more the currency of China devalues against the American Dollar the more profits you make. If the Chinese Yen then increases in value while your position is still to sell, then you start making losses and these will inspire you to get out of the particular trade.


Is Forex trading legal?

Therein arises a question, it is legal to conduct foreign exchange in Malaysia? The answer to this is yes. There are a number of registered traders with whom you can trade with legally. If you want to know all the exchange brokers, you can simply google forex traders in Malaysia and you will get the comprehensive list of the same. All the forex trading companies in Malaysia have to be registered by the Negara Bank. There are some rules that restrict the trading and one of them is the Islamic rules in the country. You should preferably open an Islamic account. If you trade with a broker that is not registered then you will be breaking the law as this is illegal. Read the Islamic Financial Services Act 2013 or the Financial Act 2013, to get a better grasp of how the trade can be done.



The main restriction is the law governing the foreign exchange. There are a couple of grey areas such as the Negara Bank seems not to trade with Malaysian Ringgits and can only work with foreign currency.


How to overcome

To begin with, it is recommended you open an Islamic account if you are using the Bank of Negara. Find Malaysian Forex traders online for tips on how they trade.



Forex Malaysia is one of the largest markets in the globe. Averaging larger amounts daily than the entire annual budgets of numerous countries. If you are in Malaysia you have a chance to tap into this market by following the above tips.