Best Forex Brokers in Malaysia 2024

AvaTrade is a market-making broker that offers forex and CFD instruments.

1) Safety: AvaTrade holds a license to operate from the tier – 1 financial authority ASIC of Australia.

Additionally, AvaTrade is licensed/regulated by the Central Bank of Ireland, Polish Financial Supervision Authority, British Virgin Islands Financial Services Commission, Financial Services Agency of Japan, Financial Sector Conduct Authority of South Africa, Abu Dhabi Global Markets (ADGM) Financial Regulatory Services Authority (FRSA) of United Arab Emirates.

2) Fees: AvaTrade charges an average spread of 0.9 pips for trading the EURUSD currency pair using the retail account. They do not charge a commission. Further, they do not charge a deposit or withdrawal fee however their inactivity fee is high.

3) Trading Conditions: Overall, AvaTrade offers more than 250 trading instruments. Traders can access 60 currency pairs, ETFs, bonds, shares, major indices, and cryptocurrencies. They offer a wide variety of trading platforms including MT4, MT5, WebTrader, AvaOptions, AvaTradeGO, automated trading platforms, and Mac Trading. They also offer negative balance protection.

4) Customer Support: Customers can reach AvaTrade through live chat, phone call, or email. Each of their customer support modes are available in Malay. They offer a local Malaysian phone number that can be called.

How to Choose the Best Forex Broker in Malaysia?

While choosing a forex broker, it is important to carry out your own independent research. Each forex trader has its own requirements. No particular forex broker is suitable for everyone. Here are the main factors that you should consider while choosing a forex broker.

1) Dealing Desk or No Dealing Desk: There are two kinds of brokers which are Dealing Desk brokers and No Dealing Desk brokers. They may also be known as STP brokers or market maker brokers respectively.

STP brokers do not have a conflict of interest with their traders but they may charge higher fees. Market-making brokers may have a conflict of interest but they may charge lower fees.

Generally, the forex brokers that are ECN or STP mention it on their website under the execution policy. Also, no dealing desk forex brokers will offer variable spreads & commission-based trading accounts

Let’s take HotForex for example. They claim to be an STP broker & they charge variable spreads with their account types. But XM is a market maker forex & CFD broker, and they also charge variable spreads, but they don’t have any ECN type account.

A good way to check this is to ask your forex broker via Live chat if they are STP or a market maker.

2) Regulation: There are no approved forex brokers in Malaysia. All the forex brokers that are onboarding Malaysia users are operating without a local license, since forex trading by retail investors is not regulated.

Still there are estimated to be over 100,000 traders in Malaysia, and these traders trade through foreign CFD brokers, which is risky & unregulated. You should wait until there is a local regulation to avoid trading through foreign CFD brokers.

For researching, we looked at the licensed held by the foreign forex broker who are popular in the region. Most of the major ones have one or more licenses from Tier-1 & Tier-2 regulators, which are FCA, ASIC, CySEC (not major but still accepted), FSCA, DFSA, FMA & others.

While checking a broker’s regulation, you should ensure that they (or the broker group’s entities) are regulated by reputed financial authorities. The top financial authorities in the world (which are also called tier-1 financial authorities) are the FCA of the UK and the ASIC of Australia.

To check regulations, you should visit the website of the forex broker and read their regulations page. Once you know the license number, you can also cross-check the license on the website of the financial authority. For example, you can see Octa’s regulations on this page, and they can be cross-checked on CySEC’s website.

Note that only have license with CySEC is not enough as this is not considered a regulator with high trust score. If the broker is licensed by FCA, ASIC, then it is considered to have a higher trust factor based on our research.

3) Fees: Every broker will usually have a page on which they display the typical spread that they charge for various instruments. You should always check the average spread for the EURUSD currency pair since it is considered the benchmark. You can then compare their average spread with other brokers.

Here is an example of the spread charged by Octa as found on their website.

While checking the fees, you should also check the exact fees that your broker will charge you for deposit & withdrawals, and for inactivity.

For example, below is the screenshot from a popular CFD broker’s website, where they mention the fees & minimum for various payment methods.

The broker in the example above does not charge any extra fees when you make a deposit, or during withdrawals via local payment methods. But it is not uncommon for forex brokers to charge fees during withdrawals.

Most forex brokers may not charge you during deposits, in order to encourage you to fund you trading account. But during withdrawals, they would charge you payment gateway fees, currency conversion charges or what not. All these charges can add up & make your trading expensive.

Some brokers even charge you for inactivity. For example, if you have not logged into your trading account for a few days, then your broker would deduct money from your account balance. That is why you should search first or ask your broker if they charge any fees for inactive or dormant trading accounts.

Below is the screenshot from Pepperstone’s website. They clearly state in their FAQs that they don’t charge any fees for inactivity.

But there are many other forex brokers that are not so lenient, and they charge excessive penalties for inactive accounts, all of which will be deducted from your account equity.

4) Trading Conditions: Each forex broker offers different trading conditions. A few factors that a trader should check are trading instruments offered by the broker, the trading platforms available, the different types of trading accounts, the leverage offered, the deposit and withdrawal methods available, and the minimum deposit.

For example, if you want to trade cryptocurrencies, then you should check whether a broker offers CFDs on cryptocurrencies before you sign up with them.

You should also check the exact fees charged with the instrument which you want to trade. If you are only looking to trade majors, then compare the CFD brokers based on their fees for each major pair.

Traders can find the information on the available CFD instruments on the broker’s website. The information is generally made available by the brokers under ‘Markets’ or ‘Trading Instruments’ where they list different asset classes.

For example, Tickmill list all the forex pairs that they offer, and mention the trading conditions (spreads, swap charges, trading hours etc.) for each instrument.

You will see in the screenshot below, that Tickmill have mentioned that their typical spreads for trading EUR/USD is 0.1 pips. But they did not mention for which account are these spreads valid. They have 3 account types which Malaysia clients can open.

Another important aspect to consider is the account types available. Does the forex broker offer Islamic accounts as well? For example, you should choose the account type by considering your trading volume & instruments.

Let’s say that you mostly trade GBP/USD, and trade 1 Standard lot on average in a day. Such a trader should choose an account with lower spreads, because the fees will be quite high if you are still trading on a Standard or a Cent Account.

For example, if the spreads for GBP/USD with Standard Account were 1.5 pips, then you are paying $15 for trading a Standard Lot. But if your forex broker has a lower commissions account, with 0.1 pips spread & $7 commission for roundturn, then your typical trading charge would be $8 per lot.

In this above example, the Trader trading on a Standard account, would pay very high fees to their forex broker. Therefore, you must consider which trading accounts are being offered by your forex broker, and what are the conditions of contracts for each CFD instrument.

You must also find out whether your forex broker offers negative balance protection or not. This is very important so that you don’t owe any money to your broker in case your account goes into negative.

The above is an example from FxPro. They state in their policies & FAQs, that they offer NBP for retail traders. So, even if your balance goes into negative from some trade, it will be reset back to zero.

That is why you must check the terms carefully before signing up with any forex or CFD broker. There have been incidents in the past where the client accounts with brokers went into negative, and the brokers asked them to pay it.

But the regulators have made it mandatory in most jurisdictions now, that CFD brokers must offer NBP.

5) Language: Even though not every forex broker offers their services in Malay, there are some who do. If you want to avail of brokerage services in Malay, then you need to check which brokers offer such services. You should also check whether their customer support is offered in Malay.

6) Customer Support: It is crucial that a forex broker provide good customer support. Issues with trading can be serious and it can be difficult to navigate the services offered by a broker. To check customer support, read reviews posted online.

You can also get first-hand information by asking a broker’s support team a few test questions. Pay attention to how quickly they respond to your queries and how helpful their response is.

Which Forex Brokers are regulated in Malaysia?

Securities Commission Malaysia is the local regulator, and they have not issued license to any retail forex brokers to accept clients in Malaysia. All the forex brokers that are listed above are not legal in Malaysia.

This guide is only for education. Any trader who is actively trading forex via offshore brokers should be aware of their risks & legality. In case of any issues, the regulatory protection would not be available, since these brokers are unregulated.

The regulator has also warned against these unlicensed forex/derivative brokers dealing in Malaysia, and this list includes all the offshore forex brokers like Octa, HFM, Tickmill etc. By choosing to open account with any of these brokers, you are accepting the risk yourself.

How do Forex Brokers make money?

Forex Brokers charge their clients fees, which can be spreads, commissions per lot on your trading volume, inactivity fees, withdrawal fees.

For all your trading activities, your broker gets a cut from it. Some market maker brokers may even be dealing against you, so for all the losses that you make, your broker earns that money.

But if a forex broker is a non-dealing broker, they would make money from spreads & commission. For example, if Broker A is charging you 1 pip spread for USDCHF, they for every 1 million USD traded (or 10 standard lots), the broker will make USD 100.

Is it Legal to trade Forex through brokers in Malaysia?

No, since none of the foreign forex brokers are regulated under the local jurisdiction in Malaysia. Therefore, it is the responsibility of the trader, and your own risk.

Generally, when you open your real account with any forex broker from Malaysia, you will find that their entity is under offshore jurisdiction. By no means is your account being opened under the oversight of any local regulator, and this creates a counter-party risk.

Most offshore brokers are listed on ‘Investor Alert List’ issued by SC of Malaysia. Therefore, investors are advised to not use any of these brokers for forex trading.

If you do decide to trade forex, remember that it is not legal to do so.

Frequently asked questions: Best Forex Brokers