75-90% of retail traders lose money trading Forex and CFDs. You should consider whether you understand how CFDs and leveraged trading work and if you can afford the high risk of losing your money. We may receive compensation when you click on links to products we review. Please read our advertising disclosure. By using this website, you agree to our Terms of Service.

EditorEditor: Alison HeyerdahlUpdated: June 3, 2024
AuthorAuthor: Chris Cammack

Last Updated On June 3, 2024

Chris Cammack

Over the last decade, Forex trading has become more accessible to the average person in Malaysia. Nationwide access to the internet and an influx of international “offshore” brokers joining the local scene have increased competition. However, very few international brokers are regulated locally by the Securities Commission of Malaysia, (SCM) in Malaysia. As a result, Malaysian traders have to resort to trading with reputable offshore brokers.

When choosing a Forex broker, it’s important to consider not only the financial aspects but also the personal fit. We thoroughly reviewed all Forex Brokers catering to Malaysian clients. Your feedback is an important part of this evaluation, and we always incorporate the views of real traders when we make a recommendation. Based on our research, we have selected the top options for traders of all budgets and preferences.

These are Best Forex Brokers for Malaysia in 2024, as recommended by our experts. 

1

Pepperstone

Best ECN Trading Execution

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2

Octa

Low Trading Costs & Copy Trading

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3

Tickmill

MT4 Broker with the Lowest Trading Costs

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4

AvaTrade

Best Mobile Trading Forex App

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5

XM

MT5 Broker with the Lowest Spreads

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6

FP Markets

Best ECN Pricing

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7

IC Markets

Low-Cost Trading Across Popular Platforms

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8

HFM

Highest Leverage

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9

Admirals

Best MT4 and MT5 Trading Tools

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10

Fusion Markets

3 Copy Trading Platforms, No Minimum Deposit

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Top rated Forex brokers in Malaysia 2024

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Broker
Broker Score
Official Site
Min. Deposit
Max. Leverage (Forex)
Cost of Trading
Beginner Friendly
Regulators
Platforms
Compare
Pepperstone
4.61 /5
Read Review
Visit Site >
89%74- of retail CFD accounts lose money
USD 0200:1USD 10ExcellentFCA Regulated Forex BrokersASIC BrokersCySEC Regulated BrokersDFSA Regulated Forex BrokersBundesanstalt für FinanzdienstleistungsaufsichtSecurities Commission of the BahamasCapital Markets AuthorityMT4, MT5, cTrader, TradingView
Octa
4.37 /5
Read Review
Visit Site >
67.65% of retail CFD accounts lose money
USD 251000:1USD 6ExcellentCySEC Regulated BrokersFinancial Services Conduct AuthorityMwali International Services AuthorityMT4, MT5, OctaTrader
Tickmill
4.58 /5
Read Review
Visit Site >
71% of retail CFD accounts lose money
USD 100500:1USD 6ExcellentCySEC Regulated BrokersFCA Regulated Forex BrokersLabuan Financial Services AuthorityFinancial Services Conduct AuthorityThe Seychelles Financial Services AuthorityDFSA Regulated Forex BrokersMT4, MT5
AvaTrade
4.59 /5
Read Review
Visit Site >
76% of retail CFD accounts lose money
USD 100400:1USD 9ExcellentASIC BrokersFinancial Services Conduct AuthorityCySEC Regulated BrokersFinancial Services AgencyCentral Bank of IrelandFinancial Regulatory Services AuthorityIsrael Securities AuthorityMT4, MT5, Avatrade Social, AvaOptions
XM
4.45 /5
Read Review
Visit Site >
75.33% of retail CFD accounts lose money
USD 51000:1USD 6ExcellentCySEC Regulated BrokersASIC BrokersDFSA Regulated Forex BrokersInternational Financial Services CommissionFinancial Services Conduct AuthorityMT4, MT5
FP Markets
4.40 /5
Read Review
Visit Site >
79% of retail CFD accounts lose money
AUD 100500:1USD 7ExcellentASIC BrokersCySEC Regulated BrokersFinancial Services Conduct AuthorityCapital Markets AuthorityThe Seychelles Financial Services AuthorityMT4, MT5, cTrader, IRESS
IC Markets
4.56 /5
Read Review
Visit Site >
70.81% of retail CFD accounts lose money
USD 200500:1USD 8ExcellentCySEC Regulated BrokersASIC BrokersThe Seychelles Financial Services AuthoritySecurities Commission of the BahamasMT4, MT5, cTrader, TradingView
HFM
4.53 /5
Read Review
Visit Site >
72.90% of retail CFD accounts lose money
USD 01000:1USD 10ExcellentCySEC Regulated BrokersFCA Regulated Forex BrokersFinancial Services Conduct AuthorityDFSA Regulated Forex BrokersFinancial Services CommissionThe Seychelles Financial Services AuthorityMT4, MT5, HFM Trading App
Admiral Markets
4.28 /5
Read Review
Visit Site >
76% of retail CFD accounts lose money
USD 251000:1USD 8ExcellentASIC BrokersCySEC Regulated BrokersFCA Regulated Forex BrokersFinancial Services Conduct AuthorityJordan Securities CommissionFinantsinspektsioon (Estonian Financial Supervision and Resolution Authority)MT4, MT5, MT Supreme
Fusion Markets
4.41 /5
Read Review
Visit Site >
89% of retail CFD accounts lose money
AUD 0500:1USD 4.50ExcellentASIC BrokersVanuatuMT4, MT5, cTrader, TradingView

Best Broker Reviews 2024

At FXMalaysia, we have an experienced review team dedicated to evaluating Forex brokers. Our team of experts meticulously examines each broker in 7 different areas, amassing an enormous amount of data in the process. With over 200 individual metrics analysed, we invest hundreds of hours annually researching and scrutinising brokers to ensure that we only recommend the best in the Forex industry.

Forex Broker Scoring

Of these 7 areas, we always prioritise regulation and costs. These are our priorities because traders want to know that their broker is trustworthy and isn’t overcharging them. Brokers are always altering the products they offer, and we keep our reviews updated with the latest data available. You can find out more about our in-depth review process here.

These are the top Forex brokers in Malaysia for 2024, as determined by our review process.


Pepperstone – Best ECN Trading Execution

Broker Score
4.614.61 / 5
🏦  Min. DepositUSD 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage200:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Pepperstone is the leading Australian ECN Forex broker. Most trades on Pepperstone have execution in less than 30ms, which is ideal for scalpers and clients who run expert advisors. Both accounts offer market execution with some of the tightest spreads in the industry – the Razor Account has spreads from 0 pips for the EUR/USD and 7 USD commission. While Pepperstone offers Islamic accounts for all Malaysian traders, the Razor account is not available as an Islamic account. 

PEPPERSTONE FEATURES

  • Award-winning, personalised customer service available 24 hours a day
  • Excellent ECN trading education for beginners.
  • Islamic accounts available with a 200 USD minimum deposit
  • All three major trading platforms: MT4, MT5 and cTrader
Pros
  • Well regulated
  • Tight spreads
  • Great platform choice
  • Wide range of assets
Cons
  • Limited market analysis
AlertAccepts Malaysian Clients. Average spread EUR/USD 1.00 pips with 0.0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 200:1. Islamic account available. MT4, MT5 & cTrader platforms supported. Pepperstone is regulated by the FCA, ASIC, CySEC, SCB, CMA, BaFin and the DFSA.

Octa – Low Trading Costs & Copy Trading

Broker Score
4.374.37 / 5
🏦  Min. DepositUSD 25
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage1000:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Founded in 2011, Octa offers trading on 35 Forex pairs, five commodities, ten indices, 30 cryptocurrencies, and 150 stocks. The Octa website, fully translated into Bahasa Melayu, features two account types and an unlimited demo account. Octa supports the world’s two most popular trading platforms, MT4 and MT5, as well as its new intuitive OctaTrader platform, which may be easier for many beginners to get started with. Octa has also launched its own trading app, available on iOS and Android devices, which features seamless integration with your desktop trading account and 24/7 customer service in English and Bahasa Melayu.

Octa’s two account types have some of the lowest trading costs available, with spreads starting at 0.6 pips on the EUR/USD with no commission. Both accounts have a minimum deposit of 100 USD, 1:500 leverage on currency pairs and a choice between EUR or USD as your account currency. The main difference is that trading on stock CFDs is only available on the MT5 platform.

OCTA FEATURES

  • Copy-trading available on all accounts
  • Constantly updated promotions and bonuses for Malaysian clients
  • Free AutoChartist for traders with a 1000 USD balance
  • Islamic trading accounts are available for all platforms and account types.
Pros
  • Fast and free withdrawals
  • Low minimum deposit
  • Tight spreads
Cons
  • Limited range of assets
  • Poorly regulated
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.60 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4, MT5 and Octatrader platforms supported. Octa is regulated by CySEC, FSCA, MISA, and is registered in St Lucia.

TickMill – MT4 Broker with the Lowest Trading Costs

Broker Score
4.584.58 / 5
🏦  Min. DepositUSD 100
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Founded in 2014 and regulated by the Labuan FSA in Malaysia, Tickmill is an MT4 broker with some of the lowest trading costs available. While the Classic Account has relatively wide spreads and no commission, the Pro Account offers variable spreads down to 0 pips and a 4 USD (round turn) commission – one of the lowest commissions in the industry – and only a 100 USD minimum deposit. Tickmill recently started offering support for MT5 and has also added Bitcoin, Ethereum and Litecoin trading for crypto traders.

TICKMILL FEATURES

  • Islamic accounts available for all Malaysian traders
  • Islamic accounts have no additional costs for trading major currency pairs
  • VIP Account with even lower commissions (down to 2 USD round turn) but a minimum balance of 50,000 USD.
  • Excellent trading tools for MT4: AutoChartist, Myfxbook and a subsidised VPS service.
Pros
  • Tight spreads
  • Well regulated
  • Fast and free withdrawals
Cons
  • Limited base currencies
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.00 pips with 6 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 and MT5 platforms supported. Tickmill is regulated by CySEC, FCA, FSCA, DFSA, and the FSA-Seychelles.

AvaTrade – Best Mobile Trading Forex App

Broker Score
4.594.59 / 5
🏦  Min. DepositUSD 100
🛡️  Regulated By
💵  Trading Cost 
USD 9
⚖️  Max. Leverage400:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Founded in 2006, AvaTrade offers trading on Forex, cryptocurrencies, commodities, indices, stocks, bonds, vanilla options, and ETFs. AvaTrade’s redesigned AvaTradeGo mobile app offers Malaysian Forex traders an easy and intuitive mobile trading experience. AvatradeGO has a sophisticated dashboard and traders can view educational videos and contact customer support straight from the app.  It also allows traders to place orders, set price alerts, create watchlists, and view live prices and charts. Avatrade’s spreads are some of the tightest for a commission-free account with a 100 USD minimum deposit – as low as 0.9 pips on the EUR/USD.

AVATRADE FEATURES

  • Local Malaysian customer support team
  • Maximum leverage of 400:1 and negative balance protection for all Malaysian traders
  • Integrated Trading Central dashboard for all traders
  • AvaProtect Tool: Traders can purchase temporary loss protection. Losses are refunded, but profits are the traders to keep
Pros
  • Top-tier regulation and security with licenses from ASIC and CBI among others
  • Accessible trading with a low minimum deposit of 100 USD
  • Award-winning mobile trading with the AvaTradeGO app with social trading features
  • Wide range of assets including unique instruments like vanilla options
  • Educational material to support trader development and strategy enhancement
Cons
  • Market analysis could be more extensive
  • Poor regulatory oversight outside of the UK and EU
  • Avatrade is a Market Maker and operate a dealing desk which might not align with all trading preferences
AlertAccepts Malaysian Clients. Spreads start at 0.90 pips on theEUR/USD on trading account with lowest minimum deposit. Max leverage 400:1. Islamic account available. MT4 & MT5 platforms supported. AvaTrade Group regulated by ASIC, FSCA, B.V.I FSC & FSA.

XM – Lowest Cost MT5 Broker

Broker Score
4.454.45 / 5
🏦  Min. DepositUSD 5
🛡️  Regulated By
💵  Trading Cost 
USD 6
⚖️  Max. Leverage1000:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Founded in 2009, XM is one of the most well-regulated brokers in the Forex industry and offers CFD trading on Forex, stock CFDs, commodities, equities, precious metals, energies, and shares. The XM Ultra-Low account on MT5 has a minimum deposit of 50 USD and spreads start at 0.6 pips with no commission. In Malaysia, XM is also well known for its low-cost Islamic accounts, low trading fees and fast execution on both the MT4 and MT5 platforms. Hedging, scalping and algorithmic trading are all permitted.

XM FEATURES

  • Islamic trading accounts for all Malaysian traders.
  • Lowest cost Islamic account in Malaysia – no extra charges on MT4 or MT5.
  • The XM Ultra-Low account: A minimum deposit of 50 USD and spreads start at 0.6 pips with no commission.
  • All accounts have a no-requotes execution policy and 99.35% of XM orders are executed in less than one second.
Pros
  • Well regulated
  • Excellent education
  • Free deposits and withdrawals
Cons
  • Limited platform choice
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.60 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4 & MT5 platforms supported. XM Group regulated by CySEC, ASIC, and the Belize FSC.

FP Markets – Best ECN Pricing

Broker Score
4.404.40 / 5
🏦  Min. DepositAUD 100
🛡️  Regulated By
💵  Trading Cost 
USD 7
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

A well-regulated broker with ECN pricing, FP Markets offers trading on multiple instruments, including shares, metals, commodities, indices, and over 60 Forex pairs. FP Markets supports the MT4 trading platform and the newer MT5 platform, cTrader, and TradingView.

FP MARKETS FEATURES

  • Accounts: Minimum deposit of 100 USD on both the Standard Account and the Raw Account. The Raw Account spreads start at 0.1 pips (EUR/USD) and 6 USD (RT) commission.
  • Traders Hub: Education for beginners, including video tutorials and trading courses.
  • Trading Tools: Free Autochartist, VPS services and the Traders Toolbox.

 

Pros
  • Trusted since 2005 with top-tier regulation
  • 100 USD minimum deposit amount
  • Supports MT4 MT5 cTrader and TradingView
  • Spreads start at 1.0 pip and narrow to 0 pips with higher trading volumes
  • Welcoming South African traders with specific regulatory compliance
Cons
  • Notably higher withdrawal fees than competitors
  • Stock CFDs are limited on MT4/MT5 and primarily available through IRESS
  • High leverage up to 500:1 posing risks for inexperienced traders
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.10 pips with 6 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5, and ctrader platforms supported. FP Markets is regulated by CySEC and ASIC.

IC Markets – Low-Cost Trading Across Popular Platforms

Broker Score
4.564.56 / 5
🏦  Min. DepositUSD 200
🛡️  Regulated By
💵  Trading Cost 
USD 8
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

IC Markets stands out for its simplified account options and competitive trading conditions across three popular trading platforms.

Trading Instruments:

  • Access to Forex, commodities, stocks, cryptocurrencies, indices, bonds, vanilla options, and ETFs.

Trading Platforms and Fees:

  • MT4, MT5, and cTrader platforms.
  • Raw Spread Accounts with a commission of 3 USD (cTrader) or 3.5 USD (MT4/MT5) and spreads averaging 0.1 pips on EUR/USD.
  • Standard Account with no commission and spreads starting at 1 pip.

Regulation and Security:

  • Regulated by ASIC (AFS License Number 335692) since 2007 and CySEC in the EU.
  • Negative balance protection and segregated operational and client funds
Pros
  • Well regulated
  • Tight spreads
  • Wide range of assets
  • Great platform choice
Cons
  • High minimum deposit
  • Limited market analysis
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.10 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & cTrader platforms supported. IC Markets is regulated by CySEC and ASIC.

HFM (HotForex) – Highest Leverage for Market Execution

Broker Score
4.534.53 / 5
🏦  Min. DepositUSD 0
🛡️  Regulated By
💵  Trading Cost 
USD 10
⚖️  Max. Leverage1000:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Founded in 2009 and headquartered in Cyprus, HFM is regulated by the FCA and CySEC and provides trading on Forex, commodities, indices, shares, bonds, and ETFs – and recently reintroduced cryptocurrencies. All trades are posted directly to the market, and leverage is available up to 1000:1 on the Micro Account, where the minimum deposit is 5 USD. Islamic accounts are available for all Malaysian traders on all six of HFM’s accounts, including the Micro Account. Islamic traders can hold open positions for 7 days before incurring extra charges. 

HFM FEATURES

  • Islamic (swap-free) trading available on all 4 account types
  • Tight spreads, starting at 1 pip on the Micro Account
  • Detailed market analysis for beginners and professionals, including daily market news, trade analysis, and outlooks
  • Customer support available 24/5 from toll-free phone numbers
Pros
  • Low minimum deposit
  • Tight spreads
  • Well regulated
  • Good range of accounts
Cons
  • Limited base currencies
AlertAccepts Malaysian Clients. Average spread EUR/USD 1.00 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4 & MT5 platforms supported. HF Markets Group regulated by the FSCA, FCA, FSC, CySEC and the DFSA.

Admirals – Best MT4 and MT5 Trading Tools

Broker Score
4.284.28 / 5
🏦  Min. DepositUSD 25
🛡️  Regulated By
💵  Trading Cost 
USD 8
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Admirals is a well-regulated Forex broker that offers trading on a wide range of tradable instruments on the MT4 and MT5 trading platforms. Available for both demo and live accounts, MetaTrader Supreme, has advancements in technical analysis, improved trading widgets, the trader terminal, charts, and indicators that update the old standard versions of the software with both functionality and usability. 

ADMIRALS FEATURES:

  • Admirals offers four accounts, two focusing on the MT5 platform – Trade.MT5 and Zero and two on the MT4 platform – Trade.MT4 and Zero.
  • The Trade.MT5/MT4  accounts have a minimum spread from 0.5 pips with no commission and the Zero.MT5/MT4 accounts have spreads from 0 pips with commissions varying between 1.8 to 3.0 USD per lot. The cost of trading 1 lot of EUR/USD with Zero accounts is 5 USD round turn, which is at the lower end of what other brokers offer.
  • CFDs available to trade include 40+ FX pairs, 32 crypto CFDs, precious metals, energies, commodities, indices, shares, ETFs, and bonds.
Pros
  • Well regulated
  • Excellent education
  • Wide range of assets
Cons
  • Expensive withdrawals
AlertAccepts Malaysian Clients. Average spread EUR/USD 0.80 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & MT4 Supreme Edition platforms supported. Admiral Markets is regulated by the FCA, ASIC, CySEC, and the JSC.

Fusion Markets – 3 Copy Trading Platforms, No Minimum Deposit

Broker Score
4.414.41 / 5
🏦  Min. DepositAUD 0
🛡️  Regulated By
💵  Trading Cost 
USD 4.50
⚖️  Max. Leverage500:1
💹  Copy Trading
🖥️  Platforms
💱  Instruments 

Founded in 2017 in Melbourne, Fusion Markets is an ASIC-regulated broker with exceptionally low trading costs, MT4 and MT5 support, and no minimum deposit requirements. Alongside an excellent range of market analysis materials, Fusion Markets also offers no less than three different copy-trading solutions. Its own Fusion+ copy trading platform is only available in a proprietary trading platform, but it also offers Duplitrade and Myfxbook Autotrade – one of the largest Forex social trading communities in the world.

In terms of traditional trading, Fusion Markets is one of the lowest-cost brokers in the world. EUR/USD spreads start at 0 pips on its Zero Account with a very low commission of 4.5 AUD. The only drawbacks are a relatively limited number of CFDs (though 85 Forex pairs, many more than most brokers) and no education to speak of, so beginners will have to educate themselves elsewhere.

FUSION MARKETS FEATURES

  • Ultra-low trading costs on the Zero Account
  • Excellent market analysis tools
  • 85 Forex pairs to trade
Pros
  • Low minimum deposits
  • Tight spreads
  • Excellent market analysis
Cons
  • No in-house platform
  • No education
AlertAccepts Malaysian Clients. Average spread EUR/USD 0 pips with 0 USD commission round turn on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. Fusion Markets is regulated by ASIC, FSA (Seychelles), & VFSC.

Which is the Best Broker in Malaysia?

The best broker in Malaysia is Octa. Octa (formerly OctaFX) has some of the lowest trading costs available in Malaysia, with spreads starting at 0.6 pips on the EUR/USD and a minimum deposit of just 25 USD. All accounts are Sharia-compliant by default, with no swaps ever charged on overnight positions. The Octa website is fully translated into Bahasa Melayu and traders can benefit from 24/7 customer service in English and Bahasa Melayu. Octa clients can trade Forex, commodities, metals, stocks, and indices and have a choice of trading platforms and bonus competitions to get involved in. Finally, the new OctaTrader platform and mobile app is one of the easiest platforms for beginners to use.

Which Broker has the best Forex Trading Platforms?

Pepperstone offers MT4, MT5, cTrader and TradingView, all four of the most popular platforms in the world. For traders who are unsure about which platform to use, Pepperstone demo accounts are available for each platform so traders can get a feel for them before deciding. Both of Pepperstone’s low-cost trading accounts are available on all four platforms, featuring some of the fastest trading execution available. Islamic accounts are also available on all four platforms but are restricted to the Standard Account.

Is Forex trading legal in Malaysia?

Yes, forex trading is legal in Malaysia, and it has two regulatory authorities that oversee Forex trading in the country. These are the Securities Commission Malaysia (SCM) and the Labuan Financial Services Authority (LFSA).  The Securities Commission Malaysia (SCM) is a subsidiary of Bank Negara Malaysia (BNM – Malaysia’s central bank) and regulates the securities market. SCM issued new guidelines on Contract for Difference (CFDs) in April 2018, which covers brokers offering Forex and other derivative products:

  1. Forex brokers must submit transaction records, financial status, profit and loss reports and other regulatory documents to SCM.
  2. Brokers must conduct due diligence on their customers. They must know a client’s financial status and evaluate their investment experience.
  3. Brokers must ensure that all clients fully understand the risks of trading Forex and other CFDs.
  4. Brokers must highlight the risks of trading leveraged products on their websites.
  5. Brokers must have a minimum paid-up capital of not less than MYR10 million (approximately 2.4 million USD) and a minimum net capital of not less than MYR500,000 (approximately 120,000 USD).
  6. Brokers must be registered in Malaysia, both for tax purposes and corporate governance, and hold a business account at a Malaysian bank.

However, the introduction of these guidelines has had little effect on the Forex trading environment in Malaysia, and most of the 120+ brokers in the country still operate without a licence from the SCM.

Just because the SCM does not enforce regulations does not mean that Malaysian traders should trade with unregulated brokers. Brokers regulated by ASIC, CySEC, MAS or the FCA are much more secure than brokers with no regulation at all.

Labuan Financial Services Authority (LFSA)

The Labuan Financial Services Authority (LFSA) is the regulator of the Labuan International Business and Finance Centre (IBFC). The Labuan IBFC is a free trade zone established by the Malaysian government in 1990 on the island of Labuan. The Labuan Financial Services Authority’s main role is to issue licenses and supervise all licensed institutions in Labuan.

Unusually, the LFSA license is for Straight Through Processing (STP) brokers only. In other words, brokers with an LFSA license are not allowed to be the counterparty of any order. Most Forex brokers are market makers and act as the counterparty to trades, so there have been few Malaysian or international brokers interested in acquiring a licence. The one exception is Tickmill, a British STP broker, who acquired a licence from the LFSA in 2019.

Why is Regulation Important?

Regulation is essential for protecting your money and ensuring a fair and transparent trading experience.

When trading Forex, you want to be confident that your broker is operating legally and ethically and that your funds are being handled safely. Regulated Forex brokers must adhere to strict standards set by regulatory bodies, which include requirements for capital adequacy, segregation of client funds, and ongoing reporting and compliance. This means that your funds are protected, and your trading experience is fair.

Unregulated brokers are not forced to hold to the same standards. This can lead to a higher risk of fraud or unethical practices, which can result in financial losses for traders. Choosing a regulated Forex broker gives you peace of mind and security, knowing that your investments are protected and your trading experience is fair.

How are Forex Brokers Regulated in Malaysia?

In Malaysia, Forex brokers must be regulated by the Securities Commission of Malaysia (SCM), the regulatory body for non-banking financial services in the country. 

Because most Forex brokers are unlicenced, they must operate outside of the traditional financial system. Banks tend to block or return transfers made to and from Forex brokers, and most Malaysians rely on digital payment providers. The overall financial environment in Malaysia is poorly controlled, and brokers and investors in Malaysia pay little attention to the government’s financial regulatory policies.

The SCM considers forex brokers that are not regulated directly in Malaysia to be potential scams, and has created a list of unregulated brokers to protect traders – though it’s important to note that not all brokers listed here are scams.

Scam Brokers and Reporting Regulatory Violations

If you are unsure about the reliability of your Forex broker, you can check our list of brokers to avoid. We recommend you partner with one of our tested brokers, and should you be concerned with a specific broker’s regulatory oversight, please contact SCM directly. You can always find out if a broker is regulated by the SCM here.

We also have a report a scam broker form which we use to gather information so that we get the word out. Your personal details will not be shared externally.

Do I Need a Broker to Trade Forex?

Yes, you will need a broker to trade Forex. Connecting traders to the Forex market is an expensive and technically complex business. Most Forex brokers form a bridge between the global Forex market and Forex traders; these are called market makers. Market makers buy up large trading positions from the Forex market, which they sell to traders in smaller trade sizes.

Other brokers act as a go-between, taking orders from traders and sending them straight to the global Forex market. These are called ECN brokers or DMA brokers. Both types of Forex brokers require a lot of money to set up and need teams of highly qualified technicians to maintain their trading platforms. 

How do Forex Brokers Make Money?

Market markers only make money from the spread – the difference between the buying and selling price of the currency pair. These brokers will be the counterparty to any trade, so they make money when clients lose trades. 

ECNs have tight spreads but make money from commissions, which are charged whenever a trade is opened or closed. This type of broker makes money whether a client wins or loses.

Which Forex Brokers are Best for Beginner Traders?

The best brokers for beginners are well-regulated and have no minimum deposit requirement, ensuring security and a low cost of entry. Also important are low fees and negative balance protection, as these both help to lower risk. Responsive and knowledgeable customer support is essential. Customer service should be available 24/5 via email, live chat, and telephone, though 24/7 is better. Last but not least, beginners should look for a broker with a high-quality education section; this should feature articles, video tutorials, frequent webinars, advanced trading strategies, and chart analysis.

For more detail and to see which brokers we recommend for new traders, check out our dedicated page on the best brokers for beginners.

Which Forex Brokers have the Best Demo Accounts?

The brokers with the best demo accounts understand that beginners should not be forced into trading real money and that experienced traders should be able to test strategies as long as they want to. So the best demo accounts are not time-limited and replicate real market conditions as closely as possible. Beginners looking for a demo account will want a broker with good education, so they can learn about Forex trading as they practice.

For more detail and to see which brokers we recommend for demo trading, check out our dedicated page on the best demo accounts.

Which Trading Platforms do the Best Forex Brokers Offer?

The best Forex brokers generally offer Metatrader 4 (MT4), MetaTrader 5 (MT5), and cTrader. These are third-party trading platforms which you can install on your computer. They are fully customisable and have advanced charting tools, research tools, and options for automated trading or copy trading. Some brokers also have their own trading platforms, which are usually accessed via a browser or on your mobile phone. For more details on trading platforms and how they work, check out our guide on trading platforms

Forex Risk Disclaimer

Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. Forex and CFD transactions involve high risk due to the following factors: Leverage, market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection. Traders should not deposit any money that is not considered disposable income. Regardless of how much research you have done or how confident you are in your trade, there is always a substantial risk of loss. (Learn more about these risks from the UK’s regulator, the FCA, or the Australian regulator, ASIC).

Our Rating & Review Methodology

Our State of the Market Report and Directory of CFD Brokers to Avoid are the result of extensive research on over 180 Forex brokers. These resources help traders find the best Forex brokers – and steer them away from the worst ones. These resources have been compiled using over 200 data points on each broker and over 3000 hours of research. Our team conducts all research independently: Testing brokers, gathering information from broker representatives and sifting through legal documents. Learn more about how we rank brokers

Editorial Team

 

Chris Cammack
Head of Content

Chris joined the company in 2019 after ten years experience in research, editorial and design for political and financial publications. His background has given him a deep knowledge of international financial markets and the geopolitics that affects them. Chris has a keen eye for editing and a voracious appetite for financial and political current affairs. He ensures that our content across all sites meets the standards of quality and transparency that our readers expect.

 

Alison Heyerdahl
Senior Financial Writer

Alison joined the team as a writer in 2021. She has a medical degree with a focus on physiotherapy and a bachelor’s in psychology. However, her interest in forex trading and her love for writing led her to switch careers, and she now has over eight years experience in research and content development. She has tested and reviewed 100+ brokers and has a great understanding of the Forex trading world.

 

Ida Hermansen
Financial Writer

Ida joined our team as a financial writer in 2023. She has a degree in Digital Marketing and a background in content writing and SEO. In addition to her marketing and writing skills, Ida also has an interest in cryptocurrencies and blockchain networks. Her interest in crypto trading led to a wider fascination with Forex technical analysis and price movement. She continues to develop her skills and knowledge in Forex trading and keeps a close eye on which Forex brokers offer the best trading environments for new traders.

 

Vanessa Marcos
Financial Writer

Vanessa joined the team in 2023. Born and raised in southern Portugal, she has a BA in Journalism and a Master’s in Literary Theory, both from Lisbon University. Since 2011, she has worked in social media, copywriting, content management, ghost-writing, and SEO. Vanessa loves to write, and although she is a generalist in digital marketing, she always draws on her creativity in her work. She is constantly researching new subjects and finds the analytical depth of Forex trading fascinating.

 

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