Best Forex Brokers Malaysia for 2023

Choosing a regulated broker is important for avoiding scams, and the country where your broker is regulated is equally important. Our Trust Score, a proprietary algorithm, ranks regulatory agencies into three groups, with Tier 1 indicating the most trusted financial centers and Tier 3 the least. Our data collection on each broker results in a ranking from 1 to 99 of the broker's overall trust. The higher a broker's Trust Score, the better. Learn more about Trust Score here.

Bank Negara Malaysia’s official forex warning list

The central bank of Malaysia, also known as Bank Negara Malaysia (BNM), periodically updates its Financial Consumer Alert (FCA) List which – at the time of this writing – contains nearly 400 companies. The declared aim of BNM’s FCA list is to identify “entities or schemes which may have been wrongly perceived or represented as being licensed or regulated by Bank Negara Malaysia (BNM).”

Important note: At first glance, the BNM’s FCA list may appear to simply be a forex scammer list. Though many of the companies listed may be suspect forex brokers and/or potential scammers, some of the companies or entities may be legitimate brands that are regulated in other countries or jurisdictions – just not in Malaysia. That said, we always recommend working with a broker that is regulated in your country of residence (if possible). Learn more about how we track and classify regulatory agencies on our Trust Score page, and check out our guide to avoiding forex scams.

To identify if a forex broker is regulated by SCM, the first step is to identify the register number from the disclosure text at the bottom of the broker's Malaysia homepage.

Next, look up the firm on the SCM website to validate the current regulatory status of the broker in Malaysia. Here is the official page with the public register of license holders on SCM.

It's also worth noting that Bank Negara Malaysia, the Central Bank of Malaysia that regulates money service businesses and forex dealers, has issued guidelines for cryptocurrencies with which companies must comply when dealing with crypto assets.

Yes, forex trading is legal in Malaysia – as long as it is conducted with a licensed money service business provider under Malaysia’s Money Service Business Act of 2011, or with a regulated broker under the Exchange Control Act of 1953. The Central Bank of Malaysia considers forex brokers that are not regulated directly in Malaysia to be potential scams, and has created a list of unregulated brokers to protect consumers – though it’s important to note that inclusion within this list does not necessarily indicate a scam. There are many reputable, highly rated forex brokers that are regulated in other countries that do accept Malaysian residents.

The central bank of Malaysia, or Bank Negara Malaysia (BNM), has authority over the local foreign exchange markets and regulates the national currency (the Malaysian Ringgit). That said, there is no clear framework for brokers that offer retail forex from a margin account, leaving locals with little choice in choosing a local forex broker for the purpose of retail forex trading. For example, CIMB is one of a dozen brokers regulated by the SCM in Malaysia, but it doesn’t offer leveraged forex trading. CIMB’s forex offering is limited to physical exchange (i.e. currency conversion) – which is not ideal for speculators.

When looking at the public register of license holders issued by the Securities Commission of Malaysia, we found that most of the capital market services providers may offer physical currency exchange, but retail spot forex trading options are limited. For this reason, many international brokers that are regulated in other countries accept Malaysian residents despite not holding a license directly with the SCM.

IG is the best forex broker in Malaysia among all brokers that accept Malaysian residents. IG ranks highly across key categories, including its trust factor (using our proprietary Trust Score) and is the No. 1 pick in Malaysia for 2023. See our full review of IG.

After conducting extensive testing on the best mobile apps from international forex brokers and local forex brokers in Malaysia, IG’s suite of mobile apps emerged as our top choice. IG delivers an outstanding mobile trading experience, and its IG Trading app is available for Android and iOS devices.

In our full-length review of IG, I describe IG’s mobile app as being “packed with plenty of features that will satisfy both casual and advanced traders.”

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Important note: Though not regulated by the SCM in Malaysia, IG holds close to a dozen regulatory licenses in multiple jurisdictions across the world, making it one of the most trusted international forex brokers.

Forex, short for foreign exchange, refers to the trading or exchanging that takes place in international currency markets, in which one currency is bought or sold in return for another foreign currency. The goal for forex traders — and it's a tricky one — is to profit by accurately predicting fluctuations in value.

Commonly traded forex pairs include the euro and U.S. dollar (EUR/USD), British pound and U.S. dollar (GBP/USD), euro and Japanese yen (EUR/JPY), and several others.

There are various types of participants in the forex markets: retail and institutional traders, large corporations, banks, and central banks that help regulate monetary policy, such as when printing money that enters circulation.

There are at least two sides to every forex trade. On one side is a buyer, and on the other side a seller. Forex market participants either have a need for the particular currency, such as for business use or hedging risk; or are speculators taking an investment position expecting the price to move in a favorable direction.

For example, let's say you have U.S. dollars and expect their value to go down and want to sell them in order to buy euros for an upcoming trip to Europe. Or maybe you expect the euro price to go higher relative to the U.S. dollar and are looking at it as an investment.

The spread is a term used to describe the cost when you trade forex. It's the difference between the sell (bid) price and the buy (ask) price of the currency pair you're trading.

Spread when buying: While the spreads may vary across brokers, account types, and forex pairs, the spread will be the same whether you buy or sell. Spreads can also widen due to volatile events such as as economic news announcements.

Spread when selling: Selling is no different in terms of spread. For example, a trader who expects a price drop and creates a sell to open market order will pay the bid price to open a position, and at that moment will also realize the spread. The ask price will be worse (the rate to close the trade at that moment would create a loss for the spread amount if the rate stayed the same) even though the subsequent price update may again cause a deeper loss, break-even or profit, depending on the degree of price change to the rates.

Commissions: Even in a commission-free account, traders still pay the spread, because the moment you place the trade — such as when buying at the ask price — the bid price is worse. Thus your trade reflects the cost of the spread being realized before the next price updates. Any subsequent rate change can result in a deeper loss, break-even, or profits, depending on the degree of price movements and direction after your trade is executed.

Pro tip: While some brokers offer fixed pricing, or may advertise spreads from as low as a certain value, the most meaningful measure is an average spread that is calculated over a time period that shows how consistent the broker's pricing is. Otherwise, a firm may advertise a low rate, but in reality spreads could be much worse on average. So it is important to obtain average spreads as well as the time period when they were measured, such as the month of January 2022 or Q3 2021 for a given forex pair.

Yes, you can trade cryptocurrency similarly to the way you would trade forex. The same sort of technical and fundamental analysis is applicable to trading crypto derivatives (that is, CFDs) or other crypto securities which allow you to go long (buy) or short (sell). You can also use the underlying asset (long-only) to hold a longer-term position.

Like forex traders, crypto traders can go long or short — that is, trade in either direction to open a new position — and use a combination of technical analysis (historical and current market prices) and economic news, such as unemployment data, GDP and other government or central bank data when placing a position.

A key difference between forex and crypto trading is that some cryptocurrencies don't have enough price history for technical analysis to be meaningful, and fundamental analysis is limited to any on-chain public data about the project, in addition to the project sponsor's website.

Pro tip: Since there are no governing bodies to disseminate official market data — given that crypto is largely decentralized — commentary across social media channels can influence market prices. For example, Elon Musk could make a one-off comment and impact a cryptocurrency price, even though he may not be associated with a particular cryptocurrency project.

Forex Risk Disclaimer

There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Read more on forex trading risks.