How Does Forex Regulation Work In Malaysia?

How Does Forex Regulation Work In Malaysia?

The Forex industry is a huge market, moving billions of Dollars every day between hundreds of thousands of traders. However, it is also a fairly dangerous market for reasons besides the currency volatility and skill gap; its mostly-online presence has made it a seeming gold mine for scammers looking to make a quick profit from unsuspecting traders.

As such, it is imperative that you stay informed regarding how your territory regulates this industry, and even if your country has lax regulations, your broker’s country is also important when it comes to its trustworthiness.

So, in this article, we will go over Malaysia’s regulations and how it has changed recently.

Malaysia As A Nation.

Malaysia is a federal nation that has enjoyed a very fast expansion regarding its economic status in the last decade. In fact, many experts place this growth at around 40%.

When we take that into consideration, we can easily expect such a wealthy industry as Forex to gain popularity, and indeed, this has been the case.

This notable increase in wealth and living standards has rapidly placed Malaysia among the largest emerging economies in the Asian continent, and a promising birthplace for many successful Forex traders.

A Relatively Infant Industry.

It is critical to note how the increased economic growth has been a relatively new phenomenon, so it is consequential that the Forex industry is even newer. Therefore, the Malaysian environment can still be seen as a somewhat menacing environment for traders.

That is not only due to the overall dangers of the market but also because of ill-intentioned people.

You see, such an unknown industry lends itself to unscrupulous entities that may look to earn their living off naive newcomers.

However, while that is easily avoidable by simply staying informed, there is another issue regarding the federal constitution of the states.

As each state makes its own legislation, it may be difficult to keep track of which territory is best for business, and Forex may still be illegal in some states, but this only means that you need to be a bit more aware of the laws.

The Relationship Between the Malaysian Central Bank and Forex.

The central bank in Malaysia is Bank Negara Malaysia, and it is responsible for managing the Ringgit.

This is a very important body to keep track of since central banks are a major influence in Forex, due to how they directly affect their currency’s value.

True to this statement, the Malaysian central bank was a huge player back in the 80s. During Jaffar Hussein’s government, the bank quickly earned a substantial influence regarding the overall direction of the market.

In fact, the bank had to receive a request to stop trading, sent by the chairman of the Federal Reserve after realising how the speculation was influencing the economy; this resulted in a significant sale of its currency reserves until 1994, where it pretty much became insolvent.

Forex trading: definitions and tools

Forex trading: definitions and tools

Forex trading is the decentralised market in which currencies are negotiated, whose purpose is to facilitate the financial flow derived from international trading. This market is the largest and most liquid commercial market in the world, with daily trading that exceeds joint trading of all the bond and stock markets of the world, for more than 5.4 trillion dollars a day.

To understand what this volume of business means, it is what the New York Stock Exchange (the largest in the world) moves in a whole stock market. As in the stock market, you can change the currency based on what you think is worth (or where it’s headed). The big difference with the Forex is that you can trade up or down with the same ease. Let’s find out a little more about trading and forex.

Facts about Trading and Forex

Forex trading is, in simple words, the act of trading money. The currencies are traded through a broker or dealer in pairs, for example, euro and US dollar: (pair EUR/USD). Don’t get confused by the fact that you won’t buy or sell any physical money. Think of buying foreign currency as the purchase of a share in a country’s economy. You will be exchanging your money for another currency, based on that country’s economic activities and strength.

In Forex, the price of a currency pair is determined based on the country’s economy against the nation of the other currency.  Unlike other financial markets, the Forex market is decentralized and does not have a physical location. The Forex market is considered OTC (over-the-counter) market, because this market works electronically, in a network between banks 24 hours a day.

If you think that a coin will increase the value, you can buy it, if you think it will decrease the cost you can sell it. With such a large market, you will find a buyer when you are selling and a seller when you are buying, it is much easier than in other trading markets. Maybe you hear on the news that China is devaluing its currency to attract more foreign businesses to its country.

Forex trading tools

As with stocks, you can trade currencies based on your opinions about their values (or the prices you think the coins will have in the future). However, what sets Forex apart is that you can trade in both bullish and bearish trends. If you predict that a currency will increase, you can buy it. If you think your price will fall, you can sell it. Also, since Forex is so vast, finding buyers and sellers is much more comfortable than in other markets subject to liquidity.

If the price quotes are up to hundredths, how can you make significant profits by investing in Forex trading? The answer is leverage. To use leverage, you just have to set aside the margin required for the size of the operation. For example, if you apply a 50: 1 leverage, you can trade with $1000 by setting aside a margin of only $ 20 in your trading account. That gives you a much more significant exposure to a low investment.


Author: Editorial staff of 70 trades reviews blog

Why do some traders fail when they start doing online trading?

Why do some traders fail when they start doing online trading?

Some traders fail when they start doing online trading. Why is it happening? How can they avoid it?When we say that some traders fail when they start doing online trading, we do not mean to lose money: everyone who trades can lose money, this is part of the rules of the game. The traders who fail are those who lose (very little, no matter), they are discouraged and stop trading. Why is it happening?

Not everyone was born to do online trading

Online trading can be a source of great earnings but you should not think about trading as a machine to make easy money. When you start, the online trading does not take a big capital (you can start with a capital of just 10 euros) but it takes courage and winning mindset.

Making online trading means doing market operations, many transactions. Some of these will close in loss, others with earnings. Even millionaires traders lose money on some operation.

Those consider any loss as a tragedy, they are not really fit to do online trading. Better for them to do something else.

The winning trader is not the one who knows complex strategies, after all the strategies you learn or you can copy automatically using a social trading broker. The winning trader is the one who is capable of dominating the emotions.

And unfortunately not all are capable of it. To avoid loss as a trader is important, then, do an analysis of your personality to figure out whether you are able to withstand trading stress or not.

The wrong trading platform

Needless to go around: The online trading platform that you use it really makes the difference. In many cases, you can lose money because of a wrong choice.

The most striking case is that of unauthorized platforms: choosing a platform like that means losing all your money, because in most cases they are real scams.

scam-tradingBeware of scams

The worst way to start doing online trading is to believe the promises of easy earnings. Systems such as 1k Daily Profit, safe and instant gains. In fact, they are systems that do not work and that, indeed, they make you lose all the invested capital.

Those who start doing online trading should never believe, for any reason, to that kind of promise. They are fake and deceptive promises, designed to drive the trust and money of the less experienced.

Online trading is not a way to make easy money: to earn it requires an authorized and regulated platform, it takes commitment and takes time to devote. Anyone say something different, probably, is trying to cheat.


Author: Editorial staff of 70 trades reviews blog