The Young Investors Guide To Forex Part 1

In a world where international trade is necessary to develop and survive, currencies are considered a standard in international business and are exchanged in order to conduct foreign trade and business. In other words, forex is the practice of trading currency for profit. The same method applies to e-commerce transactions as well. If you buy a set of makeup from South Korea, you will need to buy it through the locally accepted currency which is the South Korea won.

However, forex trading is also a popular form of investing for private citizens, or also called retail traders. A unique fact about forex is that there is no central marketplace for foreign exchange. Because it is decentralised, it instead, trades electronically over-the-counter OTC , meaning all transactions are conducted via computer networks between traders around the world, rather than on one centralised exchange. The market is also a global one — it starts at 6. Forex trading has been around for some time, however the modern version has been in existent for the past 10 years or so.

According to Investopedia, forex, in the most basic form of converting one currency to another for financial advantage, has been around since nations began minting currencies. This is a stark contrast to the modern forex markets which are a modern invention. But now thanks to more analysis and proper strategies and risk management, we have seen people make a lot of good returns from the market.

As a trader, you will buy currency at the current market price, and at the same time, sell another at a target price in the future. A trader will always buy and sell at the same time, which is why currencies are always quoted in pairs. The profit or loss obtained is the difference between the two prices because, as we know it, currency prices are frequently changing.

There are several different ways to invest or speculate in currencies. From what we found, the most popular ways to invest in currencies are retail forex, spot FX, currency futures, currency options, currency exchange-traded funds or ETFs , forex CFDs, and forex spread betting. Jin said different people will approach different markets for different purposes.

The short answer is yes. In , Bank Negara Malaysia stated that forex trading or the buying and selling of foreign currency in Malaysia is allowed only through licensed commercial banks, Islamic banks, investment banks, and international Islamic banks, according to Forex Malaysia. However, the platforms or brokers you use must comply with these rules.

This Act imposes general restrictions on foreign exchange dealings by residents and non-residents. However, there are no restrictions for non-residents to invest in Malaysia to purchase ringgit assets, such as land property and securities. On top of that, there is also no restriction for non-residents to transfer foreign currency, all profits, returns and divestment proceeds from their investments in Malaysia, abroad.

Forex Trading in Malaysia

This Act gives powers to the Securities Commission Malaysia, to license and regulate businesses dealing in securities. This Act provides the licensing and regulation of money-changing business. For example, under this act , a person licensed under the Exchange Control Act is permitted to trade buy and sell foreign currency that is licensed under the Money-Changing Act From his experience of approaching many retail investors in Malaysia, Jin said he had seen a growing interest among traders towards forex.

We have seen a significant increase in people trying to find out more about FX, trying to learn how to do it and also trying to get started whether it is trading or investing. When it comes to forex, the more attractive it is to do business with a particular country — because of the tax benefits and booming industries etc. Unlike the stock market, big news or large market movements, as opposed to small nitty-gritty things, affect the market, Jin said.

The U. Just like stock trading, there are steps to forex trading. Follow these steps:. Forex, foreign exchange market is a global decentralized market for the trading of currencies. Putting this into explainable terms, forex is a worldwide market for companies or individuals to trade currencies without a centralized location.

Stock markets in Malaysia require you to buy at least a shares which could be a hefty cost at the start.

However as a young adult only with a small amount of savings, the stock market might be too costly to go into. Instead, young adult can set their eyes upon the forex market because the only minimum requirement a forex broker would require from you is merely a USD. If you play your cards right, your investment should provide more wins than losses most of the time. Continue reading to find out why! In a typical forex market, you will earn a profit through buying currency when it is low and selling when it is high. The basic concept itself is very similar to any other product, however please do not forget that currency is relative.

When you say that a currency is growing stronger, it normally only holds true against a few foreign currencies. In summary, there is no absolute to be drawn about whether or not that currency value by itself has gone up because a currency value is always dependant on another currency. When trading in forex, you are trading currencies in pairs because this way you can make a direct comparison between the value of both currencies.

The 1st currency pair will always be the base currency while the 2nd currency pair will be the quote currency. An easy way to remember is buying and selling a currency pair will always affect the FIRST currency directly.

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Even on the standard account, FXCM provides low commission rates and average tight spreads. We searched average spreads of major Forex pairs for standard accounts, listed below:.

Forex Trading Malaysia - A Beginner's Guide - LearnBonds MY

It is important to note that Active Trader accounts are charged a commission per trade , in addition to the reduced spreads, in contrast to standard accounts, which are charged only the spreads. FXCM has its platform called Trading Station , which includes various types of orders, advanced charting applications and indicator presets. In addition to this platform, other trading platforms are also available: MT4 , ZuluTrade e Tradingview. You can also trade manually with the AI forex signals at your own pace. In this case, just copy each forex signal and paste it into the trading room.

Open a trading account with the forex broker FXCM by clicking here. A publicly-traded broker, XTB is a brokerage founded in All retail Client Money is held in segregated client bank accounts. There are three types of accounts available from XTB. The standard account has a minimum spread of 0. The Pro account has a minimum spread of 0. The Islamic forex trading account has a minimum spread of 0. There is no minimum initial deposit amount when opening an XTB account.

It is available on the web, mobile, and tablet. XTB also offers the MetaTrader 4 platform. The signals are sent by e-mail and Telegram, requiring only copy and paste into the brokerage account. Open a trading account with the forex broker XTB by clicking here. IG was founded in and has more than , customers worldwide. IG offers two types of accounts, the standard and the other for professionals with a higher volume of trades.

Both accounts have different fees and commissions. The main IG trading platform is web-based. It is customizable, the graphics contain advanced features and allow the insertion of alerts for indicators. IG also has a mobile app for you to invest anywhere. You can use the AI signals in the IG accounts.

Open a trading account with the forex broker IG by clicking here. Pepperstone was founded in Australia in and quickly became one of the largest forex brokers in the world. Pepperstone is not a publicly-traded company. Pepperstone holds all client funds in segregated accounts held with a tier-one Australian bank. With two types of account, Razor and Standard, Pepperstone offers variety in its pricing plan.

An insight into the world of Forex trading in Malaysia

The Razor account is commission-based and offers a minimum spread of 0. The standard account is based on commission incorporated into the prevailing spreads. You can access the comparison of these platforms here.