Over the past decade, Malaysia has produced a wave of highly enthusiastic FX traders. This is not because Malaysians have any special or mystical edge over others instead, it comes down to the local conditions such as strong math education, good English skills, low-cost internet, and a cost of living where small profits count, has helped retail trading grow quickly. Walk into any dollar cost averaging kopitiam in Petaling Jaya and you will likely find someone nearby checking an MT4 chart on their phone. That is not an exaggeration anymore. Retail forex activity surged once smartphones made trading platforms easily accessible, and this trend is not expected to slow down anytime soon. 
Malaysian traders soon realize that understanding the ringgit is essential, or they will learn the hard way. USD/MYR is not part of the G10 currency group. It is sensitive to the prices of Brent crude oil since Malaysia is a net exporter of oil and petroleum revenues have a huge impact on government finances. It shifts on regional risk sentiment - in case of anything destabilizing occurring anywhere in Southeast Asia, the ringgit is likely to sense it. Another layer to consider is Bank Negara Malaysia’s history of intervention; it has stepped in before to control volatility, and the possibility remains. Those who focus on these unique drivers instead of broad emerging market models will interpret MYR movements more accurately. The issue of regulatory awareness is critical to FX participants in Malaysia, and one of the most misconceived issues in the local trading circles. Retail forex brokers are not licensed by BNM. The brokers that are most commonly used by Malaysians are Pepperstone, IC Markets, XM, FBS, which are regulated by a foreign authority, such as ASIC, FCA or CySEC. Trading major currency pairs through these brokers is generally accepted. Complications arise when dealing with ringgit-based positions or offshore MYR speculation, which BNM restricts under its foreign exchange rules. Most retail traders are unaffected since they typically trade EUR/USD or gold instead of MYR pairs. However, the understanding of the existence of the boundary avoids some truly preventable headaches.
Malaysian traders soon realize that understanding the ringgit is essential, or they will learn the hard way. USD/MYR is not part of the G10 currency group. It is sensitive to the prices of Brent crude oil since Malaysia is a net exporter of oil and petroleum revenues have a huge impact on government finances. It shifts on regional risk sentiment - in case of anything destabilizing occurring anywhere in Southeast Asia, the ringgit is likely to sense it. Another layer to consider is Bank Negara Malaysia’s history of intervention; it has stepped in before to control volatility, and the possibility remains. Those who focus on these unique drivers instead of broad emerging market models will interpret MYR movements more accurately. The issue of regulatory awareness is critical to FX participants in Malaysia, and one of the most misconceived issues in the local trading circles. Retail forex brokers are not licensed by BNM. The brokers that are most commonly used by Malaysians are Pepperstone, IC Markets, XM, FBS, which are regulated by a foreign authority, such as ASIC, FCA or CySEC. Trading major currency pairs through these brokers is generally accepted. Complications arise when dealing with ringgit-based positions or offshore MYR speculation, which BNM restricts under its foreign exchange rules. Most retail traders are unaffected since they typically trade EUR/USD or gold instead of MYR pairs. However, the understanding of the existence of the boundary avoids some truly preventable headaches.