No one intentionally chooses a bad forex broker. It occurs since the red flags become buried beneath slick websites, competitive spreads that are being promoted in large fonts, and bonus offers that seem to be free money until you finally read the fine print regarding withdrawal terms. The Malaysian traders have lost a lot of capital collectively to brokers who were either pure frauds or just below the acceptable standards. It is the same cycle time and time again excitement over trading, little research into the broker, painful experience, costly lesson. The first step to the process of breaking that cycle is to change the amount of attention given to broker selection before a single dollar is transferred. Traders across Malaysia continue to discover new opportunities when they explore what FXCM has to offer.
Everything is based on regulation. Some financial service providers are licensed by the Securities Commission Malaysia and that licensing has a significant implication complaint measures, legal action, regulation. The accountability frameworks of brokers who are regulated by established international agencies such as the FCA, ASIC, or MAS are similar. The presence of an unlicensed offshore broker working on a non-regulated basis is not necessarily a risk to take, but a bet where the house makes all the rules and rewrites them as they see fit. Always verify the investor alert list of the SC prior to opening any account. The reason why that list exists is that enough Malaysians lost enough money to warrant such a list.
It is in the trading costs that brokers express their real character in a low profile manner. The spreads expand in the course of news. The daily accumulation of swap rates on overnight positions is a daily accrual. After some idle weeks, the inactivity charges are charged. Account types have wildly different commission structures. No one of these appears to be catastrophic in itself, but a combination of them causes a lot of drag to trading performance. A broker with a moderately broader spread and clean execution and quick withdrawals is truly worth more than a broker with so-called razor-thin spreads and persistent slippage on big impact data releases. The total cost of trading is important, not the headline figure.
The withdrawal reliability should have a separate research session. Use the name of the broker, in conjunction with withdrawal problem or withdrawal delay in the Malaysian forums, Reddit, and Facebook trading groups. Patterns surface quickly. Legitimate brokers make withdrawals in an expected and non-manufactured way. Problem brokers have ingenious justifications to postpone, introduce verification conditions not described at signup, or suddenly acquire technical problems just as withdrawal balances start to be significant. A Malaysian trader once said that it took eleven weeks to get a withdrawal that had a promise of three business days. That is not an unusual story to be shocking anymore.