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Stock trading platform in Malaysia

July 05, 2021

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Trading platforms capabilities for trade stocks in Malaysia

There are many online stock trading platforms available in Malaysia. The question is, which one is the best? As an investor, you have to choose the right platform for online stock trading. As you know, online stock trading is the buying and selling of financial products through an online trading platform. These platforms are usually provided by online brokers and are available to anyone who wants to try to make money in the market.

All the platforms available in Malaysia have and offer a wide range of financial products including stocks, and other financial instruments.

Before opening an account on a stock trading platform in Malaysia, you should take into account the possibilities of trading platforms in Malaysia. 

Regulation and Exchange Membership

Brokers doing business on the Bursa Malaysia must be registered with the SCM and have authority to operate on the Malaysia Bursa for the broker to execute trades on the exchange. All financial companies, including stockbrokers, must be registered and regulated by the SCM.

Trading platform

A broker's online trading platform should allow you to enter orders and receive confirmations on your stock orders, as well as provide access to accurate stock quotes. This trading software should be easy to access, use and configure. Many platforms also provide news feeds and technical analysis t

Research

International and Malaysian full-service brokers usually provide advisory services and research . A full-service broker makes sense if you need investment advice. Otherwise, you may be better off going to a discount broker.

Commissions and Fees

Depending on your trading style, commissions can make a big difference to your profits, especially if you are actively trading. Even if you trade infrequently, commissions matter, and discount brokers usually charge less.

Customer Service

An online broker with a responsive customer service department is a big plus. You can contact most stockbrokers in Malaysia by phone and email.

Stocks quotes

Malaysian quotations are no different from other world stock quotations. There is the same standard data as on other exchanges in the world: company capitalization, trading volume, actual price of the asset and other necessary information.

Stocks trading charts

There are several types of trading charts. Let's consider several of them:

1. Linear stock charts

A line chart is a broken line. Each segment represents the result of trading per unit of time (e.g., 1 minute, 15 minutes, 1 hour). Each point on a line chart is the price (closing price) of an exchange-traded instrument at the end of the selected unit of time. Do not think that line charts are only used on the Internet to inform the general public about current prices. Professionals also use lines. For example, when there are a lot of indicators on the screen, a line chart allows to "unload the picture" and ease the perception of information.

2. Bar charts of stocks

A bar chart differs from a simple line chart in that the bars contain information about price movements over a selected period of time:

  • The left bar line is the price of the instrument at the opening of the period,
  • The right bar line - the price of the instrument at the moment of the period closing,
  • The vertical bar line - the spread of the price from minimum to maximum for the selected time period.

The histogram appeared during the development of the Western markets. In the first half of the 20th century, it was the standard for Wall Street.

3. Stocks hollow candles charts

In addition to the usual Japanese candles, which are completely colored in different colors, there is a variety of chart hollow candles charts. When the close price is higher, the body is not colored, and when the close price is lower, the candlestick body is colored.

In other words: Shaded candles represent a victory for the sellers, and empty candles represent a victory for the buyers.

Indicators for stocks trading

Indicators in the stock market are mathematical formulas, which are based on the study of available statistical data on the course of trading and present it in a visually acceptable form (line, graph, histogram, etc.).

Any indicator is based on some data. For example, it can be average quotations, trading volumes, divergence or correlation between stock market instruments, etc.

Depending on what a particular technical assistant is researching, it can be applied in different ways.

Such technical analysis tools serve for faster data processing by traders and investigation of stock market trends.

MACD for stocks trading

The MACD is an oscillating indicator that moves around zero. It is both a trend-following indicator and a momentum indicator.

One basic strategy based on the MACD looks at which side of the MACD line is away from zero. If it is above zero for an extended period of time, the trend is most likely upward, if it is below it is downward. Potential buy signals occur when the MACD line crosses upward, and sell signals when it crosses downward.

Intersections of the signal line provide additional signals to buy and sell.

MACD Malaysia
MACD Malaysia

The MACD has two lines - a fast line and a slow line. The signal to buy occurs when the fast line crosses the slow line upwards, the signal to sell - downwards.

RSI for stocks trading

The RSI is another oscillating indicator, but because it moves between zero and 100, it provides slightly different information than the MACD.

One way to interpret RSI is to think that the price is overvalued to buy (overbought) and needs a correction when the indicator is above 70, and the price is overvalued to sell (oversold) and needs a rebound when the indicator is below 30. 

Assume that the long-term trend of the stock is upward. A buy signal occurs when the RSI dips below 50 and then goes back up. This essentially means that there has been a pullback in price, and the trader buys as soon as the pullback ends (according to the RSI) and the trend resumes its movement. The 50 mark is used because the RSI usually will not reach the 30 level in an uptrend unless there is danger of a potential reversal.

The signal to sell short occurs when the trend is downtrending and the RSI rises above 50 and then falls back below.

Moving average for stocks trading

A moving average "smooths" the price data by creating one smooth line. The line represents the average price over a certain period of time. Which moving average a trader is going to use depends on the timeframe (time frame) on which he trades. For investors and traders following a long-term trend, the 200-day, 100-day and 50-day simple moving averages are popular choices.

However, moving averages do not make predictions, they simply show where price is moving on average within a certain period of time.

Crosses are another way to use moving averages. Let's plot a 200-day and a 50-day moving average on the chart. A buy signal occurs when the 50-day moving average (Red) crosses upwards into the 200-day moving average (Yellow) and a sell signal occurs when it crosses downwards. The time parameters can be changed according to your individual trading time frame.

Moving average Malaysia
Moving average Malaysia

ADX for stocks trading

The ADX is used to determine the presence or absence of a trend, its direction and strength. The direction of the market is determined by the +DI and -DI lines, while the ADX line is an indicator of trend strength.

The position of +DI and -DI relative to each other can indicate either a bullish or bearish trend. If +DI is higher than -DI, the market is more bullish, and we have an up-trend. If it is the other way round, bears display strength and the market is in a down-trend.

The ADX shows the strength and presence of the trend. If the curve is below 20, then price is stuck in a sideways trend. As soon as the indicator breaks through this level, a medium strength trend begins. Values above 40 indicate a strong trend, either downtrend or uptrend. Often, when the indicator is above 50, the trend begins to fade. As activity decreases, the distance between +DI and -DI begins to decrease and the ADX begins to fall.

ADX Malaysia
ADX Malaysia

The ADX works best after a period of consolidation, and performs less well after a sharp trend change. In addition, like all trend indicators, it shows lagging signals.

Types of stocks

Growth stocks

Growth stocks are stocks of companies that are growing at a rate faster than the average market growth.

Growth companies usually do not pay dividends, these are young, fast-growing companies. They buy shares of such companies in the hope of x-fold growth in value. At the same time, growth stocks may be overvalued by their fundamentals and multiples. Growth stocks exist in most sectors, but right now they are most concentrated in the technology sector or biopharmaceuticals.

The best example in recent times is Tesla.

Value stocks

Value stocks are usually companies in traditional economic sectors (resource extraction and processing companies, trade, construction). Here, shareholders do not expect a sharp increase in the value of the stock, but expect to receive good dividends. On the fundamental indicators, the companies do not look overvalued and the shares are not overvalued. A good example is almost all shares of metallurgical and oil companies.

There are basic hallmarks of value stocks. These securities traditionally have low multipliers P/E (Price/Profit), P/BV (Price/Balance Value), P/S (Price/Sales) and others. They are low primarily in comparison to industry peers. At the same time, value stock investors believe that this situation is due to subjective reasons and will soon be resolved.

It is not uncommon for value companies to experience a significant crisis, just as it has led to a major drop in securities. The crisis may be related to industry problems, corporate events, contingencies, etc. Investors are confident that the company's problems are temporary and too exaggerated.

Quite often, value stocks have good dividends. This is due to that very undervaluation by the market.

Despite the lack of clear prospects for rapid growth, value companies must hold a sufficiently strong position in the market.

Income stocks

Income Stocks - A security that pays regular, often ever-increasing dividends and offers a higher yield than the market average for the stock market as a whole. While there is no definitive benchmark for their classification, most income stocks have lower levels of volatility than the overall stock market and offer higher-than-market dividend yields. Companies whose stocks are "income stocks" may be deliberately limiting their future growth, thereby reducing the required level of capital investment. Excess cash flow can therefore be diverted back to investors.

"Income Stocks" can be in any industry, but are usually companies in real estate (through mortgage investment trusts or REITs), energy, utilities, natural resources and financial institutions.

Investors look to Income Stocks to support their fixed-income, dividend-yielding portfolios, which tend to be higher than those guaranteed by low-risk instruments such as Treasury securities.

 Although income stocks can be an attractive alternative for investors who do not want to risk their principal, their value can decline when interest rates rise.

Blue chip stocks

Blue chips is a name that originated in American casinos in the last century. It was in such institutions that wealthy businessmen interested in investments gathered most often. Blue chips in casinos were traditionally the largest, which led to the transfer of the slang from the gambling table to the stock exchange.

Thus, blue chips in the investment market are shares of the most reliable, large and highly liquid firms in the country and a particular industry. They are characterized by the payment of average dividends, their price, as a rule, remains unchanged, but investors owning shares of such a company can count on a regular, stable income for 10-15 years. 

Only a severe crisis affecting an industry or the country as a whole can disrupt the state of affairs.

Penny stocks

Penny stocks-also known as "junk," "over-the-counter" stocks-are stocks of small companies that trade at low prices. Historically, such securities were considered to be below $1, but now they are considered to be all securities below $5 apiece.

 Transactions in securities of such firms involve higher risks for investors.

How to start stocks trading in Malaysia

Register for stocks trading

In order to trade in Malaysia, one needs to create an account on the broker's website. After that, the trader gets access to the trading platform, analytics, economic calendar and other services available on the company's website.

One cannot do without filling in the form, as the goal of speculators is to make a profit. The broker has no right to receive money and transfer profit to an anonymous user. The company may be suspected of money laundering, which is punishable by law. After spending 2-3 minutes to create an account, a user opens up great prospects.

Features of opening an account

Newcomers often wonder how to sign up for a binary options account. The process is straightforward, you need to click on the "Register" or "Create account" button on the broker's website. A form will then open in which you need to fill in the following details:

  •     Your first and last name;
  •     Your email address;
  •     Your country of residence;
  •     Your mobile phone number;
  •     Your password;
  •      Account currency.

Subsequently, you will be required to complete an extended form with additional information. After that access to the test terminal, services which will help in forecasting of quotations, training materials is opened. A number of brokers will not allow a trader to access these options, unless they make a minimum deposit.

Open demo account for stocks trading

What is a binary options demo account?

The main purpose of a demo account is to enable a user to get acquainted with the market and functions of a trading platform, to apply theoretical knowledge in practice without any risk for capital.

Trader works with a fictitious deposit, but under real conditions, i.e. demo account is a fully adequate emulator of binary options trading. Market conditions and quotations for digital contracts are fully identical with those of the trading platform.

A demo account for newbies is a training tool. Using this option familiarizes the user with the functionality of the trading platform, the available tools, and the ways to open trades with a set expiration date.

Demo accounts are in most cases available without registration, but on some platforms you will need to verify your details and fill out a special form. It only takes a couple of minutes to open a demo account.

Demo account or real account Malaysia
Demo account or real account Malaysia

Open real account for stocks trading

Trading binary options on a real account does not differ from trading on a demo account (depends on the broker), except for psychological burden. 

Opening of the account, depending on the broker, occurs according to certain rules.

The classical scheme is the following:

  •     Registration with filling of data.
  •     Replenishment of the account.
  •     Verificación.

Important! While filling the data it is always necessary to fill it in accurately. The thing is that if someone tries to access your account, or in case of any problems with the system, the broker may ask you to confirm your identity. If the data is entered incorrectly, there is a possibility of losing the account and the money on the account.

Replenish account for stocks trading

After your registration you can make a deposit at your broker. Please note, that when registering you will be asked to choose the currency, in which the trading account will be opened. Be sure to think through and calculate in which currency the account will be opened. After all, you will not be able to change it later. In order to change the currency you will have to re-register. So think about it right away.   Click the "Deposit" button, and the broker will offer you a choice of deposit methods. You can of course make a deposit with a VISA, Maestro, Mastercard or with e-money, the choice is quite big (WebMoney, Neteller, OKpay, Skrill).

Please note, that if you choose for example USD as your account currency during registration, everything will be automatically converted to USD when you deposit in any other currency. The money on the balance is displayed almost instantly, in rare cases there may be a delay of up to 30 minutes. I recommend you deposit and withdraw the money with the currency you specified during registration. Thus, you will not lose on conversions.   After making a deposit, you should immediately start the process of verification of your account.

Verification is a must! It is not a whim of the broker, but a mandatory requirement of the regulator. At every licensed broker the verification procedure is obligatory. When the broker withdraws the earned money, he must be sure that it is yours and not that of a third party.

 So do not delay, pass the verification at once. And beware of brokers, where verification is not required. When depositing with a bank card be prepared for the broker to ask you for a photocopy of the card data. To confirm that the card is yours, take a picture of it on both sides. On the front side of the card close 4 digits and on the back side close your CVV code. You do not need to take a picture of your personal account when making a deposit with e-money.