Trading Binary Options in Malaysia

For Malaysian investors, trading binary options is a tax-free form of investment with very fast results – minutes and not months or years. The word binary is used because there are only two possible outcomes – either the trade is successful, and the investor earns a significant return (usually between 75% to 95%) – or the trade is unsuccessful, and the full investment amount is lost. However in 2018, European regulators banned the sale or promotion of binary and digital options to retail investors in the EEA. This includes Malaysia. Only professional clients or professional accounts are currently allowed to trade binary with regulated firms. A professional trader must meet 2 of these 3 criteria:

1. Open at least 10 ‘significant size’ trades per quarter (brokers define ‘significance’ differently)
2. Have a portfolio or trading capital of €500k or more
3. Have worked for 2 years in the financial industry, or have experience with complex trading instruments.

Unregulated firms cannot comply with the new ESMA rules, and will continue to accept UK traders. This increases the risk for the trader, and makes the broker more reliable. However, it is possible to find brokers regulated outside the EU that will accept EU traders, and are still regulated by a respected body. So, ‘binaries’ (or ‘digital options’) are a high-risk form of investment, but that risk is offset by the potential for very high rewards with minimal waiting time. Most brokers are regulated, offering users the type of protection they expect when using this type of financial instrument. Returns from binary trading are also now seen as tax free by HMRC.

What Are Binary Options?

Binary options – Binary options are derivatives, traded on any asset or market. For example, stock prices (Twitter, AstraZeneca etc), indices (FTSE, DAX, Nikkei), commodity values ​​(gold, crude oil) or foreign exchange rates (EUR / USD, GBP / USD). Even cryptocurrencies like Bitcoin or Ethereum can be traded. The main difference between traditional and binary stockbroker trading is the clear identification of risk and reward  before  the trade is made. An investor knows how risky, and critically, also knows the true value of any potential return. No level of calculators, formulas, or math is required to make profits and losses on binary options. This trading structure is what has led to the terminology ” all or nothing  ”, or “  cash or nothing  ” are widely used. The only decision for a trader is if the value of the underlying asset will go up or down. The degree of price change is not important. Traders simply speculate whether the price will be higher or lower than the current price, at a certain time in the future. Short-term price movements can be triggered by news or headlines, quarterly statistics, buying rumors or even global security concerns. Binary options trading offers Yes / No recommendations. Although there are variations on the High / Low option, this type of investment will always have a  binary outcome black and white, Yes / No. Where a trade can be closed, redeemed or sold mid-trade, the payout has an absolute number of 0 and 100 and the price moves between the defined markets – until the close.

 

 

Expiration time Every binary option is offered with an expiration time. This is the point where the trade will end. So the price at expiration is what will determine whether the option has won or lost (“in the money”, or “out of the money” in binary jargon). This expiration time can vary from just 30 seconds or 1 minute, (known as ‘turbos’), to a full day (‘end of day’), even longer in some cases – rolling up to a full year. In general, binary options are used for short-term trading – usually under 30 minutes (5 minutes is the most popular). Long-term expiration – and a constant element of risk – make it a useful tool for hedging or diversifying other holdings. Repayment depends on assets and expiration time. The difference can be significant so traders looking to use binary options long term need to shop around to find the best payout for the asset class (or classes) they are trading. A legitimate investment Although binary trading is in a period of growth, it remains a relatively unknown product. Over time, this may change. As digital options (as they are also known) offer a very simple fiscal arrangement. They are a legitimate way to play the financial markets. Binaries offer clear trading options, but they are also high risk / high reward. However, there is no leveraged exposure with binary trading, so the risk and reward ratio is also easy to manage.

Are Binary Options Safe? Binary options have a bad reputation. This is essentially the result of dishonest and irresponsible marketing and cybercrime, more than a problem with the product itself. With tighter regulation, and better understanding by the wider public, this option can – and will – move into the financial mainstream. Which was originally developed. While FCA regulated agents and businesses may still have their flaws and faults, they are not frauds. The angry emails we receive are entirely focused on unscrupulous brokers who promise “easy money”, or a path to “get rich quick”. Read our section on avoiding fraudulent brokers below.

Advantages of Binary Trading

Most of the advantages of using binaries are related or associated. Here we list some of the benefits of using this form of investment – ​​not only for retail investors, but also for market makers or brokers: Risk Management Managing risk when trading binary options is clear. Trading volume is the full amount at risk. This explains the risk not only for traders, but for brokers as well. Their pricing model reflects accurate knowledge of their liabilities. Trading Fees And Spreads Risk certainty provides a solid foundation for brokers to work within and manage. This leads to low trading movements, tighter spreads and higher payouts. To further protect yourself, they may use liquidity providers or hedge their own. Expensive brokerage costs to buy a house become unnecessary. Leverage Leverage, or gearing, is usually not available with binary trading. This benefits the broker again, as it means that all trades must be fully funded. In other words, no trader can default on a trade. With leverage, if things go wrong, there’s a real risk the broker won’t get paid. This is a big difference vs forex or spread betting. Merchant Options Layers of complexity can be added to standard fixed payment options. From ladder options, to border trading or ‘nesting’ more advanced options to create ‘strangles’ etc – binaries can be used in many ways. Binary trading offers the highest level of flexibility. They also provide mechanisms for speculating on flat markets, arbitrage, or taking views on trading volumes of the underlying asset.

 

 

Robots and Auto Trading

Automated trading robots (‘bots’) often rely on signals and algorithms triggered by price graphs. Again, these robots attract many unwanted operators, and the automated nature of trading further increases the risk. New traders should be careful. A great deal of ‘due diligence’ is required when trying to find the right robot service. An alternative approach is for traders to build their own robots using their own entry points. Most brokers now offer traders the ability to place their own trading robots or programs, using simple tools. These hacks allow a combination of technical analysis analysis, such as moving averages, Bollinger bands or RSI / MFI patterns, which then open trades when the criteria are met.

Top Robots

Fraud

Binary trading itself is legitimate, and not a scam. However, brokers and signal providers are unreliable and operate scams or scams. It is important not to write off the concept of binary trading, solely on the basis of dishonest brokers. These fraudsters continue to drag the image of this form of commerce. Regulators, and rule makers are slowly starting to get a handle on these operations and the industry is being cleaned up. If you want to complain about an operator to our moderators, please let us know via the Contact Us page.

Being aware of the above methods will help those who are new to binary trading to avoid less responsible brands. Increased regulation and more awareness is expected to reduce this type of complaint. This in turn allows the binary to move forward.

 

 

Trading Strategy

Our strategy page includes more than 20 known systems, taken from various forums and club discussions, as well as expert tips and advice. From high risk Martingale, to complicated systems like Rainbow. We also cover more specialist subjects, such as forex, technical analysis, best price action indicators, trading signals and winning strategies. All of this is meant to help you gain an edge, and win.

Signal

Signals are warnings, sent to traders. They are designed as trading tools, helping traders to spot opportunities. They can be delivered through a variety of methods – email, SMS or from a website or direct message group. Much of the irresponsible marketing associated with binary scams is linked to signals – or auto trading robots using them. There are some excellent providers out there as well. However, in general, learning how to trade binary is a safer route than using signals to compensate for a lack of trading knowledge. Does the signal work? Sometimes, but rarely in isolation. Some providers deliver a combination of  education together signal and that is a good combination. Traders must be able to fully evaluate signals before being able to judge their quality. We also highlight some of the best providers on the signal page.

Brokers And Reviews

Binary options can be used in a number of ways, and across a wide variety of commodities and markets. This means finding the best trader, the best account, or the best trading platform, really depends on the needs of the individual investor. For example, some brokers may focus on forex (foreign exchange) and trade Japanese Yen, Euros or sterling. Others may be strong on commodities and only offer a handful of FX markets. Likewise, returns (or fees ) may differ between asset classes, and with this varying by 25%, it’s easy to see the importance of making the right selection. payment methods White label platform providers such as SpotOption, Tradologic or TechFinancials also determine the products that the host site can offer, so an exclusive broker with a better design might be better. Payment methods include thinking – if traders want to use Skrill, Paypal, Neteller or Wire transfer, they need to check the broker that delivers them. Trading Apps Mobile trading apps delivered by binary brokers or agents can also vary in quality. Some programs specifically for specific model features, such as iPad or iPhone. Others ensure cross-platform compatibility, catering for android, tablets and tablet and tablet devices. Some dealers may adjust requests for any handheld application, others less so. Trade size limits may indicate some investors either on, or away from, certain trading accounts. Some brokers offer a minimum trade of £1, while others accommodate investors willing to invest £200,000 in a single trade. So every investor should consider their own trading style before deciding to open an account. Even working at the cheapest broker is not that easy. How to Compare the Best Trading Platforms Our comparison table presents a quick summary of the main points when comparing brokers. Our detailed review then allows potential new users to evaluate some of the finer points that may confirm their decision. Here is a list of some important comparison points for brokers;

• Payment
• Over the counter or currency exchange option
• Minimum deposit (Plus deposit and withdrawal method)
• Minimum trade / Maximum trade
• Trading platform
• News feed
• List of assets (Extended list may include ETFs, bonds and trusts)
• Chart Tools / Indicators (Types of graphs, forecasting tools)
• Expiration time available
• Regulation (FCA, CySec, CFTC etc)
• Range of options available (Border, Ladder, High Yield etc)
• Welcome Bonus
• Complaints / Customer Feedback
• Account Types and Benefits (VIP, Basic, Platinum)
• Plugins and Integrations. (Example MT4 / MetaTrader4 / MetaTrader 5)
• Promo Prizes, Contests, Mainboards or Contest Prizes

Some points may be more important to certain traders than others. So finding the “best” will be an individual choice for each new customer. A speculator taking a position on the monetary policy of the Bank of England or the ECB may be best served by one broker, while a person looking to bet on the growth of the share price of Apple, Facebook or Vodafone may want another.

Demo Account

Most of the top brokers offer demo trading accounts. This allows new customers to try the services offered. They can see if various markets and investment scales suit them and only move on to funded accounts when they are happy that the right trading account has been found. Those brokers who provide training or virtual balances, have confidence in their trading platform. They are willing to let new traders see it, and try it out, risk-free. The overview for each broker will include whether it offers a demo in the “Key Details” section.

 

 

Trial Websites And Apps Most of these demo accounts will work on both websites, as well as mobile apps. Both systems can be checked before making a deposit. The best demo accounts have no time limit, and allow the trader to ‘top up’ the balance if needed. This type of account allows the user to not only try the broker, but also use a demo account to try new trading strategies, or even test strategies based on past financial data. All without risking any of your own money or wealth.

Reviews

Our broker reviews are written after genuine trades on each platform, brand, or white label. They include all aspects of each supplier – good or bad. The credibility of reviews is important to us. So, they are checked and updated regularly and the feedback we receive is part of the overall assessment. For binary trading to move into the financial mainstream, comparison services need to be open, honest and transparent – ​​and that’s what we try and deliver in our broker reviews.

Rules

Intermediary brokers are regulated by several bodies. CySec regulates the majority of brokers based in Cyprus and Israel. Operators with equipment in the UK need a license from the UK Gambling Commission (the concept was originally categorized as ‘betting’ in the financial markets – a view that has now changed). However, European regulations allow suppliers to serve British customers. MiFID II legislation allows this ‘passport’ of regulatory powers. However, in the UK, a stronger layer of consumer protection is available if the broker is regulated by the Financial Conduct Authority (FCA). Some companies also  register with the FCA – but this is not the same as regulation. This is an important distinction. In the US, the CFTC only licenses two brokers to operate there – Nadex and CBOE. In Australia, ASIC (Australian Securities and Investments Commission) oversees brokerages. Some companies are also regulated by the Malta Authority, or the Isle of Man GSC. In Europe, an organization called ESMA (European Securities and Markets Authority) also proposes laws or regulatory guidelines that the majority of domestic regulators adhere to. They recently suggested that binary options should be banned to attract investors – although this policy is rather ill-conceived and out dated. Such changes would penalize honest regulated brokers, leaving dishonest scams to continue operating. Benefits of Using a Regulated Broker Regulated brokers offer greater consumer confidence than unregulated companies. They are responsible for maintaining the trader’s funds in a separate account, and not in the company’s account. They must provide a dispute process for customers, and treat customers fairly and equitably. In addition, regulated firms can only market responsibly, and in areas where trade is permitted. Responsible brokers welcome regulation as a way to increase consumer confidence. They must provide a dispute process for customers, and treat customers fairly and equitably. In addition, regulated firms can only market responsibly, and in areas where trade is permitted. Responsible brokers welcome regulation as a way to increase consumer confidence. They must provide a dispute process for customers, and treat customers fairly and equitably. In addition, regulated firms can only market responsibly, and in areas where trade is permitted. Responsible brokers welcome regulation as a way to increase consumer confidence.

Trade Copy

Copy trading is a growing investment sector. It allows users to copy other people’s trades. The copier determines how much to invest, and whether to copy some or all trades of a particular trader or tipper. Copy traders also benefit, as brokers will often reward clients through commissions, or increased income and profit margins based on the volume of trades they generate. Copy trading (or ‘social trading’) is a useful function for people without the time or knowledge to trade themselves. When copying however, the time and effort spent finding the right traders to follow will pay dividends. Social trading is similar,

History

Brief history: The concept of binary, or ‘digital’ options, has been around for many years. They were initially only available to large-scale investors – institutions, wealthy individuals and funds. Options are available ‘over the counter’. In 2008 however, the US Securities and Exchange Commission allowed these fixed return options to be traded on exchanges. This allows the Chicago Board Options Exchange (CBOE) and the American Stock Exchange to offer binary trading on certain underlying assets. Initially, the range of assets is limited, as is the choice of options. Nadex also began offering currency exchange options (matching buyers and sellers) in the United States as the market developed. Demand For Digital Commerce Grows Yet as popularity and commerce grow, traded assets are moving beyond Forex and equity and options types are expanding as well. Rapid developments in software, and the globalization of commerce, led to an explosion in these ‘digital’ options – and the trend of expansion continues. The barrier to entry for market makers or brokers is potentially much lower in the binary sector. This, coupled with the boom in internet commerce over the same period, has caused regulation to lag behind the industry. However, binary growth may not slow down. Simplicity, coupled with clarity of risk, allows almost anyone to take a view on a particular asset but manage their risk more easily than with a contract for difference or stock purchase. Rapid developments in software, and the globalization of commerce, led to an explosion in these ‘digital’ options – and the trend of expansion continues. The barrier to entry for market makers or brokers is potentially much lower in the binary sector. This, coupled with the boom in internet commerce over the same period, has caused regulation to lag behind the industry. However, binary growth may not slow down. Simplicity, coupled with clarity of risk, allows almost anyone to take a view on a particular asset but manage their risk more easily than with a contract for difference or stock purchase. Rapid developments in software, and the globalization of commerce, led to an explosion in these ‘digital’ options – and the trend of expansion continues. The barrier to entry for market makers or brokers is potentially much lower in the binary sector. This, coupled with the boom in internet commerce over the same period, has caused regulation to lag behind the industry. However, binary growth may not slow down. Simplicity, coupled with clarity of risk, allows almost anyone to take a view on a particular asset but manage their risk more easily than with a contract for difference or stock purchase. The barrier to entry for market makers or brokers is potentially much lower in the binary sector. This, coupled with the boom in internet commerce over the same period, has caused regulation to lag behind the industry. However, binary growth may not slow down. Simplicity, coupled with clarity of risk, allows almost anyone to take a view on a particular asset but manage their risk more easily than with a contract for difference or stock purchase. The barrier to entry for market makers or brokers is potentially much lower in the binary sector. This, coupled with the boom in internet commerce over the same period, has caused regulation to lag behind the industry. However, binary growth may not slow down. Simplicity, coupled with clarity of risk, allows almost anyone to take a view on a particular asset but manage their risk more easily than with a contract for difference or stock purchase.

Education

To learn binary options, traders have many learning opportunities and courses. Every trader is different, the results will change from different learning methods. Some may prefer pdf files or spreadsheets on the subject, while others will learn the most from diving in and getting some hands-on experience. Here is a selection of learning methods:

• Seminars and demonstrations
• eBooks / Manuals / Books
• Video & Youtube binary tutorial
• Hands on demo account
• Knowledge base and FAQ page

Learn Binary Trading Through Tutorials Brokers are keen to give traders the confidence to start trading – and many offer some or all of the above for potential new clients to learn binary options, generally for free. Some tools are only available when a trader has registered – this is simply so the broker has some contact information for things like trading seminars or web-based demonstrations. Seminars and Demonstrations The best way to learn binary options is through online demonstrations or seminars. Some brokers offer weekly seminars, some in multiple languages. This offers a ‘walk through’ style demonstration which can be very useful. Other firms will offer one on one training, but generally requires a deposit in advance. These exercises will follow a basic “How to” format, but can then quickly move to more advanced subjects as needed. eBooks Some traders benefit from downloading eBook tutorials, and learning about binary options at their own pace. In their education Centers, brokers often deliver great ‘manuals’ for traders who want to learn the basics. One note of caution, is that each broker will focus on their own trading platform and quotes for some explanations and screen shots. eBooks Some traders benefit from downloading eBook tutorials, and learning about binary options at their own pace. In their education Centers, brokers often deliver great ‘manuals’ for traders who want to learn the basics. One note of caution, is that each broker will focus on their own trading platform and quotes for some explanations and screen shots. eBooks Some traders benefit from downloading eBook tutorials, and learning about binary options at their own pace. In their education Centers, brokers often deliver great ‘manuals’ for traders who want to learn the basics. One note of caution, is that each broker will focus on their own trading platform and quotes for some explanations and screen shots.

Brokers want new traders to use  their services  . The good news is that while the look and feel of some trading platforms will differ, the underlying functionality is the same – so knowledge is easily transferable.

Several independent books have been written, including the popular ‘for beads’ series. We list the best ones here.

Videos Video tutorials are the most popular learning method. Some brokers put more effort than others though, and viewers may even be presented with the same video on different brokers – only my voice has changed! However, there are some excellent video suites, and can be viewed without registering. We have embedded a video from IQ Options introducing their trading platform and online binary trading. They offer a variety of videos on their website. Knowledge base & FAQ Most brokers will provide an educational area or ‘knowledge base’, but the quality varies. Firms are constantly updating their training portfolios, so there are no clear winners in this category. Brokers want to encourage trading, so they make it very easy for traders to learn the basics. More information is harder to get from the broker – but hopefully the strategy and technical analysis pages on this website help. Here are some of the questions and topics we are asked about most often regarding online binary trading. Hopefully this short paragraph provides the answer – but if not, there are some links to more in-depth articles that explain each subject.

 

 

Types of Binary Trading

• The most common types of binary options are simple top/bottom or high/low types. This is a forecast of the direction the price will move. At the point the option expires, does the price go up or down? Also referred to as the classic or standard option.
• A slight variation on the top/bottom trade is the top/bottom option. It follows the same principle, but the target price is a preset level, not the current price. All the same logic applies from the price rising or falling based on that value, and where it will end – but the starting point is somewhere above or below the actual market at that moment.
• Touch / No Touch is a rather complicated scenario. Here, the value or price is set (sometimes by the investors themselves if their broker offers a feature like ‘Option builder’). If the real world price  touches  , or breaks through that barrier, the ‘touch’ option will be paid. If the price never touches the barrier price, then a ‘No Touch’ will be paid and the ‘touch’ bet will be lost. Also called ‘One touch’ at the time.
• In / Out, ‘Range’ or ‘Boundary’ requires two barriers to be set. One is higher, and the other is lower. Binary options then either price stays ‘within’ (or between) those two boundaries. An ‘exit’ option will be triggered, and therefore a payout, if the price finishes outside either or the designated barrier.
• Ladder option. This operates in the same way as the ‘up/down’ option, but the payout varies based on how far the target price is from the current value. There are various levels, and different payouts for each. This is the “ladder” of the ladder. Payouts on ladder options can be as high as 1000% if the required price movement is large enough.
• Pairs is a type of trade where two related assets are matched against each other (eg Gold and Silver) and the trader takes a view on which asset is rising or falling the most.

Put Options And Call Options Put and Call Options are simply terms given to buy or sell an option. If a trader believes an asset will go up in value, they open a call. If they expect the value to fall, they place the trade. Some binary trading brokers change their trading buttons every few seconds, from Call and Put, to Down and Up to avoid confusion. Others omit the terms placed and called entirely, by using arrows. The icon is always clear so mistakes are not made.

Question

How to Place a Binary Trade

Steps to open binary trading;

1. Identify underlying assets to trade such as gold prices, Facebook stock prices or the GBP/USD exchange rate
2. Set the expiration time (Time the option expires), and define the size of the trade or investment
3. Determine if the value will rise or fall (Call or Put)

How Much Can Be Won? In general, binary options pay out in the range of 75% to 95%. This percentage is explained before the trade is made. Apart from being higher or lower than the opening price, the closing price does not affect the magnitude of the payout  . As binary trading becomes more sophisticated, the amount that can be won also changes. Some brokers now offer trades that  don’t depending on the size of any price movement. There are also trade types (covered below) where payouts can reach 400%, 500% or even 1000%. Is Binary Options Gambling? It depends entirely on the attitude of the trader. If a trader does not use strategy or research, then any investment may depend on good luck, and the odds are against them. On the other hand, a trader who makes a trade with good thinking can make sure they have done everything they can to avoid luck. Are Binary Options Halal? Interest, or “riba” is prohibited under Sharia law. Binary options, even those considered long-term, do not incur overnight charges, or rollover fees. Many brokers have developed Islamic trading accounts that comply with Islamic guidelines (offer immediate trade execution, and charge no interest). But traders need to tread carefully before deciding if binary options trading is legal, halal or illegal. The answer may not be clear. A trader may use binaries without a plan, or strategy – effectively making bets or using them to gamble. This will be forbidden for most Muslims. For this reason, we cannot say whether binary trading is halal or haram. It will come down to the individual. But traders need to tread carefully before deciding if binary options trading is legal, halal or illegal. The answer may not be clear. A trader may use binaries without a plan, or strategy – effectively making bets or using them to gamble. This will be forbidden for most Muslims. For this reason, we cannot say whether binary trading is halal or haram. It will come down to the individual. But traders need to tread carefully before deciding if binary options trading is legal, halal or illegal. The answer may not be clear. A trader may use binaries without a plan, or strategy – effectively making bets or using them to gamble. This will be forbidden for most Muslims. For this reason, we cannot say whether binary trading is halal or haram. It will come down to the individual.