What Trading Is All About? For Newbies

Updated: Jan 4

This article is dedicated to the newcomers in the financial market. As a freshie, I am obligated to share the experience of trading in the derivative market to everyone out there who are aspired to become traders.

My journey in the market started with the invitation by the Assistant Manager of Monest Biz (Hazmi Rahim) to join the team as part of the Business Development Program. The team carefully guided me in understanding how the market works and managing the risk of the order we make. They taught me the lesson on how to choose the right broker and the importance of the broker being regulated by any established authority.

Why the right broker?

The experience I had in the derivative market was minimal prior to joining the team in Monest. Therefore, the story of unregulated brokers plugging off their platform was alien to me. After knowing about the risk of trading with an unregulated brokers, I realized that the danger is real. I gathered information on what happened to EssenceFx broker. EssenceFx brokerage, regulated by the Republic of Vanuatu had ceased their operation in Malaysia 4 years. With 89% Malaysian traded their hard-earned money on the platform, it is now has been categorized as a scam syndicate. Little did they know that Republic of Vanuatu is the easiest jurisdiction to open a brokerage with only $2000 capital needed before the operation commenced. People fell to the trap of this money game with a loss rumored to be around $50 million dollar. This is a perfect example why we must always choose the right broker before starting our trading journey.

What’s The Right Broker?

There are thousands of regulated broker across the world. However, it is better to choose an onshore broker. Under The Capital Market Rule under the Security Commission of Malaysia, the rule announced a specific warning on offshore broker. Even though the Security Commission is not yet granting licence to any broker operation in derivative market, it is safe to say the best broker to go for is the ones regulated under the Financial Conduct Authority (FCA). This is because the FCA is strict when it comes to regulating the brokers under their purview. With just one letter of complaint, the broker will be out of business.

Managing The Risk

The importance of trading is to first understand the underlying risk of it. Today, brokers are obligated to state the risk of trading in derivative market on their platform. This is to ensure no one is entering the market without realizing what they get themselves into. Derivative market, just like other market (capital market, securities) have its own risk. That is why it is imperative for the traders to know the technical analysis and fundamental analysis of a particular market before putting their capital at stake. Most importantly, the traders must not treat the market as a gambling avenue.

Reality Check

The market is deemed to be lucrative by many. However, without the right mindset, most will find themselves in a margin call situation (losing capital). The knowledge on the technical analysis and fundamental is vital to ensure that the trading is executed professionally. When trading is done professionally, a trader can make sense of their profit and loss.

By Muzammil Khairi | August 7, 2020

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Monest Sdn Bhd - 1355833-W

Level 11, Boutique Office 1 (B-01-C)

Menara 2 (Pillar 11), KL Eco City,

Pantai Baru, Jalan Bangsar,

59200 Kuala Lumpur,


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