Formal Name: Federation of Malay States
Local Name: Malaysia
Local Formal Name: Persekutuan Tanah Melayu
Trend Following Investment Research
Trend Following Investment Research is a publisher of trend following trading strategies reaching thousands of investors globally. Our unique edge is an extensive network within trend following, behavioral economics and risk management. This allows us to teach decades of outstanding performance. Our approach is to provide customers with a single product requiring no extra purchase. Delivering a comprehensive service of trading systems, risk management strategies and psychological guidelines allows our customers to trade in less than thirty minutes per day. Giving us your money is giving us your trust. And our goal is always to make sure that what we give you is more valuable than what you give us. That straightforward business principle is the foundation of our long-term relationship with all clients.
Trend Following Podcast
Our highly ranked podcast Trend Following now reaches over one hundred eighty-eight countries with over 3.5 million listens. Guests (all guests) include world-class thinkers, psychologists, economists and traders.
Malaysia and Systematic Trading
Malaysia is one of Southeast Asia’s most dynamic economies and one of the world’s most significant producers of palm oil, rubber, and liquefied natural gas. Bursa Malaysia, the national stock exchange, lists companies across financial services, energy, and commodities sectors. The Kuala Lumpur Composite Index and its futures contracts provide systematic traders with direct access to Malaysian equity market trends. The Malaysian ringgit’s relationship to the US dollar and regional Asian currencies produces currency trends that global systematic approaches track through regional currency futures and forex markets.
Malaysia’s most direct connection to global systematic trading is through palm oil. Malaysia is one of the world’s two largest producers of crude palm oil, alongside Indonesia. The palm oil futures contract on Bursa Malaysia Derivatives (BMD) is one of the most actively traded agricultural futures contracts in Asia. Global food price trends, driven by palm oil demand from food manufacturers, biofuel producers, and emerging market consumer growth, produce sustained directional moves in the BMD palm oil contract. A systematic approach that includes agricultural commodity futures is capturing Malaysian price dynamics whether the trader is based in Kuala Lumpur or London.
The Malaysian ringgit is particularly notable in the context of systematic trend following because of its history during the 1997-1998 Asian financial crisis. Malaysia was one of the most severely affected economies, with the ringgit falling sharply against the US dollar as hot money fled the region. Soros’s comments about the crisis and the George Soros zero-sum exchange documented on TurtleTrader are directly relevant to this period: the systematic trend followers who were short regional Asian currencies, including the ringgit, captured returns from the same currency moves that produced economic distress in Malaysia and its neighbors. The trend was in the price. The rules responded to the price.
Prime Minister Mahathir’s subsequent imposition of capital controls on the ringgit in September 1998 was a rare intervention that temporarily removed the ringgit from global currency markets. This episode is instructive for systematic traders who operate in emerging market currencies: political intervention can alter the character of a trend or remove a market from trading entirely. Diversification across many markets simultaneously provides structural protection against any single market becoming untradeable due to regulatory or political intervention.
For Malaysian traders accessing global futures markets, systematic trend following provides diversification from the ringgit’s managed exchange rate dynamics and from the concentrated commodity and financial exposure of domestic Malaysian markets. The approach requires less than thirty minutes per day and produces returns that are structurally uncorrelated with Malaysian domestic market conditions.
Frequently Asked Questions
What Malaysian markets are most relevant for global systematic trend following?
The BMD crude palm oil futures contract is the most globally significant Malaysian futures instrument, reflecting Malaysia’s position as one of the world’s largest palm oil exporters. The KLCI futures on Bursa Malaysia provide access to Malaysian equity market trends. The ringgit’s exchange rate dynamics produce currency trends in regional forex markets. Each of these markets produces the sustained directional moves that systematic trend following is designed to capture.
How does Malaysia’s palm oil production affect global commodity trends?
Malaysia and Indonesia together produce over 85% of the world’s palm oil supply. Malaysian production decisions, weather events in Borneo and peninsular Malaysia, and export policy changes all affect global vegetable oil prices and feed through to substitute commodity prices including soybean oil and sunflower oil. Systematic trend following in agricultural commodities captures these Malaysian supply dynamics as price trends in globally traded futures contracts, regardless of the trader’s location.
What does the 1997-1998 ringgit crisis teach systematic traders?
That political intervention can alter or suspend market dynamics that systematic rules are calibrated to respond to, and that the only structural protection against any single market becoming inaccessible is diversification across many uncorrelated markets simultaneously. The systematic approaches that were short the ringgit and regional Asian currencies during the 1997-1998 crisis captured returns from those trends. When Malaysia imposed capital controls and the ringgit became untradeable for currency speculators, diversified systematic portfolios that were positioned across many global markets were minimally affected by the loss of that single market.
Trend Following Systems
Want to learn more and start trading trend following systems? Start here.
