Do we need to enable monitoring for VM in order to monitor Oracle Cloud Compute VM using REST API or Java SDK?

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We have to set policy in IAM for API users in order to be authorized. Other than this, any thing has to done?

Also in different ways of monitoring (REST API, Java SDK, using Oracle Cloud Agent), In which way we need to 'Enable Monitoring'?

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Yes, please see this doc for details on the required steps.

Here's an example that shows how to enable / disable instance monitoring from the Java SDK: link