Top Forex Brokers in Australia for Forex Trading
Millions of people from all over the world have been using the internet to invest, trade with the purpose of making profit. Australians are no different, in fact they are one of the most active nations in that respect.
Due to the high levels of internet literacy, internet penetration and the higher average disposable income, paired with the non-restrictive regulatory framework, it is not strange that there is a very large number of Australian citizens who trade forex online.
It is basic economics that if a product or service is in high demand, the supply will tend to increase as well. Therefore, it is obvious why there are so many Australian forex brokers. These companies offer Australian traders a chance to make significant profits. Due to heavy competition, brokers offer lucrative bonus offers and very competitive spreads, in order to attract as many new customers as possible, as well as to keep the current ones.
Deposit: $5 Leverage: 888:1
Deposit: $100 Leverage: 1:294
Deposit: $50 Leverage: 1:1000
Deposit: $50 Leverage: 400:1
Deposit: $100 Leverage: 200:1
Deposit: $250 Leverage: 400:1
The Role of the Australian Securities & Investments Commission
Australian Securities & Investments Commission (ASIC) is the name of the independent body which is in charge of regulating forex trade in Australia. The body was initially formed in 1991, as the Australian Securities Commission (ASC) and it currently employs over 1,800 people. The remit of this organisation is to protect customers, investors and creditors, on a federal level and make sure that Australia’s financial services laws are enforced and obliged.
ASIC closely follows the situation with the forex brokers that offer trading to Australian citizens, tries to make sure that no unauthorised brokers will trick Australians into thinking that they are legitimate.
There have been debates regarding the risks of leverage trading and a possibility of limiting the leverage that brokers can offer up to a much lower figure has not been ruled out. There are quite a few countries, most notably US and Japan that limit the leverage up to 50:1 and 25:1, respectively, but there are also examples to the contrary. In the UK for example, there aren’t such limitations and currently one can find brokers that offer leverage up to 1000:1. In Australia currently, you can find brokers that offer leverage up to 500:1.
Basic Forex Trading Tips
Now you know that you have to choose a broker that is licensed by the ASIC, but perhaps you still don’t know enough about forex trade. Making a profit from trading isn’t easy and it sure takes practice and experience to improve your trading skills. But, there are general guidelines that you can follow, which will surely increase your chances of making a profit.
- Set a realistic bankroll.
- Set a maximum percentage of your bankroll that you’ll use for a single trade.
- Select the currency pairs you plan on trading.
- Read expert advice, consult various sources, but draw your own conclusions.
- Don’t chase losses.
Everybody who wants to start trading forex has to understand that it probably won’t become your main source of income and that you need to be very careful with the money you invest in forex. It is best not to use money that you need for something else, and you should definitely not risk your rent/food/utility bills money.
It isn’t very wise to risk your full bankroll on a couple of trades. Make an assessment, set a number of trades you’d like to make per day or per week and then divide the bankroll accordingly. Bear in mind that trading with leverage is risky and you may end up losing most of your initial investment.
That is why the amount has to be small enough so that even a few losses in a row won’t hurt your finances.
Some brokers offer 30 currency pairs, some even more, like 40, 50 or even up to 60. It is not smart to trade a currency pair if you’re not familiar with either currency and it is particularly unwise to trade if you’re not aware with the trade relationships between the respective countries, their economies etc. As an Australian, you probably know most about the Australian dollar and the respective pairs where it is one of the parties. But, it doesn’t mean that you should necessarily trade only Australian dollars.
Most forex brokers offer free learning material such as e-books, video tutorials and even webinars on forex and forex trading. Online you can find a lot of other sources. However, nobody can predict with a full degree of accuracy and nobody can guarantee that you’ll make a profit. If they say they do, they’re lying. Always follow the movement of the price of the gold, it can be a very strong indicator.
Last but definitely not least, just because you’ve lost on your last few trades it doesn’t mean that your next trade will be a profit, the movement of the currency rates is irrespective of your investments. Don’t try to compensate for what you’ve lost by investing even more in your next trade, because you may end up in a vicious circle and eventually lose all your money.
Forex Brokers and Their Offer
Your chances of making a profit will also be increased if you choose the right forex broker, i.e. the one that offers the best prices, bonuses and leverage. Moreover, the whole trading experience will also be significantly better if you choose the right broker. That is why you should definitely pay attention to the following things, inasmuch as each of them is important to you.
- Offered pairs – We already said that some Australian forex brokers offer a large number of pairs. If you intend on trading minor and exotic pairs, then this part of the trade offer will be of extreme importance to you. If you plan on sticking to the most commonly traded pairs, then it won’t be of great significance.
- Leverage – As you know the leverage is still not limited by law in Australia, therefore you are allowed to trade with a very high leverage, if you’re confident enough.
- Spread – Most forex brokers make their profit through the spread, the thinner it is the less profit for the broker and more money for the traders. Therefore, it is of extreme importance for every trader to have a broker which offers pretty competitive spreads, so that profits can be maximised/ losses can be minimised.
- Bonus – Many brokers would offer you an extra amount to trade with right after you register an account, or immediately after you make your first deposit. If it is a First Deposit Bonus, it’ll usually match your first deposit up to a certain amount, whereas if it is a No Deposit Bonus, it will be a fixed amount. By claiming and using the Welcome Bonus (and the other bonuses that a broker may offer), you increase your chances of making a profit, as you get more trading money at your disposal.
- Deposit and withdrawal options – All registered and licenced brokers ensure and guarantee the safety of the transactions that take place through their website, but some offer fewer options than others. Also, some brokers charge deposit and/or withdrawal fees, whereas others don’t. We don’t have to explain why brokers that offer more options and don’t charge any fees are better.
- Trading platforms – Most brokers offer their traders a chance to trade and check how their trades go on their mobile devices. In addition to that, most brokers offer more than one platform, where each platform includes different features and options. Some are more complex and are aimed at more experienced traders, whereas options are more basic.
There are some other issues that might be of importance to traders, like customer support, user-friendliness of the trading website and the quality of the learning materials, as most brokers provide at least some sort of tutorials and other useful information regarding forex trading.
No, currently there isn’t a limit applied and many Australian brokers offer leverage as high as 500:1, but there have been several discussions regarding the introduction of a leverage limit and that option hasn’t been ruled out.
Yes, forex trading gains and losses are taxed under Income Tax Assessment Act of 1997, or more specifically, Division 775 and Subdivisions 960 C and D.
Currency gains and losses are subjected to taxation only in the event when they are ‘realised’. According to the legal provisions, there are several realisation events for foreign currency, the following ones – disposal, ceasing to have a right to receive, ceasing to have an obligation to receive/to pay and ceasing to have a right to pay (foreign currency).
Yes, Australian traders who are trading through brokers licenced in Australia will receive their bonuses in Australian dollars.
Due to the unique nature of Australia’s economy which is heavily dependent on the price of commodities that Australia exports. The Australian dollar is pretty independent from other major currencies, but it is highly volatile, which makes it a very interesting currency for speculative traders.