Forex trading among retail investors and traders in Australia is on the rise as this huge financial market expands in the country and globally. Many currencies trade in the forex market, and the Australian dollar (AUD) — also known by its nickname “the Aussie” — is among them. This currency is issued and managed by the Reserve Bank of Australia (RBA) which acts as the country’s central bank.
Furthermore, the Bank for International Settlements (BIS) ranked the AUD 5th among April 2016’s most actively traded currencies when it then made up 6.9 percent of forex market turnover. The AUD was also ranked 6th among currencies held as central bank reserves, making up 1.5 percent of Q3 2018 reserves, according to the International Monetary Fund (IMF).
What is ASIC?
The primary financial sector regulatory agency in Australia is known as the Australian Securities and Investment Commission (ASIC). This organization supervises all financial markets in Australia, in addition to the settlement and clearing of securities in the country.
ASIC operates under the authority of Australia’s Corporations Act and Market Integrity Rules. All forex brokers with Australian offices must be authorized to operate by ASIC before starting to accept clients there.
Another relevant regulatory body for Australian traders, especially if they trade stocks and other exchange-traded securities, is ASX Compliance that is a separate division of the Australian Stock Exchange (ASX). ASX Compliance oversees listed entities and market participants to make sure they comply with the ASX listing and operating rules for all of its exchange-traded markets. ASX Compliance works closely with ASIC to alert the government regulator when it observes possible rule violations or other relevant issues.
What to Consider Before Trading Forex
When considering your choices for the best ASIC-regulated forex broker, the one you select is just as important as how you trade, so choose wisely. Open an account with a reputable broker that you feel safe with since you’re entrusting them with your margin deposit.
Before starting to trade forex, think about how you intend to operate in the currency market. Listed below are some of the key considerations to take into account before trading in a live account:
- Devise a trading strategy: Every successful trader needs to know what their strategy will be for making money trading forex. Whether you are a scalper, a day trader, a swing trader or a trend trader will determine the time frame in which you hold positions and how you manage them.
- Choose currencies to trade: Some currency pairs have much tighter dealing spreads and so are more appropriate for certain strategies like scalping. Other currency pairs can show impressive long-term trends and may be more suitable for trend traders, so choose your currency pairs wisely and in a way that suits your chosen strategy.
- Write down a realistic trade plan: For best success trading, you will want to plan out exactly how you intend to trade and write it down. You will then need to have the time, discipline and financial resources to be able to follow your plan accurately in a live trading environment.
- Choose the best forex broker: The broker you choose to trade with can strongly impact your success as a trader, so choose one wisely after first assessing your needs in detail.
- Open a demo account: Just about every online broker will provide you with free access to a demo account funded with virtual money so that you can try out their platform and practice trading. You can also use demo accounts to test your trading plan with to make sure you can operate it profitably.
The Best ASIC-Regulated Forex Brokers
Each of the top ASIC-regulated forex brokers listed below accepts Australian clients. Although forex traders based in Australia will typically select an ASIC-regulated broker to deal through for their own protection, other international brokers may also accept them as clients.
When selecting the best online brokerage firms regulated by ASIC, keep in mind the broker you choose is as important as how you trade. Also, the amount of leverage you can use, the assets you can trade, the available trading software and the required amount for a minimum margin deposit can vary substantially between brokers, so review each broker carefully to make sure they can fulfill your requirements.
Best for Access to Foreign Markets: Interactive Brokers
Interactive Brokers is a top U.S.-based online broker that was founded in 1977. It allows you to trade more than 120 world markets, including stocks listed on the Australian Stock Exchange (ASX). Regulated in the U.S. by the National Futures Association (NFA) and the Commodity Futures Trading Commission (CFTC), Interactive Brokers accepts clients from Australia via its Interactive Brokers Australia Pty Ltd. subsidiary that is duly regulated by ASIC.
In addition to forex pairs, Interactive Brokers lets you trade stocks, futures, options and options on futures, bonds and funds. Its top-rated trading platform TraderWorkstation (TWS) is available in both Windows and Mac versions and is geared toward professional traders. Interactive Brokers also offers a mobile option for iOS and Android, as well as a more basic trading platform called Client Portal.
Although you might find the Interactive Brokers commission schedule somewhat complex, its fees are competitive to suit high-volume trading. It also offers extensive research and educational materials for traders who need that. This broker does charge a fee for inactive accounts.
Best for US Clients: FOREX.com
FOREX.com is the leading online forex broker in the U.S. for client assets. It submits to strict regulation under the CFTC and NFA, as well as ASIC and accepts Australian clients.
You will need a minimum deposit of $250 to open a trading account at FOREX.com. Although the maximum leverage ratio is only 50 to 1, you can trade micro lots if you want to take lower risk to start with.
With respect to trading platforms, FOREX.com offers its own proprietary trading platform and also lets you use Metatrader 4 or 5 (MT4/5) and NinjaTrader. The broker supports platforms for trading on desktop, web-based or mobile devices.
Best in Australia: Vantage
Vantage is a forex trader and CFD market for anyone in Australia. You can also trade indices, commodities and cryptocurrency if you like. With quality liquidity and the capacity to handle high volume traders, Vantage also offers:
- Low fees
- A 50% welcome bonus
- Negative balance protection
- Easy deposits and withdrawals
You can register with Vantage in just a few moments. Plus, the platform has 24hr support and opens accounts for Islamic traders who don’t want to earn money based on interest. Choose from 40 FX pairs, over 200 CFDs, several indices, oil, gas, gold and much more.
One of the Best for Low Deposits: Plus 500
Plus500 is a CFD broker founded in 2008 in Israel that has an ASIC-regulated Australian subsidiary and accepts Australian clients. The broker is also regulated by in the UK, Cyprus and Singapore.
You just need a deposit of $100 to get started with an account at Plus500, and you can trade an exceptionally wide range of more than 2,500 assets. The broker does not provide support for MT4/5, and its proprietary trading platforms have similar functionality but lack the user base and third party software that MT4/5 is so popular for.
72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Best for MetaTrader4 Users: IG
Founded in 1974 in the UK, IG is an online forex and CFD broker that also offers spread betting. It is regulated by the FCA in the UK and by ASIC in Australia, and it accepts Australian clients.
IG uses a popular broker model that features straight through processing (STP) for order execution and it offers direct market access (DMA) for share trading.
You’ll need at least 0 to open a trading account with IG that will let you trade forex, shares, commodities, exchange-traded funds (ETFs), cryptocurrencies and indices. Its supported 3rd-party trading platforms include MT4, and the broker also offers its proprietary app for mobile trading app and a web-based trading platform.
Best for Mobile Trading: OANDA
U.S.-based OANDA was founded in 1996 and is strictly regulated on its home turf by the NFA and CFTC, as well as by ASIC and the UK’s FCA. The broker accepts Australian clients and offers competitive dealing spreads in over 70 currency pairs.
While you do not need to make any initial deposit to open an account at Oanda, you do need to deposit funds to trade on margin. Oanda supports the MT4 and Ninjatrader platforms as well as offering mobile, web-based and desktop trading options. Oanda also provides a strong set of educational resources.
Virtually all online brokers provide a website and customer service personnel who speak English, so Australians should experience no communication challenges when selecting a forex broker from the list above.
In addition to choosing an ASIC-regulated broker to trade through from Australia, you’ll want to research the broker’s reputation with its customers and make sure it segregates client funds from its own. Once you feel comfortable with a broker, you can open up a free demo account with them to test services and start practice trading.
Get a Forex Pro on Your Side
FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets plus spot metals with low pricing and fast, quality execution on every trade.
You can also tap into:
- EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
- Powerful, purpose-built currency trading platforms
- Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program
Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.