Forex Market Trading Australia
Forex trading in Australia is a serious business and has seen rapid growth since 2007. Overseen by ASIC (Australian Securities and Investment Commission), it is an extremely well-regulated market with protection of client funds a priority. As technology has advanced, retail Forex trading has become increasingly popular with busy investors looking to trade on the go.
There are many Australian brokers that offer Forex trading services in the country, many with their headquarters in Melbourne and Sidney. In addition to this there are an extensive range of international brokers who offer their services to Australian residents. With so many licensed and regulated brokers to choose from this is good news for you, the trader.
More brokers mean greater choice however it is important to exercise caution when selecting the one that you want to trade with. We offer a comprehensive rating and recommendation of Australian brokers that arm you with all the facts you need to make an informed decision. When it comes to Forex trading, the broker can mean the difference between a good and a not so good experience.
What do you need to know about Forex trading in Australia? Here you will discover:
- How Australian brokers are licensed and regulated within AU borders
- Taxes and fees that apply to Forex trading inside Australia
- The process we use to rate and recommend brokers for you to use
Our Top Recommended Websites Updated: April 2018
Local Broker Benefits
Bonuses And Deals
In a crowded market, brokers have to set them self apart from the competition and try to obtain an edge. In order to do this, often they offer bonuses and incentives to encourage you to open an account. These tend to range from small no deposit bonuses, to larger deposit bonuses which are often a percentage of the amount you deposit.
Range of Currency Pairs
This can be a deal breaker for many. Obviously, some of you will trade in the more common currency pairs or the "main" ones as they are known. Then there are the "minor" pairs and "exotics", which many like to trade in for bigger spreads. While some brokers offer many different assets to trade on, others only offer a handful of pairs.
For those who want to get familiar with a platform before trading with real money, the demo account is ideal. A simulated version of the live platform, a demo platform offers the chance to trade with virtual funds. While it isn't the live trading arena, it does enable you to get to grips with the different buttons and functions before you risk your own money.
The payout is often the main priority for many of you when choosing a broker in Australia. It can range dramatically between brokers and in some cases, may look too good to be true. Be careful though, if it looks too good to be true, then it could well be. A good payout to expect is around the 80-85% mark, some brokers will offer higher payouts and some, lower.
Legal And Regulation
The Australian Forex market is heavily regulated to protect investors' money. While it has been regulated for some time, there was an amendment to the law in March which offers even greater protection. Whereas previously, brokers were allowed to use client funds to fund their business activity, this new regulation means that now client funds have to be protected.
In order to do this, brokers must segregate investors' money in a different account and are not allowed to touch this money. Of course, this has caused some inconvenience to some brokers who rely on these funds to often fund the running of their business.
The Forex market in Australia is overseen and regulated by ASICS (Australian Securities and Investment Commission). All brokers that operate in the country and offer their services to Australian residents must have an ASIC license. When choosing a broker, it is important to look for licensing and regulation and an ASIC licence is a good sign that a broker operates in the best interest of their clients, especially with the recent changes to protect your funds.
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Paying Taxes And Fees
Income earned from Forex trading is subject to income tax according to the tax laws of Australia. If you are earning enough to reach the tax threshold then you need to declare your earnings. If trading provides a second income then you need to ensure that you pay tax at the right level. If you reach the higher rate of earnings you may have to pay more tax on all or some of you profits. Remember that it is the overall profit when losses are deducted that you pay tax on.
When it comes to Forex trading fees then there are a few you need to be aware of. First there is the commission for a successful trade. This is deducted from your payout so you never actually miss this money. There are a few other small fees to be made aware of.
Some brokers will charge a set fee every time you make a withdrawal. In addition to this your credit, debit or other payment provider may make a transaction charge. Then there is the currency conversion which you need to be aware of. All of these fees are small but they can soon add up. We advise the following to keep them to a minimum:
When weighing up the broker that you choose it is important to take all of the fees into account. A good bonus may not be much of a bonus when you see the fees that they charge. Weigh up the pros and cons before you open an account.
How we Recommend Brokers
We are committed to making sure that your Forex trading experience is a good one. In order to do that we review the market so that we bring you only the best when it comes to Australian brokers. Whether they are a local broker based and operating in Australia, or an international company with a license to trade there, we take a thorough look at all of them.
When we review a broker, we are looking at every aspect of the trading experience. From the payouts and welcome bonuses, to the demo account and mobile trading platform, we investigate each one thoroughly.
Our team consists of experienced Forex traders and financial specialists who know what to expect from their trading experience. They review each broker, trading themselves to get hands on experience of each platform. They then put all of this information into a comprehensive review so that you have all of the facts to make an informed decision. This saves you invaluable time trawling through the internet looking at the many that are available to trade with.
This can be a painstaking process, especially when you aren't entirely sure what you are looking for. That is why having a list of shortlisted brokers from our experts, allows you to get on with choosing the one that best suits your requirements. All you need to do then is make a final selection and start your trading journey.
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Frequently Asked Questions
Is Forex trading in Australia legal and safe?
If anywhere is safe to trade then it is Australia. The Australian Securities and Investments Commission ensures that they keep a watchful eye over the market, scrutinising and regulating every broker that wants to offer their Forex trading to Australian residents. It is perfectly legal to trade and, if you choose an ASIC licensed broker, then your money will be safe. Be careful to check out that the licensing is genuine though if you have any doubts.
Do I need to pay taxes on my trading profits?
In Australia, Forex profits are subject to tax like any other income. The amount of tax that you pay will depend on the level of profits that you make. If it is a sole income or a hobby, then you may not have that much to declare. If it is a second or full-time income then you may meet the threshold of the higher level of tax. If you are unsure then it is important to get professional advice and help with your tax return.
Can I test brokers before trading with real money?
Many Forex brokers offer a demo account to new traders. This means that you can test the platform before you risk trading with your own funds. While some brokers may require a deposit to open an account, others will give you full access to a demo account with just an email address. Once you have the demo account you will be given virtual funds and a limited amount of time to trade them.
Is it easy to make deposits and withdrawals?
Making deposits is simple. You choose your payment method; credit card, debit card or electronic wallet and then make a deposit. The funds are available immediately (except in the case of wire transfer) and you can begin trading straight away. When you are ready to make a withdrawal, the funds are returned to the source from which they were deposited. It can take approximately three working days for the funds to reach your account.
Can I trade using my mobile or tablet device?
As long as the Forex broker offers a mobile trading platform, you can trade from a mobile device. You are looking for either an app or a mobile friendly website. An app should be available from the App Store or Google Play and be available for both phones and tablets. A mobile responsive website will recognise the device that you are on and deliver the right mobile trading experience allowing you to trade on the move.