Best Australian Forex Brokers
Australia has quietly become a top destination for international Forex / CFD brokers, while it remains popular among domestic Australian Forex traders. The Australian Securities and Investments Commission (ASIC) regulates all domestic Forex brokers. Founded in July 1998, it is one of the most capable and trusted regulators globally, second only to the UK Financial Conduct Authority (FCA). Therefore, Australian regulated Forex brokers have emerged as some of the most sought-after brokers, offering the most competitive and secure trading environment available today.
The Forex market remains the most liquid financial market globally, and thousands of new traders open accounts daily. Over 1,500 Forex / CFD brokers globally are catering to the growing demand, with new ones setting up shop every month. Following regulatory changes in the E.U., affecting former broker hotspot Cyprus, Australia took the top spot due to its business-friendly environment allowing Forex brokers to expand their business while offering traders security. ASIC established itself as a trustworthy and proactive regulator, giving traders a peace of mind when trading with any of the regulated brokers. All ASIC-regulated brokers operate under the protection of the Act of Grace mechanism under section 65 of the Public Governance, Performance, and Accountability Act 2013, while traders enjoy the protection under the Scheme for Compensation for Detriment caused by Defective Administration (CDDA Scheme).
Deposit $500 and trade with $1000!
30% Welcome Bonus
CySEC, FCA, FSC, CMA
Up To $5000
MiFID, Central Bank of Ireland, FSA, ASIC, BVI, FFAJ, FSCA, ADMG - FRSA
FCA, ASIC, DFSA
Is Forex Legal in Australia?
Forex trading is 100% legal in Australia. The Australian Securities and Investments Commission (ASIC) regulates FX trading in Australia. All domestic brokers must obtain an Australian Financial Services License (AFSL) license, while Aussie Forex traders may also trade with international brokers. The Corporations Act 2001 outlines rules and regulations for Australian financial firms, including Forex brokers in Australia, to remain compliant with the law. It is also paramount for Australian Forex traders to report profits to the Australian Taxation Office (ATO), regardless of whether their portfolios are in Australia or offshore.
Tips for Forex Trading in Australia
While many new Aussie Forex online enthusiasts focus on trading strategies and profits, compare Forex brokers, and try to find the Best Trading Platform Australia, they miss some of the most critical aspects for successful Forex trading. Below are a few tips for Forex trading in Australia to make sure that you have the proper non-broker trading conditions.
- Trading Space - You must have a distinct trading space, even if you trade from home, as all retail traders do. Ensure it is quiet so that you can focus on trading, which is one of the most challenging mental activities you will encounter.
- Avoid Distractions - Since Forex trading takes place online, there are countless distractions, primarily from social media. Avoid them when you trade. Learn to dedicate specific time slots per day for trading, and during those periods, invest your energy on nothing but trading. Otherwise, your results will reflect your distractions.
- Breaks - One of the most ignored aspects of this time-consuming profession, even for retail trades, is the necessity to take breaks. Starring at screens will place your brain on autopilot, and you will be prone to miss alerts and trading signals.
- Exercise and Diet - It may sound far-fetched, but exercise improves your mental strength, which you need when you trade Forex. A healthy diet adds to your overall well-being, can encourage you to exercise, and ultimately give you another edge.
- Analyze and Visualize - Always analyze your trades, profits, and losses. There is constant room for improvement, even if you only squeeze out a few pips per trade. They add up and will make a significant difference. Visualize your trading strategy, your upcoming trading day, and how you will aim to become a better Forex trader.
Understanding the Australian Forex Market
The Australian Forex market experienced a growth burst driven by regulatory changes enforced in the European Union in 2018. These changes rendered the E.U. uncompetitive, harming former safe-haven Cyprus. The transition is ongoing, but Australia is one benefactor of the slow exodus out of the EU by Forex brokers and traders alike. While Australia will soon receive competition from the U.K. following Brexit and a return to more market-friendly policies free of E.U. regulation, ASIC maintains a competitive environment for finance. Domestic trends show a continuous increase in demand, partially driven by the secure trading environment, low capital requirements, and high leverage.
FP Markets and Pepperstone remain two of the most trusted and recognized brokers globally, confirmation of the outstanding effort by the Australian regulator in promoting a platform for growth. Over the next decade, the Australian Forex market is forecast to capture a more substantial market share, with its close relationship and economic dependence on China, the largest Forex market globally, providing an invaluable catalyst. Forex trading Australia remains a high-growth sector to monitor, with exciting opportunities from its emerging FinTech industry transforming the market. The best Australian Forex brokers invest heavily in their technology infrastructure, providing a significant competitive edge to traders, eliminating slippage and requotes.
Australian Forex Market Regulation
Australian Forex market regulation remains the responsibility of the Australian Securities and Investments Commission (ASIC). It maintains one of the most competitive trading environments globally and is the sole Tier 1 regulator, where brokers offer a maximum leverage of 1:500 to all traders. Most regulators lowered it to 1:30 for retail traders, in an erroneous assumption that it would reduce trading losses. The absence of risk management is to blame for that, a concept which regulators tend to misunderstand. Therefore, ASIC-regulated brokers are well-positioned to take market share, particularly from E.U. counterparts, where CySEC-regulated entities operate with the distinct disadvantage of the European Securities and Markets Authority (ESMA).
While the size of the Australian Forex market is smaller than many of its counterparts, and the geographical location is distant from most regulatory jurisdictions, technology remains one of its most significant advantages. Australia adopts advancement swifter than other countries. Many Australian regulated Forex brokers deploy superior technology, FinTech advancements, and high-speed fiber-optic connections. Blockchain technology is also finding a home in Australia, which continues to attract global talent. The combination of all aspects drives domestic demand, while ASIC offers Australian brokers the right platform for international expansion.Back to top ⬆
Technology is one of the most significant advantages of Australian Forex brokers, closely followed by ASIC regulation. The primary role of ASIC is the regulation of the financial market and the protection of Australian consumers, investors, and creditors. All domestic brokers must obtain a license, and capital requirements must be maintained, together with the segregation of client funds from corporate ones. While ASIC continues to face criticism for inefficiencies to protect consumers from complex financial institutions, it has done an excellent job with Forex brokers.
How Does a Regulated Market Benefit You?
Trading with a regulated Forex broker in a regulated market protects traders from malpractice, pricing manipulation, and other fraudulent activities. It also ensures the segregation of deposits from corporate accounts and that the broker does not use them for internal trading activities or other financial transactions. In case of inappropriate behavior by a broker, ASIC has the capabilities to enforce the law, impose fines, and revoke licenses. While scams still exist, trading in Australia, or as an international trader with an Australia Forex broker, offers one of the most secure trading environments available.
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How to Verify Your Broker is ASIC Regulated?
Verification is a simple two-step process. First, locate the Australian Financial Services License (AFSL) license number, usually noted at the bottom of the homepage of each regulated Australian Forex broker. Next, compare the six-digit AFSL license number with the ASIC database to confirm you are dealing with a regulated entity.
Is There Tax on Forex Trading in Australia?
The Australian Tax Office (ATO) does not provide much clarity on the applicable tax, which differs on numerous criteria. An overly complicated tax code makes it challenging for any retail traders to understand the payable tax to the government, and it is best to consult a certified accountant. The primary distinction is between investors, buying and selling infrequently and not motivated by short-term profits, and traders, who aim to generate daily, weekly, and monthly income. There is a tax-free allowance, while the maximum applicable tax may reach as high as 45%. Crippling financial penalties exist for the wrong type of payment or absence of any. There are also tax discounts of up to 50% for investors, and traders can offset losses immediately while investors have to carry them forward. The complexity of the Australian tax code makes the use of a certified accountant the most efficient option. Software exists for those who prefer to attempt to navigate the unnecessarily complicated tax issue on their own.
Forex Trading in Melbourne
Melbourne is home to a well-diversified economy where finance, technology, and research play a dominant role. Five of the ten largest companies in Australia remain headquartered there, and Forex trading among Melburnians increases in popularity annually. The conditions for it, ranging from technology, through characteristics to interest, make Melbourne one of the hotspots for Australian Forex traders. Pepperstone operates out of Melbourne and deploys one of the most advanced technological infrastructures available today.Back to top ⬆
Forex Trading in Sydney
Sydney is the most populous city in Australia and Oceania. The location of the primary equity exchange ASX. Sydney ranks continuously among the Top 15 cities, highly integrated into the global economy. 48% of the Top 500 companies in Australia call Sydney their home, making it a perfect location for Forex traders. FP Markets, the operator of the Best Trading Platform Australia, has its global headquarters in Sydney, which offers the complete infrastructure for retail traders and professionals alike, comparable to what London or Tokyo has to offer.
Best Time to Trade Forex in Australia
This is a widely debated topic and ultimately depends on the trader and strategy. Many Australian Forex traders may prefer to trade during their daytime, making the Australian Dollar, the New Zealand Dollar, the Japanese Yen, and the Chinese Yuan the most desired currencies. The London open injects volatility and is considered by some as the most profitable time for short-term strategies. The New York start offers a smaller repetition of it. While debates over the best time to trade Forex in Australia are ongoing, on an individual basis, the best time is when a trader decides to execute their strategy, and not by what a consensus determines.Back to top ⬆
We reviewed over 100 brokers based on eleven criteria. Each research consists of over 2,000 words and lasted more than ten hours. Over 100 brokers were reviewed in-depth and from a traders’ perspective, ignoring the marketing tactics deployed by some to confuse retail traders. Therefore, we sourced the list of our Top Five Australian Forex Brokers from more than 200,000 words of dedicated research compiled over 1,000 hours, ensuring the most comprehensive approach to identify the best Australian Forex brokers.
The eleven criteria used in our research consist of:
- Regulation and Security
- Trading Costs
- Asset Selection
- Account Types
- Trading Platforms
- Unique Features
- Research and Education
- Customer Support
- Bonuses and Promotions
- Account Opening Process
- Deposits & Withdrawals
What is the best Forex broker in Australia?
Depending on the preferences of Forex traders, FP Markets, FXTM, AVA Trade, Pepperstone, and BlackBull Markets rank among the best Australian Forex brokers.
Is Forex trading legal in Australia?
Yes, Forex trading is 100% legal in Australia and is regulated by the Australian Securities and Investments Commission (ASIC).
What is the best Forex broker for Australian beginner traders?
FXTM offers an excellent educational division for Australian beginner traders to consider. Pepperstone and FXTM have $0 and $10 minimum deposit requirements, respectively, making them ideal for portfolio building and training purposes in live accounts.
How to become a Forex trader in Australia?
All you need to do is settle for one Forex broker, with the five outlined in this article an excellent starting point, make a deposit, and you are ready to trade. New traders need to invest a considerable amount in education and learning how to trade in a live account with a small deposit before making a more significant commitment.
Is Forex trading taxable in Australia?
Yes, Forex trading is taxable in Australia. Regrettably, the Australian Taxation Office (ATO) provides little clarity, the tax code is very complicated, and the assistance of a certified accountant remains the most efficient solution for complying with Australian taxation.Back to top ⬆