Forex trading in Australia: market review and top online brokers

The domestic economy of Australia is a mixture of attractive openness and mature stability. These factors are leading towards more opportunities for business in general to develop, and for people to earn additional income, so many have started investing in the financial markets, including Forex trading.

In this review, we explain how to start Forex trading in Australia and what to pay attention to. It is always better to get backed up with fundamental knowledge about the market to understand which strategy works best to avoid potential losses. Especially considering that the Forex market is generally volatile and risky, too.

Review of the economy of Australia

Australia is a rather wealthy and doing-well country, yet relatively small and severely dependent on its agricultural and mining fortune. It combines a quite open domestic economy with a large network of free trade agreements all around the Asia-Pacific region. It benefits Australia’s vast natural resources and agricultural export industries.

However, it also leaves the country vulnerable to changes in world commodity demand and energy prices (especially coal and natural gas), metals (nickel and gold), and agricultural produce. Yet, these price fluctuations are what traders and investors can exploit to their benefit.

Traders and businesses mainly find Australia a very secure place to operate, due to its mature and relatively stable economy and political structure. Additionally, financial institutions with offices in Australia get oversight by reputable bodies of ASIC and ASX Compliance if involved with exchange-traded securities.

Popular online trading instruments in Australia

As one of the most attractive global markets, Australia is one of the regional primary markets for commodities, currencies, CFDs, and forms of equity. 

The wide range of instruments there gives traders the confidence they need to position themselves in a constantly changing market environment.

A list of the most popular trading instruments in Australia includes: 

Currency pairs trading in Australia

Alongside the most popular Forex pair of USD/EUR being available and in high demand, Australian domestic currency also made it to the top of the most traded currencies in the world. At certain times in history, AUD/USD was even the third most popular duo.

As was mentioned before, Australia is a large exporter of commodities such as natural gas, coal, iron ore, and agricultural products. International trade flows in these commodities lead to very strong liquidity in AUD/USD. It might also experience high levels of volatility, but this is something that traders with a good strategy can benefit from. 

Commodities trading in Australia

The economy of Australia is heavily dependent on its natural resources and other commodities. The country was lucky to get a wealth of natural resources in high demand, including oil, gold, nickel, agricultural products, diamonds, coal, etc.

XM Group is one of the world’s leading brokers, and it is very popular among traders from Australia. What does make XM Group so special? Locals are choosing it as their Forex broker for many reasons, including top-class regulations, very low spreads, negative balance protection, a wide range of assets (commodities, Forex pairs, stocks, indices, metals, and cryptocurrencies), good leverage, and a bonus of up to $5000 for the first deposit. These are valuable qualities you might want to find in your “ideal broker”.

CFDs trading in Australia

A Contract for Difference is a method of trading that allows traders to speculate on asset price movements. Traders can take either a long position (the asset price will go up) or a short position (the asset price will go down) when purchasing CFDs. When the contract time is up, the trader is paid the difference in the case of correct speculation or must pay the difference in the case of incorrect speculation.

In Australia, CFDs are a popular method of trading currencies, commodities, and stocks. 

Plus500 is one of the most well-known brokers when it comes to CFDs trading. Operating under the world’s most credible regulators (including ASIC, CySEC, and FCA), it is one of the most user-friendly trading platforms with advanced features and plenty of risk management tools. The broker offers a wide choice of CFD trade instruments, a trading guide, and all the tools to make trading more effective. 

Why is Forex trading so popular in Australia?

Altogether, this level of popularity among currency traders can be explained by a thing that economists call the 3 G’s concept – geography, geology, and government. 

Geology has given the country capital of natural resources that are in high demand, including oil, gold, agricultural products, diamonds, coal, etc. Thanks to its geography, Australia is a favorable trading partner for many fast-growing Asian economies with nearly insatiable resource demands. 

Government policy has led to rather stable high-interest rates, reliable government, and economic situation, a lack of intervention in the currency markets, a Western business style, and law authority that has not always been typical in the region.

Forex brokers in Australia are quickly garnering interest from retail traders from all over the world due to the nice trading conditions and reliable trading environment. Naturally, the business-friendly attitude of Australia has enabled brokers to move to Australia for setting up their brokerage. 

Another attractive point goes to cryptocurrency trading. Thanks to the blockchain, the biggest benefit of cryptocurrency is that digital currency can be sent anywhere in the world – all in real-time. Under Australian law, service providers can exchange one cryptocurrency for another. They can also exchange them for other currencies including traditional money.

AvaTrade is a versatile online trading broker with numerous advantages and features to discover.

In addition to the traditional trading instruments such as Forex, AvaTrade offers cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum, Ripple, Dash, Litecoin, Bitcoin Gold, and EOS.

While most brokers prefer to avoid cryptocurrencies and others normally offer Bitcoin and Ethereum, AvaTrade goes the extra mile and provides you with the entire range of these digital assets.

Trading Australian dollar: the special case

While Australia is only the 12th largest country in the world in terms of GDP and 55th largest in terms of population (2021), the Australian dollar is among the top five most frequently traded currencies in the world: AUD/USD pair comes 4th in general rating. 

Australia’s currency is also uncommonly cyclical and volatile as its worth is closely tied to its exposure to Asia and the commodity demand. Australia produces relatively little in terms of manufacturing and most of the country’s exports go to the growing economies of Asia. The demand in China, India, and to a lesser extent Japan, natural resources, has pushed the value of the Australian dollar up before, only to drop it later, when commodity demand weakens.

So while Australia enjoys a certain degree of independence from the other major world economies, its health is much more closely tied to the price of commodities and has created a great deal of volatility in the currency’s value. 

However, it is not a free-falling case. Each of the major trading currencies in the world is controlled (or at least strongly influenced) by the central bank of the issuing country. Australia is not an exception, and the Australian dollar is controlled by the Reserve Bank of Australia (RBA). Yet, The RBA is a rather conservative institution, and it has not made a habit of very frequent interventions in the currency market, so for traders, it may be fair market play. 

How to start Forex trading in Australia?

All you need is a basic understanding of how the Australian Forex market works, reliable brokers, and a good Internet. Sounds easy enough, but let’s break it down point by point. 

• Speedy Internet connection

From mobile phones to desktop computers, nowadays, it’s possible to trade Forex from almost any device with a stable internet connection. Before taking advantage of that, make sure to check your connection, since numbers and values in trading are changing in the blink of an eye.

• Market understanding and trading education

Most reputable brokers provide their users with trading guides, e-books, expert articles, and educational videos. And they are right to invest in it – the more you know about a market, the better you understand how it works, the more actively you trade, the more profit you make, and the longer stay with them. 

Plus500 provides its users with a trader guide and е-book, where you can find comprehensive explanations about the Forex market in general and a platform manual, all about the instruments it offers, and a step-by-step trading guide, as well as key trading terminology and up-to-date market insights. This book is available for free to every user, including those with Demo accounts. You can learn and test trading strategies without risking your capital.

Also, there is a collection of “how-to” videos available for you to learn more about online trading with Plus500’s intuitive platform, so once you get it all in, you’re definitely good to start.

• Trading strategy and chance to practice

Usually, trading strategies are built on your market knowledge and experience. And if we assume that the previous point got us covered with the educational base, then gaining some practical experience without losing tons of money on tryouts may be tricky.

However, there is one option you better pick as a trading newbie – a broker that provides a demo account! It is a great thing when you want to try out different strategies or trade different currencies without taking any risks.

NAGA  would be one of the best options if you’d like to do that and also looking for a broker that can provide you with advanced, but user-friendly trading tools and introduce you to the trading community at the same time. The broker also allows new users to open a demo account – a practical approach to learning the basics of trading.

Moreover, there is NAGA’s Autocopy – an innovative feature that lets you automatically copy leading traders on the platform, learn from their experience and get a chance to earn passive income.

NAGA offers a wide choice of trade instruments and educational bases to make trading more effective and secure. The last point is guaranteed by several reputable regulative bodies, those rules the broker has to follow.

Forex trading regulations in Australia

The ASIC (Australian Securities and Investments Committee) is the oldest regulatory authority in Australia, established in 1989. Ever since it has been taking care of financial bodies and their operations in a wide variety of ways that include securities and derivatives, financial services, investor protection, insurance, etc. 

The ASIC is the major regulator for all Forex brokers in Australia. It created a highly efficient and investor-oriented framework that prevents any company from exploiting its consumers through fraudulent means. According to ASIC official statements, all Forex brokers in Australia are required to follow a particular set of guidelines to ensure uniformity of trading conditions along with maintaining the integrity of the Australian financial markets. 

The ASIC has also obliged brokers to hold a minimum of $1 million in operating capital to ensure that brokers can withstand the volatility of the financial markets without compromising clients’ positions. 

Since Australia is becoming a more and more lucrative retail trading market, several Forex brokers are finding it attractive to set up their brokerage services in Australia. Although the ASIC is pretty stringent in its regulatory framework, Australia does provide various incentives and enormous benefits to companies for setting up their business there. Forex brokers in Australia get tax benefits, better operating conditions, and no restrictions on their investors.

 eToro is probably the most well-known broker around the world. It is approved by plenty of regulators, including ASIC, CySEC, and FCA, a leading social investing platform and home to over 20 million investors worldwide. Broker employs its status as one of the biggest market players in Europe and worldwide to guarantee your security and trading with no tricky hidden fees.

Also, it has a very cool CopyTrader feature, which is perfect for beginners, since you can follow professional traders and just mirror their moves. It will totally cover your experience gap and save you a lot of time if trading is not something you’d like to do round-the-clock.

Cryptocurrency trading in Australia

In Australia, cryptocurrency was legalized in 2017, making the country a fintech industry leader. However, together with this recognition, several sets of laws appeared as well. Even though these regulations might seem strict, they work well to ensure your trading safety. 

The first set of cryptocurrency laws in Australia is related to exchanges. These are not outlawed, but must register with the Australian Transaction Reports and Analysis Center, and follow obligatory procedures: to register as exchanges, to identify and verify their users, maintain their financial records, etc. 

Another point to be aware of relates specifically to Bitcoin regulation in Australia. It, along with any other cryptocurrencies that share the same characteristics, should be treated as property for tax purposes. This means that they’re subject to Capital Gains Tax, just as with any other property. 

If you’re wondering how to buy cryptocurrency in Australia, you should first find a licensed exchange to do so. With regulated service providers, you can rest assured that your purchase is protected as it would be with any other financial product. One broker for that is AvaTrade. 

While most brokers prefer to avoid cryptocurrencies and others normally offer Bitcoin and Ethereum, AvaTrade goes the extra mile and provides you with the entire range of these digital assets!

In addition to the opposite spectrum presented by such safe-haven assets like bonds and ETFs, cryptocurrencies offer an opportunity to diversify your portfolio with more volatile assets and higher risk-to-rewards potentials.

Best Forex Brokers in Australia

There are a huge number of Forex brokers from Australia that cater to traders and investors from all over the world. Being one of the highly regarded regulatory agencies, ASIC has built up its reputation among international trading audiences to create an image of a safe and secure trading environment, Forex trading is gaining more and more popularity and constantly attracting new traders. 

With all of that, the Australian market has the potential to offer immense opportunities. However, Forex trading can be challenging for beginners to master. But no worries! There is a great opportunity to start your way in the Forex market – Social Trading (also known as Copy Trading). By doing it, you can get passive income in the Forex market by automatically copying deals of professional traders.

Offering it and many other features, here comes the list of the best Forex brokers in Australia:

Plus500 in Australia

Plus500 is one of the most user-friendly CFD trading platforms with advanced features and plenty of risk management tools. It is controlled by ASIC, FCA, CySEC, MAS, and other global reputable global regulators and offers a wide choice of CFD instruments (even cryptocurrencies, under certain regulations), a trading guide, and all the mechanisms to make trading more effective and secure.

If you’re still new to CFDs trading & cautious about possible losses, Plus500 has an option for you too. You can make use of Plus500’s very detailed trading guide and open a demo account. It will give you a chance to practice, test your trading strategies & gain the necessary experience in real market conditions, being completely risk-free, as you can’t lose real money. 

XM Group in Australia

XM Group is a popular Forex broker in Australia that has been there for more than a decade. It is regulated by ASIC, CySEC, and the FCA and offers one of the broadest trading instrument choices with attractive trading conditions, numerous educational materials, and trade incentives. 

It is suitable for traders of all levels who want to have access to many market sectors and have their broker’s support as they go. And of course, we can’t forget the nicest part – XM Group offers multiple types of user levels accounts, three kinds of bonus programs, complementing them with free VPS and zero-fee deposits and withdrawals. Also, you’ll get a 100% automatic entry bonus of up to $5000 on your first deposit.

eToro in Australia

eToro is one of the most recognizable and credible brokers in the world, and Australia is not an exception for it. Regulated by ASIC and the UK’s Financial Conduct Authority (FCA), it is held in high regard for its truly trader-oriented features. 

The broker provides some of the most attractive market conditions: low Forex fees, only $50 deposit for opening a standard account, low trading and non-trading fees. So no matter if you’re an experienced trader or just a newbie, eToro is something you’d like to check out. You’ll probably like most of what you find out about this broker: CopyTrader feature, crypto items available for trading, and various trading platforms suitable for any situation possible. 

Overall, it’s a primary player in the world of online trading, and it offers a lot of tools and perks to make your trade as comfortable as potentially efficient. Therefore, whether you are a beginner, a seasoned trader, or just want to try CopyTrader – eToro may be an excellent broker to try.

AvaTrade in Australia

If you want to have access to more than 1250 assets, including Cryptocurrencies, 24/7 multilingual support all over the globe, then AvaTrade may be your choice. It is an international broker that is regulated by six international and regional financial authorities, including ASIC, FCA, and CySEC.

It is a versatile broker that offers a number of tools, from tech-advanced auto-trade terminals to financial risk-management initiatives. If you want to have safety combined with a wide choice of trading instruments and platforms, it might be a suitable option. 

NAGA Markets in Australia

NAGA Markets is one of the top-rated brokers and one of the leading social investing platforms. By registering, you benefit from over 950 markets, including ETFs, Forex, commodities, crypto CFDs, a wide range of professional tools, and educational materials for traders of any level.

Together with more than a million users, you can trade and invest, learn from them, copy the best traders or become a trading pro yourself! As one, you’ll get a chance to earn extra income, largely reduced commission, and a group of friends to discuss trading with. Or as a trading newbie, you can highly benefit from copying the most successful traders in real-time with a special NAGA auto-copy feature.

If you’d like to diversify your portfolio and value all features, mentioned above, equally, then it’s a good thing that actually you don’t have to pick just one broker. Be sure to take full advantage of available demo accounts to test all your strategies, and benefit from some of the most attractive bonus systems. At times, having two different accounts can provide a better perspective on the market such as the volumes, pricing, spreads, and other vital factors that are important in the highly volatile Forex markets.

By registering and confirming an account with several of the TOP brokers in Australia, you can not only compare trading platforms to find the most fitting one but also maximize the benefits provided by different brokers. It will allow you to conduct more tests of various trading strategies and set the way to become a real pro-trader.