With the forex market gaining traction from traders and investors globally, Australia has been able to position itself as a forerunner in the forex industry. For this reason, all brokers have become subject to high standards set by ASIC – Australia’s corporate regulator that regulates forex brokerages operating within the country.
As a result, trading forex with Australian forex brokers is indeed a safe option and their services have been found satisfactory by many traders in terms of features such as regulation, and safety.
We’ve done in-depth research among many brokers operating in Australia to help make your investment decision.
Best Online Brokers in Australia
Here is our list of the best Australian brokers:
Pepperstone: Best ASIC-regulated broker in Australia (ASIC)
Disclaimer: Although not regulated by ASIC, several of the forex brokers listed on this page like ActivTrades have established stellar reputations with one of the top-tier global regulatory bodies: FCA (United Kingdom) – so you can rest assured your investments are safe!
ActivTrades has reached the top with our team of experts because they have been an industry leader in broker services since 2001, offering traders a wide range of financial instruments at unbeatable terms and conditions. Outstanding customer service has earned them multiple awards as well as regulatory approval – ensuring tight spreads, minimal fees and ultra-fast execution for the ultimate trading experience.
Pepperstone is renowned as a top-tier forex and CFD broker, regulated by some of the most influential financial authorities in Europe, Australia and beyond.
With their cutting-edge technology, competitive spreads, devoted customer service team, and intuitive interface – they have cultivated an enticing environment for those eager to start trading in financial markets and are sure not to disappoint any potential investors.
With a wealth of experience and expertise spanning over 13 years, FPmarkets has evolved into one of the leading CFD & Forex brokers in Australia. Offering more than 10,000 financial instruments including currencies, shares, commodities, indices, ETFs as well as coveted cryptocurrencies – they have solidified their presence at the very top with their intimate partnership with renowned liquidity providers across global currency markets whilst offering world-class services to clients worldwide.
*The leverage rate is depending on the regulation you are trading.
How to trade Forex in Australia?
When you land in a new country and exchange your dollars for the local currency, you practically trade Forex. However, as you would have figured out by now, that is not a very practical way to trade in the market with large quantities of funds.
The good news is that as trading foreign exchange became very popular over the last decade, it has encouraged a large number of online brokers to offer a low-cost solution to trading currencies over the Internet.
In order to access the global foreign exchange market and start trading Forex, the first thing you need to do is open a brokerage account with a Forex broker, who will provide you with the software and connect you to global banks, dealers, and other liquidity providers.
As there are literally thousands of Forex brokers offering their service, it is a rather difficult and time-consuming task to pick the right broker. In order to make it easier for our readers, we have spent significant time researching the best Forex brokers for Australian traders. You can take a look at our shortlist of top Forex brokers in the top section and pick the right broker.
How to open a forex trading account in Australia?
Step # 1: Open a Live Trading Account
Opening a Live account is easy and you would only need to provide your personal details, such as verifying your address and identity in order to open an account.
Once you select a broker and open a live account, the broker will provide you with an account number and login details to access your brokerage account.
Step # 2: Access Your Brokerage Account
Most modern Forex brokers offer web-based trading platforms. But, professional traders often prefer to install the trading platform (MetaTrader) on their computer for ease of access and reliability.
Depending on the type of trading platform offered by your Forex broker, you would have to enter your personal account number and password to log in to your account, either via a web browser or with the provided software.
Step # 3: Learn How to Place and Modify Orders
Most Forex brokers offer knowledge banks that provide details regarding how to operate their trading platform. But, you will find that across all the major trading platforms, trading is done with some basic features and it takes a few minutes to understand the commands.
For example, on the most popular trading platform, MetaTrader 4, you can either place a market order or a pending order with your Forex broker.
With market orders, the broker fills your order with the market price. With pending orders, you can place a “standing order” with your broker to fill your order either at a higher or lower price compared to the current market price. These two types of orders are known as a STOP order and a LIMIT order, respectively.
If you place a buy order and the price goes up, you would make a profit. By contrast, if you place a sell order and the price goes down, you would also make a profit. You can also set a STOP LOSS order to minimize the risks and a TAKE PROFIT order to get out of the market with a profit automatically.
Moreover, all Forex brokers will allow you to modify these “standing orders” at any time during the official trading hours.
We recommend that you open a “demo account” with your Forex broker and play around with the trading platform and familiarize yourself with the trading platform before placing any Live orders
Is forex trading legal in Australia?
Yes, forex trading is totally legal in Australia. All brokers operating in Australia need to get an ASIC license to become a regulated firm.
Unlike many Forex brokers who are registered in small island nations, where regulatory oversight is limited at best, as a Western democracy, the Australian government regulatory authority – the ASIC – provides a safe and legal trading environment for both local and international retail Forex participants.
The high growth momentum in the Forex industry has promoted some of the top forex brokers to start offering cutting edges trading features such as Straight Through Processing (STP) and True ECN. Currently, Australia is home to some of the largest True ECN Forex brokers in the world. In fact, ECN trading even attracted some of the largest institutional traders and money managers to start using Australia-based brokers.
Forex Trading Market in Australia
Since the global financial crisis in 2008-2009, investors have come to distrust investing in equities and turned their attention to playing the “global macro” in terms of currency trading. That fueled the growth of Forex trading around the world, including Australia.
Over the last decade, the Australian financial industry has gone through a remarkable transformation and now it is home to a number of world-class Forex brokers who are serving millions of traders from around the world. According to the Sydney Morning Herald, Forex trading is a $380 billion industry that has been doubling in size since 2007.
In the last few years, the U.S. Securities and Exchange Commission (SEC) in the United States, under the Dodd-Frank Wall Street Reform and Consumer Protection Act, has imposed some trading restrictions. For example, US-based Forex brokers can only offer up to 50:1 leverage to retail traders. Also, the strict rules for opening a trading account with US-based brokers prompted some of the major brokers to shift their operations offshore.
As the Australian government was providing a highly regulated market that promotes a rather liberal trading environment compared to the United States, a lot of international Forex brokers choose to base their businesses here. In contrast to US brokers, some of the well-regulated Australian Forex brokers are offering up to 500:1 leverage! This has further fueled the growth of the Forex industry in Australia.
The Australian Securities and Investments Commission (ASIC) has played a critical role in both liberalizing the FX trading industry and maintaining a high standard in Australia. In order to start a Forex brokerage business in Australia, a company must obtain an Australian Financial Services License (AFSL).
In order to obtain the AFSL, the brokerage company must demonstrate and meet certain strict criteria. For example, they must demonstrate the technical capability to carry out financial services to general investors as well as prove sufficient financial resources.
Besides that, an Australian-regulated Forex broker also has to meet other obligations, including provisions for training the staff, meet regulatory compliance, have standard procedures for dispute resolution, and having adequate insurance to safeguard client funds.
Why Choose an ASIC Forex Broker
The Australian forex brokers are abreast of the latest rules and regulations set by ASIC. They conduct smooth market operations without any loopholes. These brokers are considered equal with Australian regulatory bodies like NFA and FCA. A few benefits of choosing them include:
Keep Funds in Separate Accounts: Brokers affiliated with ASIC provide funds security. The regulatory body ensures that brokers deposit funds in separate accounts of leading Australian banks.
Provide Transparency: The ASIC-registered brokers need to present transparent operations. They must not indulge in compromised financial activities and remain systematic.
Detailed Audits: Independent Australian auditing agencies carry out complete auditing of the licensed brokers. It is to ensure that they comply with prevailing rules.
No Limit Trading: One of the excellent benefits for traders as some are involved in the high-risk market. No more limit regulations on the ‘maximum leverage’ amount by ASIC.
Submit Transactions Reports: These brokers submit detailed and transparent reports on each completed transaction or service. For maximum protection, ASIC monitors daily operations.
Getting brokerage services from brokers regulated by ASIC infuses a high level of trust among customers. Investors get updated information on the latest trading activities. If any unlawful activity is noticed, ASIC takes quick action. These strategic activities instil reliability and trustworthiness in forex brokers licensed by ASIC.
ASIC Forex Brokers: An insider’s view
Wondering, why an ASIC-certified broker is? They guarantee the security of the financial transactions of the customers. Moreover, brokers holding a license from the ASIC ensure overall market fairness. They help beginners as well as experienced traders.
But, why opt for ASIC-regulated brokers? Let us dig in to know more details.
ASIC: Who are they and What do they do?
ASIC is an Australian regulatory body renamed in the year 1998 from the previous “Australian Securities Commission.” ASIC overlooks the functioning of the financial and trading sector. It oversees industries like:
Corporate governance industry
Financial and Securities investment companies
The role of ASIC is stated as under:
Responsible for maintaining, facilitating, and improving the financial system’s performances
Promotes customer confidence in the trading system with ASIC-regulated firms.
Defines rules for the financial market and guarantees its reliability
It can ban traders from engaging in credit activities.
Focuses on effective enforcement of the laws
Indulged in the receiving, processing, and storage of the financial details
Provision of practicable information on trading bodies and companies to the public
Presents market reports to the Australian treasurer
Honesty and good traits make ASIC forex brokers the first choice for traders. They stand in the league of best brokers in Australia. So, let’s see why you must choose one of them.
We have chosen the best forex brokers to compare after researching many online brokers and comparing their features. We analyzed all those brokers according to the following ranking criteria:
John Stuart is the editor’s chief of BrokerTrending and our expert broker. He has been in the online trading business for over 12 years, and he knows everything there is to know about the stock and forex market. When he’s not giving advice to the top investors, John can be found spending time with his wife and two children.
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