10 Best Australian Forex Brokers 2023

The Australian forex market is a very vibrant market with many reputable brokers due to its strict regulation and high level of liquidity. In this article, we will talk about the best Australian forex brokers and explain some key things that you may want to know about trading foreign exchange in Australia.

Top 10 Best Australian Forex Brokers

This list of the top 10 best forex brokers in Australia is based on regulation, trading conditions, platforms and products.

Pepperstone: Best for low spreads, multiple options of platform, ultra-fast execution speed, low deposit requirement and high leverage.

IC Markets: Best for low spreads and deposit requirement as well as high leverage.

eToro: Best for fast execution speed and zero commission.

Saxo Bank: Best for super-fast execution speed and wide range of currency pairs.

CMC Markets: Best for low deposit requirement and wide range of currency pairs.

FP Markets: Best for multiple options of platform and high leverage.

FXCM: Best for low spreads and high leverage.

AvaTrade: Best for low costs and deposit requirement.

IG: Best for being widely regulated.

Plus500: Best for low costs and being highly regulated. (Please note that the mentioned instruments are available for trading via CFDs. )

Comparison of the Best Australian Forex Brokers

Is Forex Trading Legal in Australia?

Forex trading is completely legal in Australia, and is regulated by the Australian Securities and Investments Commission (ASIC), which means that all forex brokers operating in Australia must be licensed by ASIC and comply with its strict regulations. This helps protect traders in the Australian forex market from fraud and ensures that they are treated fairly.

In fact, Australia is one of the top forex trading nations in the world. The Australian dollar is closely correlated with the global economy, and so is sensitive to changes in economic conditions, which makes it a popular choice for forex traders. Also, Australians are generally open to new investment opportunities, and they are willing to take on some risk. This makes them a good fit for forex trading.

How to Trade Forex in Australia?

As with any other markets in the world, there are generally 3 steps to follow to trade forex in Australia.

- Step one: select a reputable broker that suits your needs

It is significantly important to choose a broker that is regulated by ASIC. ASIC-regulated forex brokers must have a minimum capital of AUD 1 million to protect client funds in the event of the broker's insolvency, and must keep client funds in segregated accounts, which ensures that client funds cannot be used by the broker for its own purposes. Besides, ASIC requires its regulated brokers to provide negative balance protection, so that clients cannot lose more money than they have deposited with a broker.

In addition to making sure that the broker is regulated by ASIC, you also need to check the broker's track record, looking for a broker that has a good track record and has been in business for several years. There are many websites where you can read reviews of forex brokers. This can be a helpful way to get an idea of what other traders think of the broker.

Furthermore, different brokers charge different fees and commissions, so it is important to compare them before you make a decision. And don’t forget to consider the broker's trading platform that is user-friendly and meets your needs.

- Step two: open and fund your trading account

Once you have chosen a broker, you will need to open a trading account and fund your account with money. The amount of money you need to deposit will depend on the broker and the trading strategy you are using.

- Step three: start trading

After funding your account, you can start trading currencies pairs like AUD/USD, EUR/USD, and GBP/USD. And it’s important to set stop-losses and take-profits to manage your risk, and learn from mistakes and improve your trading skills over time.          

When Is the Best Time for Trading Forex in Australia?

The forex market, being a global marketplace, operates 24 hours a day, five days a week. Regarding the problem when the best time to trade forex in Australia is, we need to take into consideration factors like liquidity, volatility, and market overlaps.

- Major forex market trading sessions

The forex market has four major trading sessions: the Sydney session, the Tokyo session, the London session, and the New York session. Each session has its unique characteristics, and certain times of the day offer more favorable trading conditions.

The Sydney session (Asian Session) starts at 10:00 PM GMT and ends at 7:00 AM GMT, overlapping with the Tokyo session for a few hours. For Australian traders, this corresponds to the early morning hours. During this session, liquidity is generally lower compared to other sessions, but it can still present trading opportunities, especially during news releases related to the Australian dollar.

The Tokyo session begins at 12:00 AM GMT and ends at 9:00 AM GMT. This session is known for its liquidity, as it coincides with the opening of major financial centers in Asia, including Japan and Singapore. Volatility can be higher during this session, particularly when important economic data is released, making it an attractive time for traders seeking short-term opportunities.

The London session starts at 8:00 AM GMT and ends at 5:00 PM GMT. This session overlaps with both the Sydney and Tokyo sessions for a few hours, creating increased trading volume and liquidity. The London session is widely regarded as the most active and volatile session, as it coincides with the start of the European trading day. Many major currency pairs, such as EUR/USD, GBP/USD, and USD/CHF, experience significant price movements during this time.

The New York session begins at 1:00 PM GMT and ends at 10:00 PM GMT. This session overlaps with the latter part of the London session, resulting in increased trading activity. The New York session is known for its high liquidity, especially when economic data from the United States is released. As a result, currency pairs involving the US dollar, such as USD/JPY and USD/CAD, tend to exhibit heightened volatility during this session.

- The best time for forex trading in Australia

So, when is the best time for forex trading in Australia? The answer largely depends on your trading style, preferences, and the currency pairs you focus on. However, many traders find that the optimal time for trading in Australia is during the overlap of the Asian and European sessions, which typically occurs in the early morning hours. This time frame offers increased liquidity, as it combines the active trading hours of major financial centers in Asia and Europe. Furthermore, it's important to consider economic events and news releases that can impact currency markets. Monitoring the economic calendar for scheduled releases, such as interest rate decisions, employment data, and GDP reports, can provide valuable insights into potential market movements.

In conclusion, while the forex market operates 24/5, the best time for trading forex in Australia is often during the overlap of the Asian and European sessions. However, it's crucial to align your trading strategy with your personal goals and availability. Remember to stay informed about economic events and adapt your trading approach accordingly.

What Are the Forex Trading Strategies for the Australian Market?

The forex market offers a multitude of opportunities for traders in Australia. With its high liquidity, round-the-clock trading, and diverse range of currency pairs, it's important for Australian traders to have effective trading strategies in place. Here are some of the best forex trading strategies specifically tailored for the Australian market.

Trend Following Strategy: This strategy focuses on identifying and trading in the direction of established trends. In the Australian market, it can be particularly effective given the prevalence of trending currency pairs. Traders can use technical indicators like moving averages, trendlines, or the Average Directional Index (ADX) to identify trends and enter trades accordingly. It's essential to combine trend analysis with proper risk management techniques to maximize potential profits.

News Trading Strategy: News events, such as economic data releases and central bank announcements, can have a significant impact on currency markets. The news trading strategy involves monitoring economic calendars and entering trades based on the anticipated market reaction to news events. Australian traders can focus on economic data releases from their own country, such as employment reports or interest rate decisions, as well as key global events that impact major currency pairs.

Range Trading Strategy: This strategy is suitable for markets that exhibit sideways movement or consolidation. In the Australian forex market, currency pairs often enter periods of consolidation, creating opportunities for range traders. The range trading strategy involves identifying support and resistance levels and executing trades near these boundaries. Traders can use oscillators, like the Relative Strength Index (RSI), to determine overbought or oversold conditions within a range.

Breakout Strategy: Breakout trading involves entering trades when a currency pair breaks through a significant support or resistance level, indicating a potential trend continuation or reversal. In the Australian market, breakouts can occur during major economic news releases or when currency pairs consolidate before a significant price move. Traders can use technical tools, such as Bollinger Bands or Fibonacci retracement levels, to identify potential breakout points.

Carry Trade Strategy: The carry trade strategy involves taking advantage of interest rate differentials between currency pairs. In the Australian market, where the Reserve Bank of Australia's interest rates can differ from those of other major central banks, carry trades can be attractive. Traders can seek to profit from the interest rate differential while also considering potential currency appreciation or depreciation.

The Australian forex market presents numerous opportunities for traders. Whether you prefer trend following, news trading, range trading, breakout trading, or carry trades, understanding and implementing the right strategies is crucial. Experiment with different approaches, adapt to changing market conditions, and continuously educate yourself to stay ahead in this dynamic market.

What is the leverage for forex trading in Australia?

Leverage is a double-edged sword. It can magnify both your profits and losses. In Australia, The maximum leverage for retail forex trading is 30:1. The amount of leverage you can use when trading forex depends on the broker you use. Some brokers offer high levels of leverage, while others offer lower levels. It is important to choose a broker that offers the level of leverage that you are comfortable with.

How does Forex Trading Pay Tax in Australia?

According to the guidelines set by the Australian Taxation Office (ATO), the profits generated by forex trading as an investment activity will typically be treated as capital gains. In Australia, capital gains tax (CGT) applies when you dispose of an asset, which includes selling or trading currency pairs. CGT is only applicable when the total capital gains exceed the CGT threshold (currently set at AUD 10,000). The amount of CGT you pay will depend on your marginal tax rate and the length of time you hold the asset.

If you hold an asset for less than 12 months, you will pay short-term capital gains tax (STCG). The STCG rate is the same as your marginal tax rate. For example, if your marginal tax rate is 32.5%, you will pay 32.5% CGT on any profits you make from short-term forex trading. If you hold an asset for more than 12 months, you will pay long-term capital gains tax (LTCG). The LTCG rate is 15%.

There is a 50% discount on CGT for assets that you have held for more than 12 months and that are classified as "active investments". To qualify for the active investment discount, you must be actively involved in the management of the investment, and the investment must be a significant part of your income.