Over the past 6 years, the majority of traders I have met online have been in the U.K. However, some of the most profitable traders I’ve met have actually been from the other side of the world, in Australia. With some of the largest forex brokers coming from the country – it seems to be becoming a powerhouse in the industry. So, is forex trading legal in Australia?
Forex trading is legal in Australia. It is highly regulated by ASIC, which is actually very positive for retail forex traders as it protects you from shady brokers. The regulations aren’t oppressive so Australian forex traders have access to all currency pairs, leverage and some of the best trading conditions in the world.
Forex Trading In Australia – Is It Legal?
Forex trading in completely legal in Australia and some of the highest earning forex traders I have met are based in the country. The forex market in Australia is highly regulated by the Australian Securities and Investments Commission (ASIC), which is a good thing as it ensures that traders are protected from unscrupulous brokers.
The regulations in Australia mean that forex brokers based there will offer traders markets on all major currency pairs, leverage and some of the best trading conditions in the world. The legal status of forex trading in Australia is so strong, that the country actually hosted the 2012 Asia-Pacific Economic Cooperation summit.
The footprint Australia has made within the forex industry has been felt across the world and many traders in other countries like the U.K actually use Australian based brokers. This is due to the high leverage, great spreads and great reputation Aussie brokers like IC Markets have generated in the past 5 years.
The Australian forex game is regulated by ASIC but these regulations are not oppressive at all. While many traders in the U.S like to complain about their lack of leverage, traders in Australia can choose from 20:1 all the way up to 500:1 with some brokers. The legal status hasn’t stopped Australian brokers offering very high levels of leverage which is great for us traders.
The benefit of these regulations doesn’t stop there – you can future proof your trading ideas as you know that the market is already regulated in Australia, it’s unlikely anything will change.
Do Forex Traders In Australia Have To Pay Taxes?
We don’t give tax advise and if you’re a trader in Australia, I’d highly recommend seeking the advise of an accountant with knowledge of derivatives and investments. Regardless, what I will say is that traders in Australia do get taxed, fairly heavily.
Can Australian Forex Traders Use Any Broker?
The best forex brokers for Australians are those based in the country because of the regulations enforced by ASIC. The regulators have a strong presence within financial markets and provide protection to investors through code of conducts and licensing requirements for financial services providers. This makes it difficult for unlicensed brokers to operate within the market, which is great news for traders.
ASIC allow traders to use any broker worldwide, but of course it’s recommend to use a regulated forex broker. The only area ASIC really step into the mix is with credit card deposits. To avoid unhealthy debts from traders, the regulators will only allow a $1000 maximum deposit if using a credit card. Personally, I think this is an amazing idea!
I would personally recommend taking a look at IC Markets as they have a flawless reputation worldwide, whilst being AU based. However, there are a huge amount of Australian brokers worth taking a look at…
The Best Time For Australian Forex Traders To Trade
Although Australia is a big player in the international forex scene, the majority of the trading volume throughout the day is coming from London and New York. You can certainly trade the Sydney trading hours, but I’d recommend trading the evening session, if possible.
In the evening, (around 18:00 AEST), the London market will open and you’ll get the opportunity to trade on the major currency pairs with huge amounts of volume and liquidity.
If you’re looking to trade through the day, without the help of the London/New York volume, I’d recommend sticking with AUD based pairs like EURAUD and AUDUSD as these pairs will be the only pairs with any kind of meaningful trading volume and liquidity.
Are Traders From Australia Allowed To Trade All Currency Pairs?
Unlike in some countries, traders in Australia are allowed to trade all/any currency pairs. This is great for Australian traders as it not only provides you with more trading opportunities, but it also means that the forex market in Australia is more diverse than other countries. It’s also worth noting that brokers will offer all major currency pairs to traders, so there are no limitations at all.
Traders in Australia can also access some of the tightest spreads around. This is an amazing benefit that Australian traders get to enjoy and it means that you can trade more efficiently – leading to larger returns on your investments. Overall, there are no areas where forex trading in Australia becomes restrictive or non-beneficial for traders.
The Australian economy is very strong, with low-inflation and high interest rates. The Aussie dollar itself, has seen some impressive returns over the past few years which is great for Australians looking to trade internationally.
One of the most common forex pairs traded by Australian forex professionals is the EUR/AUD. This is due to the fact that it offers some of the tightest spreads and with Australia’s close ties to Europe, it makes sense for traders to trade this particular currency pair.
In Summary – Can You Trade Forex In Australia?
In conclusion, forex is legal in Australia and regulated by ASIC. There are a lot of brokers to choose from and all major currency pairs are available for trading, including some of the tightest spreads around. Overall, there is nothing restricting traders in Australia from trading forex and it’s a great time to get started as a trader.
Are you trading from Australia? Let me know in the comments…