Forex trading has successfully thrived in Australia, thanks to the liberal, yet wary, stance of the government on foreign exchange brokers and trading providers. Forex platforms have been popular in Australia for some time, but their real boom happened around 2015, when local media started picking up trader stories after the Swiss franc went up by a larger margin.

Thanks to the deregulation processes which aimed to simplify the Australian financial system, Forex trading platforms are regulated to the extent of ensuring customer protection and safety, but not severely restricted in any way. There are also no existing legislations that will prevent you or penalize you for trading Forex positions with Australian brokers, or even ones that apply to off-shore platforms.

The only legal restrictions set by the ASIC, Australia’s Forex regulatory body, are imposed on the trading platforms and they limit credit card deposits to $1,000 when you open an account. Other than that, there are no leverage restrictions imposed, for now, or other legal obligations, apart from tax obligations.

List of Forex Brokers accepting traders from Australia:

Broker Offer Trade Now
1st

Deposit: $5
Leverage: 888:1

Trade Now!
2nd

Deposit: $100
Leverage: 1:294

Trade Now!
3rd

Deposit: $50
Leverage: 1:1000

Trade Now!
4th

Deposit: $50
Leverage: 400:1

Trade Now!
5th

Deposit: $100
Leverage: 200:1

Trade Now!
6th

Deposit: $250
Leverage: 400:1

Trade Now!

However, just because you are given a “free pass” by regulators, so to speak, you should still be cautious when choosing where to invest your money. Joining a trading platform that’s licensed by the local government means that you’ll also have local support if any problems arise. Even if off-shore Forex trading platforms offer better terms, you still want to make sure they’re regulated by trustworthy authorities.

Frequently Asked Questions

If you’re living in Australia and are thinking on joining an online Forex trading platform, take some time to look at the frequently asked questions below for some help with the different aspects of Forex trading. These range from the legal and tax obligations you must comply with as an Australian citizen to the most common concerns related to the trading process itself.

  1. What is Margin and Leverage trading?

    One of the primary ways that Forex traders make money online is by taking leverage. Just like the word implies, leverage is when you take up a loan from the brokerage to invest in a trade. For example, if you are offered a 50:1 leverage, when you invest $1,000 you can get a $50,000 worth of money to spend on your position. For this purpose, you would have to first open a margin account with the forex platform.

  2. What Forex Leverage Limits are available in Australia?

    The ASIC Act of 2001 doesn’t give the regulatory body power to enforce a leverage restriction to Forex brokers, so there is no official limit like in the USA. However, most Forex trading platforms have a leverage of up to 500:1. Leverage is also awarded per the account history and positions you want to trade, so don’t expect it to be high if you’re new to the trading platform.

  3. What is the best currency pair to trade?

    There is no right answer to this question. The most popular currency pairs are the ones that include stronger currencies like the USD, EUR, or GBP. Thus, the most highly traded pairs are EUR/USD, GBP/USD, JPY/USD, AUD/USD, etc.

  4. Why is AUD a Popular Forex Trading Currency?

    Just like every other currency, the main appeal of the Australian dollar lies in its volatility, but also coverage. Unlike with more exotic currencies, resources on the Australian economy and the export of commodities, which have a significant role in its value, can be more easily found. This, combined with the price swings against other currencies, is exactly what makes it a solid target for Forex traders.

  5. Do you have to pay tax on Forex trading?

    Since 2003 onwards, any money you make with Forex trading online is applicable for taxation just like any other profits you turn with your business or other investments. Also, the sign-up procedure would have you submit banking and personal information, which means that your account activity will be logged by the brokerage, so you should definitely not risk avoiding to file your taxes.

  6. How is Forex taxed in Australia?

    The provision you need to watch out for can be found in the Income Tax Assessment Act under Division 755 and sub-divisions 960 C & D. Per the stipulations, you would have to report any gains as assessable income and any loses as deductibles. However, they are only recognized when realized.

    The law also doesn’t differentiate between unconverted gains or losses and there are several exemptions under which the gains will not be considered assessable or the losses deductible, like when they are incurred in an earning exempt income. However, if you’re not sure what applies to your situation, it’s better to consult a tax professional.

  7. Are there any Forex Trading Bonuses?

    Some, but not all Forex brokerages, will offer a sign-up bonus as an incentive to motivate you into joining. These are mostly in the form of trading credit, like 10% of your deposit, for example, or even points that can increase your status at the brokerage and give you different perks. However, when accepting any bonus offers, make sure you understand what terms are you getting them with.

  8. What is the Minimal Legal Age to Trade Forex in Australia?

    There is no minimal legal age to engage in Forex trading as there is with gambling or drinking. However, the fact is that there doesn’t have to be one. Per Australian Law, you cannot open a bank account if you’re under age without a parent consent and you will need one to fund your Forex trading account. Thus, if you’re under 18, you won’t be able to do anything other than practice trading.

  9. What is the Best Forex trading Platform?

    It all depends on personal preference. Experienced traders will have little problems getting around any platform, but rookies can easily get overwhelmed withing a more complex environment. The most commonly used trading platforms are CTrader and MetaTrader 4 and 5, but you’ll find other options as well. There are also mobile platforms designed for iOS and Android devices at most brokerages, while Windows Phone options are less common.

  10. Can You Make Money Day Trading?

    Day Trading involves trading your position within or under a single day. With day trading, you aren’t holding any position for days or weeks, thus making your job more demanding but also less lucrative. However, if you do it regularly it can be turned into a source of income, as long as you know what you’re doing. According to available numbers, some traders have earned $100k per year, or even more, but this is unlikely for the novice trader.

Australian Forex Regulatory Authority

Forex trading is regulated by the ASIC (Australian Securities and Investment Commission), which is the second financial regulatory pillar in the country, apart from the APRA (Australian Prudential Regulatory Authority). The Commission’s main objective is ensuring the protection of any consumers, creditors, or investors, which also include Forex trading platforms.

Thus, Australian Forex platforms must hold a license from the ASIC to be able to provide services within the country. The license serves as insurance to any user that the services provided comply with ASIC’s standards, the most important of which are financial insurance and dispute resolution policies. The regulatory body also has a Professional Register, where you can find a list of brokerage that hold ASIC’s licenses.

However, a regulatory license isn’t endorsement, so don’t expect to stay protected from losses or not to be held liable for them. No, what ASIC can do is help you whenever you have a dispute, but any risk taking will be entirely your responsibility.

Other Forex Trading Regulatory Bodies

If you want to expand your options and try something different that your local brokerages, you can also turn to other Forex trading platforms licensed by off-shore licensing authorities. The following are only some of the more important ant trustworthy agencies that oversee foreign exchange trading:

FCAUK’s Financial Conduct Authority is an independent UK body that’s financed by membership fees from the financial companies. They are known as one of the strictest regulatory bodies in charge of monitoring consumer services in UK’s financial industry.

CySec – Another important name in the online Forex Industry, the Cyprus Securities and Exchange Commission is a regulatory agency based in Cyprus. Thus, CySec license holders by default comply with EU’s 2004 MiFid Act provisions. Most foreign exchange brokers hold a license from the CySec alone or in combination with licenses from other regulatory bodies.

CFTC and NFA – Just like in Australia, USA Forex platforms are overseen by independent regulatory bodies, the most important, in this case, being the Commodity Futures Trading Commission and the National Futures Association.