Here we have covered the key factors to be considered by Australian beginners and experienced traders, that will help them stay ahead in the race.
Australian forex trading is progressively on the rise. It offers a glorious opportunity for anyone who is dedicated to making the best of his/her efforts and utilizing time effectively. Forex trading in Australia is as popular as it is in the USA and Europe, which are recognized as the more mature markets. While the forex market in Australia is already teeming with lots of forex brokers, their further increase will contribute to expanding the market growth.
In fact, the Australian market is still thriving, and there are lots of great reasons to get involved in it. As a beginner, when you fund your forex trading account, you start tapping the opportunity to trade your capital slowly but steadily over time. The least margin for trading is a handful of pips, and you will find a lot of brokers who will present you with several options for investment and trading yourselves.
By choosing Forex trading in Australia, you have very good odds of turning profits most of the time. Even if you incur losses in Forex trading, they will not be as huge as compared to other international markets, which is another additional reason to choose this market more avidly. Profits are often relatively higher than other markets offer, and more available opportunities are turning up day by day. You just have to look at the top stocks or benchmarks by volume or average daily volume (ADV), and you will earn maximum success in forex trading in Australia.
Understand the Australian Forex Market
The Forex Market in Australia is an exciting and lucrative market that encompasses the trading of foreign currencies. In its simplest form, it is simply allowing the buying and selling of one currency against another. The Australian dollar is a global currency with a high level of prominence (held by over 14% of countries total GDP). It’s also not rare to find online educational materials for beginners who are interested in trading foreign currencies. There are lots of great factors to be considered by Australians looking to get into this industry, so let’s take a look at what they’re available and explore why this market has such high demand.
Key Players and Regulatory Bodies
Australia has numerous regulatory bodies to govern Forex trading effectively. The names of the two most prominent regulatory bodies there include the Australian Securities and Investment Commission (ASIC) and the Reserve Bank of Australia (RBA). While ASIC assumes responsibility for managing and meeting licensing needs and ensuring that traders have the credentials they require, the RBA is responsible for setting monetary policy, and whatever actions they do impinge on the currency exchange rates in the country.
Trading Hours and Liquidity
When it comes to the Australian Forex trading hours, they are the same as are in other parts of the world, which is from 9 am to 5 pm (GMT) by default. This implies that Australian Forex traders have the opportunity to trade as much as possible and make the most of the fast market times. There are lots of websites that help organize time for Australian traders, including the Forex Trading Hours website. However, it is worth checking out the local time in your local area to witness if this changes at all.
The liquidity available in the forex market in Australia is a very different thing. Australia is a thriving export market for lots of countries, which implies that multiple currencies can be found here without any hassle. This is simply highly beneficial for traders who treasure the flexibility and efficiency of being able to trade with convenience and without holdups.
How to Get Started with Forex Trading in Australia
Many investors fear entering the forex market due to its volatile nature, but those who enter and start trading experience that it is really cost-effective if they know how to manage it the right way. So if you are a new kid on the block in Australian forex trading and wonder how to get started, then this section is really very valuable for you. We will show you what Forex trading is and what the steps are to get started in Forex from anywhere in Australia. These steps will alongside help you how to act like a pro forex trader.
Choose a Reliable Broker
This is one of the most salient factors to be considered. Avoid considering using friends having ‘some friends’ who trade. This will only cause you to incur loss largely because you will never appreciate you being left holding the proverbial baby when things go south. Getting started in forex trading is feasible from any location in Australia, but it will be considered an unlawful activity unless you are registered with ASIC (Australia’s regulatory body) as an Australian Financial Services (AFS) Licensee. This implies that forex brokers Australia must satisfy certain requirements, for example, working from an office in Australia and assuming responsibility for your funds. Although finding a dependable forex broker may consume a certain period, keeping patience is worthwhile here.
Set-up a Trading Account
The next important step to be taken is to create a trader account at a dependable broker. Brokers offering trading accounts in Australia include FXCM ( their desktop and mobile apps are available for download ), IG ( their desktop and mobile apps are available for download ), IG Australia, MT4Trader (the web platform is compatible with IE, Safari, Chrome, Firefox, and Opera only), Myfxbook (offering an Australian website but no dedicated app), PCM Tracker (for the use of MT4), SF Capita & Solutions Ltd, etc.
Understand Margin and Leverage
Margin is the percentage of your funds that you can place on margin. When you trade Forex with a broker, you are taking the opposite side of a market order, meaning you buy when the price falls and sell when the price rises. The difference between buying at a lower price and selling at a higher price is your margin. This also equates to how much leverage you are trading with: if your broker uses 100% leverage, then every lot that you trade will be worth 100% (of your equity). If they use 50% leverage, then every lot will be worth 50% (of your equity).
Role of Technical and Fundamental Analysis in Forex Trading
Technical and fundamental analysis are the two key tools Australian Forex traders utilize to reach a decision regarding trading strategies. Technical analysis refers to using past price info to discover the latest trends and styles in the market, while fundamental analysis considers macroeconomic factors, for example, economic growth, inflation, and interest rates. By amalgamating the two overtures, Australian Forex traders can acquire a better understanding of the market and make well-informed decisions in regard to their trading strategies.
In this section, we will talk about three key aspects of technical and fundamental analysis that play a seminal role for Australian Forex traders to understand.
Key indicators and tools for analysis: Forex trading is considered a speculative, high-reward activity, and most traders have a very brief outlook time. Putting it simply, traders trade short-term trend moves in general. Forex traders utilize a range of key indicators to analyze and understand the current state of the Forex market. Most of the time, Key indicators are the best way to understand what is happening in the Forex market. They will allow you to identify trends, changes, and patterns. Some of the key tools for analysis include correlation by market, news, the financial press, and market sentiment. These tools are instrumental in developing a trading strategy. A few of these indicators can help you understand when to trade, what to trade, and how to play the market.
Forex Trading styles and strategies: There are several trading styles that traders use to make decisions on what currency to buy and sell, which can be categorized as follows:
The momentum trading strategy is used when the trader wants to enter a position after a significant move in the market. This is usually used by traders that can identify key turning points in exchange. Their objective is to get into a position after the price has started moving in the right direction. The trend channel trading strategy is widely discussed among traders on forums and social media sites. Traders that use this strategy try to find an entry point above or below the trend channel because they are able to identify trends.
Risk management techniques: Risk management is a trading technique that traders use to manage risk. It is used by traders that want to manage their risk in line with their trading position. This includes risk management tools such as stop loss, break-even point, and target loss amount. This type of market information constitutes an integral part of day-to-day trading. Every trader with the earnest desire to make their trading a real success must know how the currency market works and how they can make long-term predictions on where the currency price is moving. By utilizing this information, traders can create their trading strategies and start gaining profits invariably.
Top 3 Strategies for Successful Forex Trading in Australia
Forex Trading has been around for a long time in Australia and considering the rapidly growing globalization, there is also a mountainous rise of individuals ready to take the risk to enter this highly cost-effective field. Certainly, as a forex wannabe aspiring to stay ahead of the game, you need to follow a few tried and true strategies that most successful Australian traders use. Here are the strategies:
1. Keeping up with market news and events: In order to ensure you achieve the best success, one of the key strategies you need to implement is to keep tabs on the forex market frequently. Although no one can predict what will happen in the market, doing so will also help you learn a lot about the market. Suffice it to say your chances to evolve as a successful forex trader will be maximum.
2. Utilizing trading tools and resources: Besides keeping tabs on the market, traders must arm them with the right tools and resources at hand. There is a huge availability of these free tools and resources that you can get access to and keep tabs on the market for any variations. Some of the most sought-after and popular free trading tools include trading platforms, free forex signals, economic calendars, etc.
3. Evaluating and adjusting trading strategies: The markets keep changing with time, and traders can easily find that they always have something new to learn. As already said above, by utilizing a range of free tools available online, you can easily stay ahead in the game. However, if you are on the fence about when to fine-tune your strategy, at this juncture, it is good to follow suit other traders utilize and how they can fine-tune their trading strategies too.
In general, one of the major keys to unleashing great success in trading is patience. This is because the market remains generally volatile, which implies that your odds of turning a profit right away are very low, but by keeping a little patience and practice, you will begin to make more money in your Australian Forex Trading sooner or later.
Overcome Common Challenges in Forex Trading
Forex is a complex market with many potential pitfalls for inexperienced traders or those unfamiliar with the risks involved. This article will provide many insights into the process of making money through Forex for Australians – from regulation to possible pitfalls – so that you can have a more enjoyable experience and make more money.
Here is how you can overcome Challenges in Forex Trading in Australia:
1. Dealing with market volatility: This is seemingly one of the most critical challenges traders face in forex trading. As ‘practice makes a man perfect, it takes time for traders to determine when is the best time for them to buy or sell currencies. Ensure that you adhere to your strategy always and keep tabs on the changes taking place in the market. Doing so will help you make the right decisions as well as cut down risk largely.
2. Managing emotions and discipline: Feeling emotional during trading is quite common for new traders. If you feel worried often and find it hard to focus on trading specifically, try doing your best to manage your emotions and remain disciplined as much as possible.
3. Overcoming losses and setbacks: In general, losses and setbacks is part of every trade. Therefore, as a sane trader, be sure you know how to manage these critical concerns. In case you incur a loss, do not panic; consider reviewing your strategies and search for new ones that can do wonders. If you are at sea, consider choosing one of the leading forex trading brokers in the market to help you effectively.
Conclusion
The industry of forex trading is extremely gainful and competitive. Therefore, anyone who has the fervent desire to enter the market and wants to stay ahead in the competition must first gain a basic understanding of how the market works and get the hang of it. Once you learn the nitty-gritty of forex trading, you will be able to do trading very well and stand out among a myriad of traders worldwide.
As a beginner trader, take your time to learn what to acquire and what to get around, as it takes time for beginners to gain a full understanding of trading. In general, most forex traders settle on the product of their choice for trading and subsequently customize their strategy around that product, whereas the level of freedom is beyond comparison when trading the currency pair. If a trader lacks the needful experience with forex trading, they should bypass choosing any one of the commodities, for example, gold, oil, or silver, because they will lack the know-how required to turn a profit from those products. Instead, consider choosing currency pairs, as you will want to make yourself familiar with products before moving forward.