Best FOREX Broker in Australia for 2024

Best FOREX Brokers in Australia in 2024

Top Tips for Selecting the Best FOREX Brokers in Australia

The 7 Best FOREX Brokers and Trading Platforms In Australia

With so many choices out there, it's tough to select the right broker. In this case, we've done the work for you. Here is a summary of each broker according to specific criteria, along with their pros and cons

1. ICM - Capital 91.10: Best Deposit and Withdrawal Broker

2. Tradeview - 90.00: Trusted broker that offers very low trading costs as well as comprehensive financial literacy materials for its clients.

3. XTB - 85.55: Best Customer Service Broker

4. IG - 85.45: Best Regulations Broker plus Convenient Platform

5. Saxo Bank - 80.09: Excellent Private Trading Platform

6. CMC Markets - 80.07: More than 9,000 Assets

7. ThinkMarkets - 80.05: Aimed at the Audience of Traders

What is FOREX and Why Do We Need a Broker to Trade?

The global FOREX market is a decentralized marketplace where worldwide currencies are traded. This trade does not take place in a physical place but is conducted electronically over the counter (OTC). This means that all transactions occur via computer networks between traders all over the world rather than on one centralized exchange. The FOREX market operates 24 hours a day and five days a week (Monday to Friday), except for international holidays. The FOREX market is the largest financial market in the world with some six trillion dollars changing hands daily. FOREX brokers in Australia play a key role in this area by enabling clients to buy and sell through a trading platform. Most trading platforms are accessible in web and mobile format. 

How Do I Choose the Best FOREX Broker in Australia?

Regulation and Licensing

The ASIC has a reputation for being one of the safest regulators in the world. It rightly has a tier-1 rating, which means that across a range of important measures, like reporting and operating models, it stacks up well against counterparts in other parts of the world.

The ASIC has been an important part of the Australian financial system since the early 1990s. It is the key FOREX regulator. With the rise of retail trading in the 1990s, the ASIC was the driver behind a shake-up of the regulatory framework in the country, changing the way it requested information from, and gave operating guidance to, businesses in the sector.

Now one of the most active regulators in terms of safeguarding the interests of investors, the ASIC demands that every FOREX broker in the country obtain a valid Australian Financial Services License (AFSL). With this license, brokers can start to trade, but they must abide by strict regulations, such as capital adequacy and reporting standards.

Although ASIC has pre-eminence in Australia, there are other major regulators around the world. If you want to learn more about some of the best-regarded regulators, read our article on regulation here. 

To ensure that your broker is legit, you can follow these steps:

• Ask if the broker is licensed to sell you FOREX

• Check if the broker is registered with the ASIC

• Ask your broker to explain how they will compensate you in the event of its insolvency

• Check your statements regularly to ensure that everything is above board.

Remember that it's important to comply with all applicable requirements, including any self-regulatory organizations to which brokers belong, and not just those mentioned here.

Leverage

Leverage refers to the use of borrowed funds to increase your trading position beyond what would be available from your cash balance alone. It allows traders to amplify potential profits from a trade but also increases the potential for significant losses. Essentially, leverage magnifies both gains and losses relative to the amount of capital invested.
Depending on the regulator under which your broker works, you will encounter different policies relative to leverage. Key regulators have implemented specific rules to limit the leverage offered to retail traders as a means of consumer protection.

Here is a list of major reasons your broker must be regulated:

Safety of funds: 

A regulated broker must comply with strict regulations to protect client funds, including segregating client funds from the company's own funds.

Fair trading practices: 

A regulated company must adhere to strict guidelines ensuring products and services are offered fairly and without manipulation, helping create a level playing field for all clients.

Transparency: 

The law compels regulated brokers to be transparent with clients, which assures you of safe, fair trading. In practice, this looks like brokers admitting openly that FOREX trading is highly risky and you could lose your money.

Protection from fraud: 

Regulatory authorities protect clients from fraudulent activities and scams and ensure that FOREX brokers operate within set guidelines that safeguard their clients' interests.

Here are selected leverage rules according to some key regulators:

ASIC, Australia:

30:1 for major currency pairs

20:1 for non-major currency pairs, gold and major stock market indices

10:1 for commodities other than gold and minor stock market indices

5:1 for equities (stocks) and other underlying assets

2:1 for cryptocurrencies

Financial Conduct Authority (FCA), UK: 

30:1 for major currency pairs

20:1 for non-major currency pairs, gold and major indices

10:1 for commodities (excluding gold) and non-major equity indices

5:1 for individual equities and other reference values

2:1 for cryptocurrencies

These limits are in place to reduce the risk of significant losses for retail traders.

Swiss Financial Market Supervisory Authority (FINMA), Switzerland:

FINMA has not set specific leverage limits. However, Swiss brokers must adhere to rigorous capital and risk management requirements, ensuring they don't offer excessively high leverage that could endanger their solvency or their clients' funds.

Commodity Futures Trading Commission (CFTC), USA:

The CFTC enforces a 50:1 leverage limit on major currency pairs and a 20:1 limit on non-major currency pairs for retail FOREX traders.

The U.S. has a distinct regulatory environment, with retail FOREX trading regulated separately from other forms of derivatives trading.

It's worth noting that these rules generally apply to retail clients. Professional or institutional clients might have access to different levels of leverage, depending on the regulatory environment and the broker's policies. As we can see, responsible regulators closely monitor leverage levels. Leverage is a double-edged sword because you can make a lot of money, but you can just as easily suffer heavy losses.

Stop Out and Margin

Stop outs are bad news. It is one of the worst things that can happen to a retail FOREX trader. If this happens to you, rest assured that you have not planned your trading activities well. Here are selected leverage rules for stop outs according to some brokers:

Stop out of 0%: 

Your broker won't close any of your positions, even if your margin level reaches rock bottom. This is because some brokers allow you to end up in the red, which means you might owe them money if your trades keep losing.

Stop out of 50%: 

Once your equity dwindles to half of your used margin, the stop-out alarm goes off. Your broker steps in and starts closing your trades, beginning with those least profitable. This continues until your margin level bounces back above the stop-out level.

Stop out of 100%: 

When your margin level hits 100%, your broker takes the drastic step of automatically closing all your open positions. In some setups where the broker separates margin-call and stop-out levels, the margin call happens at 100% and the stop out at 50%. If your margin level plunges to 50%, your trading platform springs into action with a stop out, closing your trade at the market price.

It's worth noting that while stop-out procedures are meant to protect traders from negative balances, they can lead to significant losses in volatile markets if positions are closed automatically, especially if the market quickly reverses after the stop out. As such, using protective measures, like stop-loss orders and not over-leveraging, is always a good idea. Additionally, the specific percentage and the order in which positions are closed can vary among brokers, so traders need to be aware of their broker's policy on stop-out levels.

Commissions and Fees

Trading fees can sometimes be hard to understand. Be sure to check how these fees compare with industry standards:

Spreads: There are two main kinds of spread, one is fixed and the other is variable. Generally, the spread refers to the gap between two prices, such as the bid/ask rate in a currency exchange rate. If you are getting a spread of 1.4 pips for the EUR/USD, you can rest easy that you are getting a good deal at present market rates. The narrower the better; this means that a spread of 1.4 pips is better than a spread of 2 pips. This article explains more about this important concept.

Commission: This is nothing more than the service charge that brokers require for carrying out transactions on behalf of their clients.

Rollover fees: When you leave a trade open overnight, the broker normally charges a rollover fee for the facility of holding your trade open for that period. This is because they assume the risk of the market changing adversely.

Withdrawal and Deposit Fees: Some platforms might charge fees for depositing or withdrawing funds. Pay attention to this. It's important to be aware of these and any associated limits or conditions.

Subscription or Inactivity Fees: Certain platforms have monthly charges or fees for inactive accounts. Ensure you're aware of these potential costs.

To keep track of trading fees, you can follow these steps:

• Research different brokers and trading platforms.

• Compare the fees of each platform.

• Choose a platform that offers competitive fees and suits your trading needs.

Remember that trading fees can have a significant impact on your trading profits, so it's important to choose a platform that offers competitive fees and suits your trading needs. 

Tradable Assets and Instruments

Payments, Deposits and Withdrawals in Australia

FOREX Trading Customer Service

• Quick resolution of issues
• Educational support
• Assistance with queries during volatile markets
• Account security
• Customized advice (although not all customer service desks offer this)
• Technical assistance
• Regulatory compliance queries

Technical Aspects of the Broker’s Website

Ask Other Traders on Our Network

What Trading Platforms, Tools, and Features Should a Broker Offer?

When picking a trading platform, it's crucial to consider what works for both beginners and experienced traders. Here are some things to think about:

Technical Analysis Tools: Look for a platform that has solid technical indicators. They are useful for making smart trading decisions.

Customization and User-Friendliness: You should be able to tweak the platform to match your style. Within the MetaTrader product family, both MT4 and MT5 are known for their excellent customization features. Here’s a comparison between the two.

Platform Accessibility: Whether it's web-based or downloadable, a good platform should give you options.

Risk-Management Tools: Trading is risky. A top-notch platform should allow you to set stop losses and take-profits to manage those risks.

Performance and Reliability: As a newcomer, you should be looking for a platform that runs smoothly when called upon.

Learning and Help Resources: It's a boost if the platform is not only visually pleasing and customizable, but also comes with guides and support to help you when you're stuck.

To find the perfect platform, here's what you can do:

Figure Out Your Style and Needs: First, decide how you want to trade and what you need from a platform.

Research Different Platforms: Look at what's out there and compare what they offer.

Test with a Demo Account: Try the platforms by using a demo account. This gives you the chance to trade in a risk-free environment with virtual money.

Check Reliability and Reputation: Make sure the platform is known for being dependable and trusted in the trading world.

Remember, the platform you choose can make a big difference in how successful your trading is, so take your time picking the right one.

Which FOREX Broker Has the Best Platform?

Which FOREX Broker Charges the Lowest Fees and Spreads?

Our research shows that ICM’s ECN account is unmatched for low fees and spreads for entry-level and experienced traders alike. 

Which FOREX Broker Offers the Most CFDs?

Which is the Best FOREX Broker for the Most Assets?

Which is the Best FOREX Broker for Professionals?

FOREX Trading Scams and How to Avoid Them

The ASIC’s role is to maintain, facilitate and improve the performance of the financial system and entities in it. It also promotes confident and informed participation by investors and consumers in the financial system. Finally, it seeks to administer the law effectively and with minimal procedural requirements. All this being said, FOREX scams are difficult to launch in a country with so many safeguards.

The ASIC will have no hesitation in suspending the license of any broker that has been found guilty of wrongdoing in terms of partaking in a scam to defraud customers. In terms of external threats, the ASIC has a robust ongoing public awareness campaign where it broadcasts important information on its website on all identified scams, along with helpful fixes and contact numbers for traders to reach if they need to make a report or lodge a dispute.

Will Your Money Be Protected If Your Broker Becomes Insolvent?

The ASIC is an agency that has a comprehensive and exacting set of regulatory guidelines intended to dissuade firms from propagating financial scams. The watchdog continually monitors regulated members using detailed scheduled reporting or even unscheduled requests for information.

The ASIC has rolled out a centralized regulatory structure that gives guidance and recommendations on how brokers should conduct their business. Some of the important guidelines include ensuring that brokers keep at least $1 million in operating capital. Brokers should also maintain client funds that are segregated in tier-1 banks. The ASIC also has an investor compensation scheme in place to ensure that client funds are protected in the event of broker insolvency.

Regarding investor compensation, there is a rather complicated compensation mechanism that means discretionary payments can be made by the Finance Minister to affected claimants. This process is run through the Scheme for Compensation for Detriment caused by Defective Administration (CDDA), which allows individuals to apply for compensation in qualifying cases. The ASIC does not get to make decisions on the outcomes of cases.

The ASIC entertains consumer complaints but encourages claimants to resolve issues at the broker level. If there is no resolution, claimants can contact the Financial Ombudsman service instead. 

The Dos and Don’ts of FOREX Brokers

1. The FOREX brokerage firm cannot recommend a buy or sell;
2. The FOREX brokerage firm must not provide price or market expectations (rise/fall);  
3. The FOREX firm cannot control your financial dealings (deposit/withdrawal);
4. The FOREX brokerage firm should not “manage” your portfolio under any circumstance;
5. The FOREX brokerage firm cannot grant a client a bonus unless clear terms are guiding it beforehand.
6. The brokerage firm must not use bank accounts not under its name; and
7. FOREX brokerage firms cannot have or offer the service of account managers.

Who is Arincen and What Do We Do?

Conclusion

Arincen’s Review Methodology

The team at Arincen collected more than 120 pieces of data covering more than 100 licensed FOREX companies. Data collection was done in three ways:

1.  Companies’ websites.

2.  Other websites that have ranked FOREX companies.

3. A survey questionnaire (referred to here as Survey “1”) was sent to the companies invited to participate in the exercise. We have identified 13 criteria for our assessment, each containing several aspects and carrying its own relative weight. These include licensing, deposits and withdrawals, number of assets, etc.     

Afterwards, we validated the data by:

1.  Registering with FOREX companies as a secret shopper and/or as Arincen.

2.  Survey number “2,” in which we asked these companies’ customers for important feedback and experience.

The next step saw us evaluate and rank each company, relying on the hard work of 15 Arincen employees. We were very careful in ensuring the most accurate assessment possible, including considering different languages, as well as the various mobile-app operating systems, e.g., Apple, Samsung etc.

To add credibility to our research project, we sent a final and third survey (referred to here as Survey “3”) to enable participating FOREX companies to evaluate our research and whether it accurately reflects the realities on the ground. We were fortunate enough to receive a mark of 9.9 out of 10! We have kept to a minimum the margin of error, which stood at a measly 1%. To learn more about how we came up with the evaluation, please click here.