The forex market is one of the biggest and most liquid entities of its type anywhere in the world, with a total daily trading volume of $6.6 trillion. Incredibly, the market’s total value is estimated at a staggering $1.934 quadrillion, while this is the only financial market accessible 24 hours a day.
The Australian Dollar (AUD) is one of the eight major currencies traded in the forex market. These assets comprise the world’s seven major currency pairs (which pit entities like the AUD against the US Dollar), with these pairings accounting for 68% of all daily trades.
However, if you want to trade forex in Australia, you should note that the rules and guidelines vary from jurisdiction to jurisdiction. So, what do you need to know about forex trading down under, and how can you get started?
What Are the Key Considerations When Trading FX in Australia?
Let’s start by looking at the key considerations about trading forex in Australia, including some of the main questions you’re likely to have as an interested investor.
#1. Is Forex Trading Legal Down Under?
While forex trading has a questionable reputation in some jurisdictions, it’s fully legal and regulated in Australia. Australia boasts a strict regulatory framework overseen and managed by the Australian Securities & Investment Commission (ASIC). However, this regulatory setup is also incredibly market-friendly, encouraging investment from across the globe and driving collaboration with similar regulators like the FCA in the UK.
#2. Who Controls the AUD and is FX Trading Taxed?
All major currencies are controlled by the relevant central bank, which is the Reserve Bank of Australia in the case of the AUD. Historically, this has maintained inflated interest rates to help support strong currency values. You should also note that FX trading in Australia is a legal source of taxable revenue, and it’s your responsibility to understand your precise liabilities as a trader.
#3. What Are the Australian Trading Times?
According to Australian Eastern Standard Time, the Sydney Exchange opens at 7.00 am before closing at 4 pm. Tokyo, which also handles Asia-Pacific trades and currencies, is open from 9.00 am and 3.00 pm, with these periods most likely to optimize liquidity for the AUD and similar currencies. Of course, the market is also accessible 24 hours between Sunday and Friday across three geographical trading sessions, so there’s ample opportunity to trade whenever and wherever you are.
How to Trade Forex in Australia
Now that you understand the legality of forex in Australia, its regulatory framework, and the main trading windows, the question remains: How can you trade international currencies safely and successfully and launch your brand-new career?
Here’s a brief guide to help you on your way!
#1. Choose Your Currency Pairs and Investment Vehicle
Forex is a speculative market where you can buy or sell currencies in dedicated pairs. Popular pairings include AUD/USD and AUD/CHF, which is heavily influenced by the robust trade relationship between Australia and China.