If you’ve been into forex trading for a while, you will already know how far the local forex trading industry has come in the past decade. There weren’t very many forex brokers in the beginning, and that’s just one of the many aspects of the industry that have changed for the better over the past few years.
Nevertheless, keep in mind that no matter where you’re based, not all brokers are equal – the spectrum of good, bad and ugly is a constant one everywhere you look. Whether you’re a seasoned trader or a newbie, you must do your due diligence and research your broker properly. Some sensible yardsticks to measure a potential broker by include whether the fee structure suits you; whether the trading tools are accessible and user-friendly; how many options for withdrawing your money you’ll have; what level of education, support and customer care are provided; and how safe your money is when you make trading deposits.
More is more, and leverage is unlimited
These days, there are many good forex brokers Down Under. In fact, the volume of forex trades now exceeds the cumulative turnover for the Australian Securities Exchange (ASX) per day. That is an impressive statistic if you think about it – forex trading is so popular in Australia that some of the largest forex brokers have more cash trading volume than the ASX on any day of the week you choose to examine.
There’s also the fact that forex trades and leverage are now curtailed in the US thanks to post-2008 recessionary enactments to this effect. The leverage limit in Australia – at 500:1 – is now 10 times that of the US, which is regulated at a maximum of 50:1.
Should you be opening your trading account in Oz?
As far as forex trading advice goes, this turns out to be a good idea for many people. While you could open your account in the Cayman Islands, do you really want to raise suspicion of tax evasion and have that headache after the Panama Papers scandal? Cyprus may be attractive to some people, but you’ll still be exposed more from a safety point of view than you would in the UK and certainly Australia. Plus, you could argue that Cyprus’ proximity to bailed-out-to-its-eyeballs Greece isn’t comforting.
It all goes back to the earlier discussion on choosing a reliable, transparent broker with a good reputation. The UK and Australia have regulatory frameworks and legislation in place that leaves little wiggle room for brokers who may be tempted to act as though they were banks and lend your money to third parties, exposing it to risk.
Thanks to the regulations that are now in place, brokers in Oz are generally transparent about the safety of your money. You will find that your capital deposits are bound to be ring fenced, so they cannot be used for anything other than your actual trades. The funds cannot, for example, be used to conduct the broker’s business. Ring fencing means that your money is transferred to a third-party financial institution, where it is held in an appropriately safe manner, such as a trust.
When it comes down to it, you need your deposit and profit’s safety guaranteed or it will inhibit your trading, even if this is on a subliminal level. You also need the flexibility to know that you have access to significant leverage bandwidths should you so choose. After all, what is forex or CFD trading without leverage? These two facets are fundamental, and seasoned traders will tell you that they are best facilitated in Australia.