Forex trading is open to everybody. It does not matter where you reside on earth today, you can always invest in Forex trading and make some cool money for yourself as a result. If you trade Forex and make a profit from it, you can even sack your boss and become a full-time Forex trader. Yes, Forex trading can be that profitable. However, Forex trading is not a get-rich-quick scene. If anyone has ever told you that you can make a six-figure income from Forex trading overnight, the person is clearly telling you a lie. You need to think twice before you believe such things.
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This is why we have set up our website, Emu Forex. Our intention is to enlighten you and help you to better understand one or two very important things about the Forex market in Australia. With the help of the information, we provide on our platform, you can venture into Forex trading successfully and also make a regular income as a Forex trader. Additionally, our website will help you to avoid some of the popular pitfalls in Forex trading. This way, you will not fail where others failed before you.
The Forex market is the most active of all markets on earth today. It also boasts of up to $5 trillion daily turnover. It is a highly liquid market. This high liquidity makes it possible for traders to make money by trading Forex. It is possible to make money by trading Forex. Be that as it may, Forex trading is risky. So, you need to tread carefully when trading Forex. This way, you will never take the wrong step. In the remaining sections, we will introduce the Forex market to you better. We will also give you a thing or two that you need to know before you start. At the end of the day, you will be well equipped as a Forex trader in Australia.
What is Forex market?
The Forex market is open to everybody and you are free to register and make money. Forex is an acronym for Foreign Exchange. So, Forex market means foreign exchange market. Everyone is welcome to Forex trading. All you need is the right equipment. The beautiful part of it is that anybody can obtain the equipment. The only tools you need are a laptop and an internet connection. Aside from these tools, you also need a good knowledge of how the Forex market works. We are going to focus more on this page.
The Forex market is huge in Australia. Do not also forget that the Australian dollars play a major role in global Forex trading. In fact, Sydney is one of the economic hubs of the world. There is also a correlation between Australian dollars, oil prices and the Chinese economy.
In the next section, we will focus on the basic things you need to know about Forex trading.
Forex trading basics
As we mentioned earlier, “Forex” stands for foreign exchange. It is a market open to investors to trade international currencies. The investors trade the currencies against one another. Traders do record profits and losses when trading Forex. The trader records profit or loss due to changes in the prices of the assets. The trader records profit if the market shifts in the direction he predicted. He will record losses if the price shifts in the opposite direction. The Forex market is fast-paced. Currency trading occurs round the clock also. You can also call the Forex market the currency market.
Trading can take place round the clock from Monday to Friday. There is no trading activity on weekends in the Forex market. The Forex market is very big. It is far bigger than the stock market. As we mentioned earlier, the trading volume per day in the Forex market can be as high as $5 trillion. The Forex market boasts of very high liquidity. Because of this, you can buy or sell currencies without any impact on the value of that currency. Studies show that the asset with the highest liquidity is currency.
The Forex market is available to all in Australia. As a beginner, you can easily venture into it. Be that as it may, you will need adequate knowledge about Forex trading before you start. This is the only way by which you can make a profit from it. It can be challenging to learn about Forex trading. You can do it successfully, however, if you can put in the work.
Forex trading can help you to make money, but it will not make you rich overnight.
Introduction to Forex trading
Forex Tardif has to do with the buying or selling of one currency against the other. The buying and selling take place simultaneously also. Forex trading occurs in pairs. The two currencies involved are called currency pairs. The first of the two currencies is the base currency. The second of the pair is the quote currency. When you buy a currency pair, it means you are buying the base currency.
This also means that you are selling the quote currency at the same time. That is how the Forex market works. If you are buying AUD/USD, for example, it means you are buying the AUD (Australian dollars) and selling the USD (United States dollars). The reverse comes to play when you sell the currency pair.
The price at which you buy is the bid-price and the price at which the broker agrees to sell is the ask-price. The bid price is also the amount of the quote currency required for buying the base currency. The ask-price is the opposite of the bid price.
You will come across so many currency pairs in the Forex market. So, you will not only be dealing with the Australian dollars alone. Before you can make money from Forex trading, you need to first learn how the currency pairs move.
Things you need to start trading Forex
Before you can start trading Forex, you need to have some very important things ready. Like we mentioned earlier, you need a laptop that has an internet connection. Your essential needs do not end there, however. You will also need the following:
- A good Forex broker
- The right trading account
- A good trading strategy
How to find a Forex broker
A Forex broker is about the most important individual in Forex trading. You can only trade Forex if you register with a Forex broker. There are so many Forex brokers available to Forex traders in Australia. Each of the Forex brokers has its pros and cons. It is in your best interest to investigate each of them before you register with them. During the investigation, find out which of them can meet your priorities in Forex trading. If you fail to choose right, you may fail to make a profit from Forex trading.
Studies show that only about 5% of Forex traders make a profit regularly. Some of the remaining 95% are unable to make a profit because they register with the wrong Forex brokers. Your own situation will not be so if you make the right choice of a Forex broker to register with. If you are to have a good Forex trading experience, then you must choose your broker carefully. You must take your time when choosing a Forex broker. This is in your best interest.
Check below for some of the things to consider when choosing a good Forex broker.
Check for regulation
Before you register with a Forex broker, check if it is regulated. You should never make the mistake of registering with an unregulated Forex broker. You will be the worse for it. As a Forex trader in Australia, you should go for a Forex broker regulated in the country. The Australian government has its own regulatory agencies. Find out if that broker is under the regulation of the government agencies in Australia.
The body responsible for regulating the Forex market in Australia is ASIC. ASIC is an acronym for the Australian Securities Investment Commission. You can also trust those brokers under the regulation of other reliable agencies across the globe. Be that as it may, it is better to look for one under the regulation of ASIC. This way, your investment will be safe since the investment is with a body under the watchful eyes of the government agency.
If you do not know whether or not the particular broker is under the regulation of ASIC, you can easily find that out. What you and to do is to visit the ASIC website to check. You can check the list of Forex brokers under the regulation of ASIC on the website. So, simply check if the broker you are considering is on that list. This means that no broker can deceive you about its regulatory status with ASIC. There is no centralization in the Forex market. As a result of this, fraudulent activities can take place. One of the major sources of fraud is the Forex broker. This is why you must only go for one that is regulated.
Any broker on the ASIC website is under the regulation of the agency. The fact that a broker is on that list means that the broker meets industry standards. It also means that the broker is audited and reviewed regularly by the agency. So, you will be in safe hands if you register with such a broker.
Quality of customer service
You should find out if the broker offers good customer service before you register there. A reliable Forex broker will offer good customer service. You can identify an unreliable broker by the poor quality of the customer service they offer. So, the first thing to consider when looking for a Forex broker in Australia is the quality of customer service.
A beginner in Forex trading will surely have so many questions. Only a broker with good customer service can have the patience to provide helpful answers. As a beginner, you should never register with a broker that has no evidence of good customer service. If you do, you will live to regret it. Find out if there is evidence of good or poor customer service. Also, find out if the broker has unresolved customer care issues. Reading reviews about the broker can help you to determine its quality of customer service. You should steer clear of that broker if there are barrages of complaints about its services.
Even as an experienced Forex trader, you need a broker with good customer service. Despite your experience, you will still have one or two questions to ask. You want to find out if the customer service agents respond very fast to complaints. You also want to find out if the broker provides a series of contact methods. Some brokers can even offer a toll-free call line. This will enable their customers to communicate without paying a dime. A committed customer care team will make your trading experience a beautiful one.
Account opening ease
Before you register with a broker, also find out about the process of opening an account. The process will be hitch-free. Find out also about the verification process. A good Forex broker will make the verification go hitch-free. If the process seems to be complicated, then you should look for another Forex broker.
Some brokers provide different types of accounts. However, the account opening process is almost the same. If it is confusing to you, you can contact the customer care desk. This is one of the areas where good customer service is essential. The customer service agents should be able to explain to you the various account types. They should also be able to enlighten you on the right one to choose.
Privacy is important
Before you register with any Forex broker out there, first find out about security and privacy. A good Forex broker will never sell your personal details to anybody. It will also not share those details without first communicating with you and getting your consent. All the information you provide on the platform will never get out of the broker’s database. A good broker will have a secure website. As a result, no one can steal your personal details. Some brokers even take extra caution by improving their website’s security regularly. You will be safe with such brokers. Traders provide their payment details on Forex brokers. The payment details will be safe if the broker is secure.
You need to equally read reviews about the broker before you register there. Find out if there is any complaint of lost funds or compromised security. You should steer clear of such a broker if you read such reviews.
How much money do you need to open an account with the broker? This is yet another very important consideration when choosing a broker. Find out if that broker requires commission before you open an account there. You can come by different types of accounts on brokers. The minimum despot differs from one type of account to another. It is also good for the broker to offer good leverage. The amount of leverage indicates how much money you can borrow to open a trading position on that broker’s platform.
Some brokers offer 50:1 leverage; it can be higher on some other brokers. The profit you can make will increase with an increase in the leverage you use. Be that as it may, always bear in mind that leverage is a two-edged sword. It can help you to make a huge profit and can also make you lose a lot of money. So, you must use leverage with care when trading Forex.
Consider the spread
The spread is the cost of trading a currency pair. Many brokers make money from spread or commission. Some brokers can offer fixed spread and some other ones can offer variable spread. The two types of spread have their specific pros and cons. For example, a news release will have no effect on a fixed spread. This is never the case with a variable spread. High volatility also does not have an effect on a fixed spread. So, you want to find out the type of spread the broker allows before you register there to trade Forex.
Additionally, some brokers offer zero spreads on certain currency pairs and at certain trading period. Some brokers can even offer zero spread when you register some particular types of account with them. You need to consider all these factors before you register on any broker to trade Forex.
Available trading platform
The type of trading platform available on the broker is very important also. Virtually all brokers support MetaTrader 4 platform. The MetaTrader 5 trading platform is more recent than the MetaTrader 4. The MT5 is, therefore, not as popular as the MT4 platform. Be that as it may, many Forex brokers are already offering the MT5 trading platform. The MT5 comes with more features than the MT4. Despite that, many traders still prefer to use MT4.
Aside from the MT4 and MT5 trading platforms, you can also come by WebTrader on many trading platforms. Some brokers also offer a proprietary trading platform. The proprietary trading platform is a development of the broker itself. The proprietary trading platform can be modeled in line with either MT4 or MT5. The condition of trading can differ depending on the trading platform you use. Some brokers give concessions to those who use their proprietary trading platforms. Such brokers may decide to offer lower spread for those using their proprietary trading platforms.
You need to properly assess these conditions before you register with any Forex broker. You should read the terms and conditions surrounding the use of each trading platform also. This will help you to decide the right one to use among them.
Mobile trading platform
Additionally, you want to check if that broker offers a mobile trading app or not. The mobile trading app will give you the opportunity to access the broker’s platforms on your Smartphone. You should steer clear of any broker that does not offer a mobile app. Even if the broker offers a mobile app, you should investigate the app first before using it. A good mobile app will be easy to navigate.
It will also not put you at a disadvantage when you use it. Find out if the mobile app hangs or not. Also, find out if it contains spyware or malware. All the findings above may be time-consuming, but they are all necessary. They will enable you to make the right choice when choosing a Forex broker in Australia.
Forex trading time zone
The Forex market is available for the 24hours of the day. It is also open for 5 days of the week. Some count it as 6 days. This is because the market classes by Friday night and reopens by Sunday evening in some parts of the world. Trading hours in the Forex market cross three time zones from the beginning of a trading day to the end. As a Forex trader in Australia, you need to know the trading period as they apply to you.
- Asian time zone: The market opens in Sydney by 7:00 EST and closes by 16:00 EST. The Forex market opens in Tokyo by 9:00 EST and closes by 18:00 EST.
- European time zone: The market opens in London from 17:00 EST and closes by 01:00 EST.
- United States time zone: The Forex market opens in New York by 22:00 EST and closes at 06:00 EST.
You need to understand the Forex trading time in Australia so that you can know when to trade. You also need to understand how each of the trading sessions overlaps. A good Forex trader needs to know the most profitable time to trade Forex. While the Forex market is open 24 hours of the day, you cannot afford to trade at all times.
As a Forex trader, you need to learn the number of trading activities that occur at a particular time. The liquidity or volatility of each currency pair depends on the trading session. So, you need to know how currency pairs behave at particular times. You should focus more on the currency pair that you have an interest in. Find out when it is the best time to trade that currency pair. You also want to find out how other currency pairs can affect the one you have an interest in.
As a Forex trader, you need to take note of what happens in the first hour in your preferred trading session. Studies show that what happens in the first hour can determine what will happen in the rest of the day. So, you should pay close attention to the trading session you prefer from the first hour.
You can use technical indicators to predict the market. You can find so many technical indicators on Forex brokers. There is always higher liquidity when there is an overlap in trading sessions. This comes up because there are more trading activities in the Forex market. During this overlap period also, Forex brokers with ECN market will reduce or tighten their pip spreads.
Another thing to consider is the news release. A good Forex broker will pay attention to when economic news will come up. Bear in mind that not all economic news are important. You should only focus on the high-impact news. Such news usually has a great influence on price movement. You can get the information about the news from the economic calendar. The economic calendar will even tell you when the news will come up. It will equally tell you which is high-impact news and which is not. Economic calendars are available for free online today.
- Employment vs. unemployment
- Interest rates
Studies show that the price can even start reacting to the news before the release of the news. So, expect the price to respond to the news before and after the news release. In fact, news trading is a popular Forex trading strategy. You need to understand how news data affects the market before you can use such a strategy successfully.
There is no way you can make headway from Forex trading without education. You need to learn everything you can about Forex trading before you start. You will find so many free educational materials on many Forex brokers’ platforms. In fact, you should consider the educational materials offered by the Forex broker before registering there. As a beginner in Forex trading, you need as many educati0on materials as possible. So, you should focus on a broker that offers many of them.
You do not need to depend only on the broker for education. You can also source for Forex trading education material elsewhere. You can find so many online platforms offering free Forex trading education. Some many also offer paid services. It all depends on you to choose which you prefer. The tips below will help you to choose the right Forex trading education source:
- A good instructor in Forex trading will make the presentation interesting. He will also make it engaging end enjoyable. It needs to be engaging so that a newbie will not find himself giving up midway. A newbie can be confused about these things. But there will be limited confusion if the education material and engaging. You are better off with live charts, graphics and demonstrations. This will make teaching a lot more realistic. This is why it is not a good idea to attend the Forex trading course during the weekend.
- Look for an outlet that offers a flawless Forex trading course. Make sure that the materials come in a technically-proficient manner. This will help you to learn about Forex trading better and more effectively. It is equally important for the training materials to be up-to-date. Accessibility should equally not be a problem.
- Accuracy is very important. The presentation should also be professional. Things like poor-flowing contents, confusing fonts, poor design choices, or spelling errors should never come up in the materials. These are signs that the instructor cannot be trusted.
The dynamism of the Forex market makes it stand out. The fact that the Forex market is dynamic means that you must continue to learn. New challenges are coming up by the day in the Forex market. A strategy that worked yesterday may fail to work today. So, you must be up to date in your knowledge base. This way, you will be able to modify your strategy to meet up with the dynamism in the Forex market. So, learning is a continuous process in the Forex market.
As we mentioned before, you can get a series of training materials on the platform of the broker. However, you are better off with training materials from outside the broker’s platform. You can even get loads of help on YouTube. You can attend Forex trading seminars too to improve your knowledge. Additionally, you can visit forums that focus on discussing the Forex market. Whatever the case may be, always strive to educate yourself in Forex trading. This is the online way via which you can become a successful Forex trader.
Beware of scam
Every Forex trader should beware of the scam that goes on in the Forex trading world. The scam can take many shapes. It can be from the Forex broker or elsewhere. You can curtail scam activities by Forex brokers if you register with a regulated broker. Check below for tips on how to avoid scam in Forex trading;
- Only register with a regulated broker. You should place at the top of your list brokers regulated by the ASIC.
- Read the terms and conditions properly. This will help you to know if the broker is transparent with its dealings or not. You should steer clear of shady brokers. If anything looks questionable in the terms and conditions, then you should steer clear of the broker.
- Avoid that broker if it makes a promise that looks too good to be true. The Forex market can help you to make money. At the same time, Forex trading will not turn you into an overnight, millionaire. You should avoid any broker that says anything different from this point.
- Cold callers are mostly scammers. So, take note of brokers that perpetrate cold calling and steer clear of them. Such brokers really have nothing to offer.
- You should never make the mistake of giving someone else your account to manage. Most of them have nothing to offer. They will most likely lose your money for you and leave you with no hope of a refund. Do not believe what the so-called account managers have to say; it is all a lie.