{"id":92934,"date":"2023-08-06T01:16:00","date_gmt":"2023-08-06T01:16:00","guid":{"rendered":"https:\/\/arielle.com.au\/?p=92934"},"modified":"2026-05-04T00:14:21","modified_gmt":"2026-05-04T00:14:21","slug":"what-is-forex-trading-australia","status":"publish","type":"post","link":"https:\/\/arielle.com.au\/what-is-forex-trading-australia\/","title":{"rendered":"What Is Forex Trading? (Tips For Australians)"},"content":{"rendered":"<span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 9<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>\n<p>The forex market is larger, more active and more lucrative than the stock market, with a daily trading volume of around $6 trillion. Sounds like an exciting opportunity, right?<\/p>\n\n\n\n<p>However, because it\u2019s generally considered more complex and risky, forex trading is not ideal for the uninformed trader.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>Become well-versed in how to trade forex in Australia by reading this guide. <\/span><\/div><\/div>\n\n\n\n<p>We cover the terminology, strategies and trading tips needed to improve your understanding of what forex trading entails and the pitfalls to avoid.<\/p>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/aud-to-gpb-forecast\/\">AUD to GBP Expert Forecast And Predictions<\/a>).<\/strong><\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Is Forex?<\/strong><\/h2>\n\n\n\n<p>Forex is a term used to describe the \u2018foreign currency exchange\u2019 market, abbreviated to FX.<\/p>\n\n\n\n<p>The FX market determines the rate of exchange between fiat currencies \u2014 the real cash issued by governments around the globe as legal tender. <\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"791\" src=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/foreign-exchange-turnover-1024x791.jpg\" alt=\"foreign exchange turnover\" class=\"wp-image-93589\" srcset=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/foreign-exchange-turnover-1024x791.jpg 1024w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/foreign-exchange-turnover-300x232.jpg 300w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/foreign-exchange-turnover-768x593.jpg 768w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/foreign-exchange-turnover.jpg 1230w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>The forex market is characterised by its:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Massive size and liquidity <\/strong>because currency is always in-demand. That means you can quickly and easily buy and sell currencies. High liquidity also means that even trades of a significant size are less likely to influence market prices.<\/li><li><strong>Decentralised structure. <\/strong>It\u2019s a decentralised over-the-counter (OTC) market coordinated through a network of central\/international banks, commercial banks and other financial institutions and forex brokers.<\/li><li><strong>24-hour availability, 5 days a week <\/strong>due to international timezones and the fact there\u2019s no central marketplace that opens or closes. In Australia, you can trade from Monday 8 am to Saturday 8 am (AEST).\u00a0<\/li><\/ul><\/div><\/div>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Is Forex Trading?<\/strong><\/h2>\n\n\n\n<p>Forex trading involves what\u2019s known as currency pairs, which are simply the two currencies being exchanged on forex markets.<\/p>\n\n\n\n<p>Although it\u2019s an OTC market, individual forex traders in Australia would typically trade forex through a broker or a <a target=\"_blank\" rel=\"noreferrer noopener\" href=\"https:\/\/arielle.com.au\/best-forex-trading-platforms-australia\/\">forex trading platform<\/a> (i.e., you don\u2019t need to hold or transact the actual fiat currencies).&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">Predicting changes in the difference in value between the two currencies on the forex market is how a trader makes a profit or loss on the position they open with a broker.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>A currency\u2019s value relative to another currency can fluctuate often, considerably, and unpredictably based on changes in supply and demand \u2014 which is why forex trading is so complex.<\/span><\/div><\/div>\n\n\n\n<p>Forex traders look to profit from currency pairs through both long and short positions:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>With a long position<\/strong>, your aim is to buy at a low exchange rate before selling when the rate of exchange between the currency pair increases due to the base currency becoming stronger.<\/li><li><strong>You can also short-sell<\/strong> a currency pair in search of profits if you believe that a currency will weaken relative to its paired currency.<\/li><\/ul><\/div><\/div>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/what-is-slippage-in-trading\/\">What Is Slippage In Trading?<\/a>)<\/strong><\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Forex Currency Pairs Explained.<\/strong><\/h2>\n\n\n\n<p>On the forex market, currencies are represented by a three-letter code, such as AUD for the Australian dollar.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"790\" src=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/forex-currency-pairs-1024x790.jpg\" alt=\"\" class=\"wp-image-93591\" srcset=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/forex-currency-pairs-1024x790.jpg 1024w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/forex-currency-pairs-300x232.jpg 300w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/forex-currency-pairs-768x593.jpg 768w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/forex-currency-pairs-1536x1186.jpg 1536w, https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/forex-currency-pairs.jpg 1640w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>In a currency pair, the base currency you\u2019re buying is listed first, followed by the \u2018quote\u2019 currency\u2014which is the currency it will be exchanged for.<\/p>\n\n\n\n<p>Commonly traded currency pairs on Australian trading platforms include:&nbsp;<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>EUR\/USD<\/strong><\/li><li><strong>USD\/JPY<\/strong><\/li><li><strong>AUD\/USD<\/strong><\/li><li><strong>GBP\/USD<\/strong><\/li><li><strong>USD\/CHF<\/strong><\/li><\/ul><\/div><\/div>\n\n\n\n<p>Currency pairs are categorised in the following ways:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Major currency pairs<\/strong> include two currencies from countries with high volumes of international transactions, one of which will always be the US dollar (USD). Because the majors represent the world\u2019s largest economies, they provide more trading opportunities due to higher liquidity and market volatility.<\/li><li><strong>Minor\/cross currency pairs<\/strong> are used to describe a pairing that includes major currencies, but where neither currency is the US dollar.<\/li><li><strong>Exotic currency pairs <\/strong>include one major currency and a currency from an emerging market that\u2019s not as widely traded (e.g., the Turkish Lira or the Singapore dollar).<\/li><\/ul><\/div><\/div>\n\n\n\n<p><strong>(Related: <a href=\"https:\/\/arielle.com.au\/pepperstone-review\/\">Pepperstone Review: Best CFD Broker In Australia?<\/a>)<\/strong><\/p>\n\n\n\n<div style=\"height:41px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Which Ways Can You Trade Forex?<\/strong><\/h2>\n\n\n\n<p>Forex trading can include:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Spot trading,<\/strong> where two currencies are directly exchanged at current market rates and settled \u2018on the spot.\u2019<\/li><li><strong>Forwards, swaps, futures and options contracts,<\/strong> where you buy and sell currencies at a current price for settlement at a future date, which is typically used to hedge against falls in the exchange rate.<\/li><\/ul><\/div><\/div>\n\n\n\n<p>Traditional forex trades involve the literal purchase and exchange of a certain amount of one currency for another. <\/p>\n\n\n\n<p>However, most retail investors will use OTC derivatives, such as contracts for difference (CFDs) offered by online stockbrokers to execute forex trades in Australia.<\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Are Forex Contracts For Difference (CFDs)?<\/strong><\/h2>\n\n\n\n<p>In a CFD transaction, the trader and the broker agree to exchange the difference in the currency pair&#8217;s value between the contract&#8217;s opening and closing.<\/p>\n\n\n\n<p>CFDs have risen in use among Australian traders because they:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Simplify forex trading<\/strong> by allowing you to speculate on the price movements of currency pairs without owning or having to deliver the underlying currency.<\/li><li><strong>Enable both long and short positions<\/strong> on the currency pair, so you can potentially profit from rising and falling prices.<\/li><li><strong>Let you trade on margin<\/strong>, which means you can open more substantial leveraged positions with a smaller amount of upfront funds in your account. Leverage magnifies both your potential profits and losses. If your account drops below the required margin, you\u2019ll receive a \u2018margin call\u2019 from your broker to deposit more funds if you want to keep a trade open\u2014which can further exacerbate the size of your losses.<\/li><li><strong>Are offered by many popular online brokers<\/strong>, giving you access to a wide range of trading tools and platforms.<\/li><\/ul><\/div><\/div>\n\n\n\n<p><strong>(Related: <\/strong><a target=\"_blank\" rel=\"noreferrer noopener\" href=\"https:\/\/arielle.com.au\/what-is-leverage-in-trading\/\"><strong>What Is Leverage In Trading?<\/strong><\/a><strong>)<\/strong><\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Factors To Understand Before Trading Forex.<\/strong><\/h2>\n\n\n\n<p>Here&#8217;s where beginner forex traders typically get unstuck.<\/p>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Margin And Leverage.<\/strong><\/h3>\n\n\n\n<p>Trading CFDs lets you use leverage to increase the size of your position.<\/p>\n\n\n\n<p>For example, a leverage ratio of 30:1 would allow for a trade valued at $30,000 with just $1,000 in funds from your account.<\/p>\n\n\n\n<p>Forex brokers require that you have a minimum amount of money available in your account to cover open positions that use leverage, known as margin.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">The amount or percentage of margin required varies by broker or forex trading platform, depending on the size of a trade.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Spreads.<\/strong><\/h3>\n\n\n\n<p>The fee charged by forex brokers is typically referred to as the &#8220;spread,&#8221; which is the difference between the buying and selling price they offer for a currency pair<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>This may vary from the market value, enabling the broker to make a profit.<\/span><\/div><\/div>\n\n\n\n<p>Forex brokers may describe spreads in terms of their pip value (e.g., if the spread is 0.8 and the value per pip for a specific currency pair is $10, the cost is $8).<\/p>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Pips\/Points.<\/strong><\/h3>\n\n\n\n<p>Pip is an abbreviation for \u2018points in percentage\u2019 and describes the smallest increment size of the change in an exchange rate\u2019s value.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>A pip is represented by the fourth decimal place in most currency pairs.<\/span><\/div><\/div>\n\n\n\n<p>For example, if the EUR\/USD pair moves from 1.2500 to 1.2501, that is a one-pip move.How many pips\/points the exchange rate moves determines the size of your profit or loss.<\/p>\n\n\n\n<div style=\"height:59px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4. Lot.<\/strong><\/h3>\n\n\n\n<p>The standardised unit of measure for a certain amount of currency.<\/p>\n\n\n\n<p>In forex trading, lot sizes typically range from micro-lots (0.01 lots) to standard lots (100,000 units of the base currency).<\/p>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5. Interest And Other Fees.<\/strong><\/h3>\n\n\n\n<p>Overnight interest fees are typically charged when you hold a position open overnight (beyond the trading day&#8217;s close), which generally ranges from 1-3% per year.<\/p>\n\n\n\n<p>If you want to open a trade in anything other than Australian dollars, your forex broker will charge a currency conversion fee.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">Some forex brokers may charge other fees such as commissions, account maintenance, or withdrawal fees. These fees may be a flat rate or a percentage of the transaction value.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div style=\"height:41px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Laws About Forex Trading In Australia.<\/strong><\/h2>\n\n\n\n<p>Is forex trading legal?<\/p>\n\n\n\n<p>Yes, it\u2019s legal to trade forex in Australia, but the financial watchdog ASIC has placed <a target=\"_blank\" rel=\"noreferrer noopener\" href=\"https:\/\/asic.gov.au\/about-asic\/news-centre\/news-items\/read-this-before-trading-cfds\/\">limits on the amount of leverage<\/a> that regulated forex brokers operating in Australia can offer on CFDs.<\/p>\n\n\n\n<p>The rules are designed to protect consumers from significant losses \u2014 because ASIC\u2019s research found most retail traders who use CFDs lose money. The leverage limits for trading forex CFDs are:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>30:1<\/strong> for major currency pairs; and<\/li><li><strong>20:1<\/strong> for minor currency pairs.<\/li><\/ul><\/div><\/div>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Example Of A Forex Trade.<\/strong><\/h2>\n\n\n\n<p>Let&#8217;s say you&#8217;re an Australian forex trader who believes the euro will appreciate against the Australian dollar in the short term.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>You decide to open a long position on the EUR\/AUD currency pair.<\/span><\/div><\/div>\n\n\n\n<p>At the time of trading, the exchange rate is 1.5600, meaning you can buy one euro for 1.5600 AUD. <\/p>\n\n\n\n<p>Using 1:10 leverage, you spend $1000 to open a position valued at $10,000 AUD, which allows you to buy 6,410 euros.<\/p>\n\n\n\n<p>Over the next few days, the exchange rate for EUR\/AUD rises to 1.5800, reflecting the strengthening of the euro against the AUD.&nbsp;<\/p>\n\n\n\n<p>You decide to close your position, effectively \u2018selling\u2019 your euros for Australian dollars, and thereby realising a profit.<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>Your 6,410 euros are worth $10, $114 AUD at the new exchange rate of 1.5800, netting you a profit of $114 AUD.<\/span><\/div><\/div>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How To Start Trading Forex In Australia.<\/strong><\/h2>\n\n\n\n<p>Individuals new to forex trading can easily get started by using a regulated forex broker or <a target=\"_blank\" rel=\"noreferrer noopener\" href=\"https:\/\/arielle.com.au\/best-stock-trading-app-australia\/\">share trading app<\/a>. Follow these steps.<\/p>\n\n\n\n<div style=\"height:60px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1.&nbsp;Choose A Forex Broker.<\/strong><\/h3>\n\n\n\n<p>If you don\u2019t already have a forex trading account with a broker that offers forex or CFDs, select a licensed forex provider, create an account and add funds.<\/p>\n\n\n\n<p>You\u2019ll need to deposit enough money to meet your broker\u2019s minimum margin requirements for the size of forex trades you have in mind.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">Remember that trading success is never guaranteed, so only add an amount of money you\u2019re prepared to lose.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div style=\"height:61px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Establish A Trading Strategy.<\/strong><\/h3>\n\n\n\n<p>Make sure you understand how forex works and the risks associated with the trading products you\u2019re using. <\/p>\n\n\n\n<p>Read the product disclosure statements provided by brokers.<\/p>\n\n\n\n<p>Develop a clear plan for how you\u2019ll spot good trading opportunities, what kind of trades you\u2019ll make, how much you\u2019ll spend, and how you\u2019ll determine when to open and close your positions.<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Important!<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">You&#8217;ll be targeted with ads that sell trading robots and software that promises to automate FX trading, thus enabling you to passively earn profits from forex markets. The old adage \u2018if it sounds too good to be true, it probably is\u2019 applies here \u2014use caution. The Australian Government\u2019s MoneySmart site suggests that before you use a service like this, check they are licensed through\u00a0<a href=\"https:\/\/connectonline.asic.gov.au\/RegistrySearch\/faces\/landing\/ProfessionalRegisters.jspx\" target=\"_blank\" rel=\"noreferrer noopener\">ASIC Connect\u2019s Professional Registers<\/a>.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div style=\"height:58px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3.&nbsp;Test Your Trading Strategy.<\/strong><\/h3>\n\n\n\n<p>If you\u2019re unsure about the strength of your approach to forex trading, use practice \/ demo account features offered by your forex trading platform to do a few test runs.<\/p>\n\n\n\n<p>Use a demo account to:&nbsp;<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Familiarise yourself<\/strong> with the platform\u2019s research tools.<\/li><li><strong>Practice placing trades<\/strong>, different types of market orders and closing positions.<\/li><li><strong>Test and refine your trading strategies<\/strong> before you commit real cash.\u00a0<\/li><\/ul><\/div><\/div>\n\n\n\n<div style=\"height:59px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4.&nbsp;Place Your Trades And Review Regularly.<\/strong><\/h3>\n\n\n\n<p>Once you\u2019re ready, we recommend you:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Place one trade at a time<\/strong> to reduce the complexity of monitoring multiple currency pairs.<\/li><li><strong>Open a reasonably small position<\/strong> that risks just 1-2% of your account\u2019s capital.<\/li><li><strong>Use market orders to manage your risks<\/strong>, such as stop-loss, limit and take-profit orders.<\/li><\/ul><\/div><\/div>\n\n\n\n<p>Even if you\u2019re using stop or limit orders, it\u2019s worthwhile paying attention to major news announcements so you can adjust trades on-the-go.<\/p>\n\n\n\n<p>In addition to monitoring your open position\/s, it pays to take time to review closed trades to learn why you achieved a profit or made a loss.<\/p>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Pros And Cons Of Trading Forex Currency Pairs.<\/strong><\/h2>\n\n\n\n<p>In past decades, companies were the major users of FX to hedge currency risks related to expanding their business operations in overseas markets and also to ensure they had&nbsp;foreign&nbsp;currency&nbsp;to pay globally-distributed employees.&nbsp;<\/p>\n\n\n\n<div class=\"indent-wrapper\"><div class=\"indented-text\"><span>More recently, institutional and retail investors have popularised forex trading.<\/span><\/div><\/div>\n\n\n\n<p>Once seen as merely a functional necessity for the exchange of cash, forex is now viewed as an investment asset class in its own right \u2014 with most serious traders dabbling in forex trading to some extent.<\/p>\n\n\n\n<p>Top benefits of forex trading include:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>You can increase the number, frequency and variety of your trades. <\/strong>Forex trading offers a huge range of currency pairs and lets you trade outside of regular market hours. It has low barriers to entry if you use margin trading, and offers comparatively low fees compared to other financial markets.<\/li><li><strong>You can use leverage to maximise your capital and increase profits. <\/strong>Of course, leverage is a double-edged sword where your losses are also amplified based on the inflated position size.<\/li><\/ul><\/div><\/div>\n\n\n\n<p>The main cons of trading currency pairs are:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Risk of excessive losses<\/strong> due to highly leveraged trades that can be liquidated quickly based on even small market movements.<\/li><li><strong>Inherent unpredictability<\/strong> of factors affecting currency markets.<\/li><li><strong>Difficulty of market research<\/strong>, which involves the use of advanced charting and analysis tools.<\/li><\/ul><\/div><\/div>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>What Causes FX Rates To Fluctuate?<\/strong><\/h2>\n\n\n\n<p>Broad economic and societal conditions in different countries affect exchange rates, so it\u2019s critical to stay abreast of the news, governmental policies, and financial market reporting.<\/p>\n\n\n\n<p>The kinds of events that influence the strength of a country\u2019s currency can include:<\/p>\n\n\n\n<div class=\"arrow-wrapper\"><div class=\"arrow-list\"><ul><li><strong>Political changes<\/strong>, elections, new policy directions, major scandals or significant dissent and dissatisfaction with a government among a country\u2019s constituency. For example, <a href=\"https:\/\/www.theguardian.com\/business\/2016\/jun\/23\/british-pound-given-boost-by-projected-remain-win-in-eu-referendum\" target=\"_blank\" rel=\"noreferrer noopener\">Britain\u2019s pound depreciated significantly compared to the USD<\/a> in the wake of its Brexit announcement.<\/li><li><strong>Macroeconomic data<\/strong> such as interest rate rises or falls, inflationary pressures, unemployment rates, GPD and consumer sentiment surveys. For instance, a surprise cut to interest rates by a country\u2019s central bank could trigger a decrease in its currency\u2019s value on the forex market.<\/li><\/ul><\/div><\/div>\n\n\n\n<div style=\"height:40px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Final Thoughts On Forex Trading In Australia.<\/strong><\/h2>\n\n\n\n<p>Forex is a fast-paced market that gives retail traders more opportunities to make trades and potentially generate profits.<\/p>\n\n\n\n<p>But those appealing traits must be balanced by the complexity and risk involved being able to reliably predict what to trade and when, having sound entry and exit strategies to realise profits, and strong risk management to limit your losses on leveraged positions.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-create-block-tip-block tip-wrapper\"><div class=\"row\"><div class=\"col-md-12\"><div class=\"card-wrapper\"><div class=\"card-title\"><div class=\"icon\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"20\" height=\"20\" viewBox=\"0 0 20 20\" fill=\"none\"><path fill-rule=\"evenodd\" clip-rule=\"evenodd\" d=\"M7.5 14.33a5 5 0 1 1 5 0v4.17h-5v-4.17Zm4.25-1.3-.75.44V17H9v-3.53l-.75-.44a3.5 3.5 0 1 1 3.5 0Z\" fill=\"#656E83\"><\/path><path d=\"M9.25 1v2h1.5V1h-1.5ZM5.53 4.47l-1.5-1.5-1.06 1.06 1.5 1.5 1.06-1.06ZM15.53 5.53l1.5-1.5-1.06-1.06-1.5 1.5 1.06 1.06ZM1 10.75h2v-1.5H1v1.5ZM17 10.75h2v-1.5h-2v1.5Z\" fill=\"#656E83\"><\/path><\/svg><\/div><h3 placeholder=\"Tip Title Goes Here\">Disclaimer.<\/h3><\/div><div class=\"card-content\"><p placeholder=\"Tip Content Goes Here\">The information presented here is general in nature and does not endorse any investment product, market, provider, or service. It is not intended as financial advice or a recommendation to trade &#8211; or not to trade. Trading futures, shares, ETFs, options, CFDs, and forex involves a high level of risk and may result in significant losses, particularly when leverage is used. Past performance does not guarantee future results. Before trading, consider whether the product is appropriate for your circumstances and seek independent professional advice. Refer to the relevant Product Disclosure Statement (PDS) and Target Market Determination (TMD) on the provider\u2019s website.<\/p><\/div><\/div><\/div><\/div><\/div>\n\n\n\n<div style=\"height:33px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>Jody<\/p>\n\n\n\n<div style=\"height:24px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p><span class=\"span-reading-time rt-reading-time\" style=\"display: block;\"><span class=\"rt-label rt-prefix\">Reading Time: <\/span> <span class=\"rt-time\"> 9<\/span> <span class=\"rt-label rt-postfix\">minutes<\/span><\/span>The forex market is larger, more active and more lucrative than the stock market, with a daily trading volume of<\/p>\n","protected":false},"author":14,"featured_media":93545,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_uag_custom_page_level_css":"","_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"categories":[267,304],"tags":[],"class_list":["post-92934","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money","category-start-share-trading"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What Is Forex Trading? 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Today, we\u2019ll discuss the basics of trading forex in Australia.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/arielle.com.au\/what-is-forex-trading-australia\/\" \/>\n<meta property=\"og:site_name\" content=\"Arielle Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/ArielleExecutive\/\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-06T01:16:00+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-05-04T00:14:21+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/arielle.com.au\/wp-content\/uploads\/2023\/09\/what-is-forex-trading-australia.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1536\" \/>\n\t<meta property=\"og:image:height\" content=\"864\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Jody McDonald\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Forex Trading In Australia: Beginners Guide.\" \/>\n<meta name=\"twitter:creator\" content=\"@arielleexec\" \/>\n<meta name=\"twitter:site\" content=\"@arielleexec\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Jody McDonald\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"12 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"What Is Forex Trading? 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