As far as Australia is concerned, forex trading is a relatively new field and is expanding. The Australian dollar has strengthened in value because of the exports of raw materials and minerals to emerging economies such as China. This has prompted the forex trade enthusiasts and businessmen to money on this upward movement of the currency. Forex traders in Australia work under the careful eyes of its national regulator, The Australian Securities and Investment Commission (ASIC). If you are into forex trading in Australia, it is important to choose ASIC forex brokers to partner with. This ensures both security and safety in the long run. ASIC imposes specific rules and compliance that the brokers have to follow. These rules work towards protecting the capital of the investors and ensure a safe environment in which the trader can carry on the profession unhindered.There are five important points to be kept in mind when choosing the best ASIC forex brokers. They are briefly described below.
Factor #1: Cost
The major consideration that has to be kept in mind is the cost of trading for the investor. The trader should choose a broker that offers suitable spreads and commissions as these are the areas where the cost of trading matter. If the difference between the buy and sell prices of the broker is more the broker ends up making more money. To lower costs, choose a broker that offers both: minimum spread and low value of average spread. Brokers that offer ECN, using which the traders can directly access the market prices as well as liquidity pools, offer lower spreads. Customer service commission in such a case is lower and is a function of the volume of trade. Other costs include charges for holding overnight trade positions. Some brokers charge for the trading platforms and the extra facilities and tools that are provided.
Factor #2: Trading Platform
The type of trading platform offered is another major factor that needs to be considered by the forex trader when choosing a forex broker. Some of the best and most popular trading platforms offered by ASIC forex brokers include the cTRader and Meta Trader 4 platforms. MT4 is one of the most popular and advanced trading platforms offered by most reliable brokers. It helps the trader by providing the best analytical tools, expert advisors option, live quotes, charts, data export, news feeds, etc.
The cPanel is built with speed in mind and is yet another popular trading platform. It helps ECN currency trading. Some brokers also allow access to interbank liquidity funds (for algorithmic trading) through this trading platform. The trader can choose the platform that suits their trading style. Here is also another set of ASIC forex brokers that offer their own proprietary trading platforms. The trader can choose any of these provided the broker’s spread is low. It is wise to choose the platform that is suggested by the broker after due research done by the trader.
Factor #3: Speed
A common factor that all the leading ASIC forex brokers have is a technologically advanced trading platform that allows for speedy execution of the trades. Brokers achieve high speed in one of the following two methods: hiring third party servers or use their own high speed servers. Many reliable forex brokers in Australia make the use of servers provided by offshore companies to help the forex traders. These are almost always located closer to exchanges. The proximity helps speedy data exchanges and access to a high amount of liquidity. However, some of the largest and most flourishing brokers use their own high speed servers.
Factor #4: Regulation
For forex traders in Australia, it is important that they check if the broker is regulated by ASIC. They are required to be licensed by Australian Financial Services (AFS) License. This is a clear indication that the broker is rule compliant is allowed to trade in Australia. They are required to maintain separate accounts of the clients’ deposits and are subject to regular audits. This makes a safe environment for the forex trader to trade in.
Factor #5: Features
It is important to choose a broker that offers unique features such as guaranteed stop losses (the traders will not lose more money than a predefined amount), no negative balance guarantee (the traders cannot lose more money than they have deposited), fixed spreads (the traders know the costs upfront), required level of leverage, premium training and education material and a good customer support department.