This article is about the factors to consider before you open a live trading account with Australian forex brokers.
As in every other market, there are many Australian forex brokers to choose from. Before you make a final decision about a forex broker, you should bear in mind certain factors to aid in your decision.
Prior to opening a live account with a forex broker, you should ensure that it is registered with the regulatory body in the country where it is based. In Australia, the Australian Securities and Investments Commission is the regulatory body. The registration information regarding the forex broker should be available on its website.
You will be offered a certain level of leverage when you open a trading account with a broker. This allows the broker some say in the level of risk you are allowed to take as you are trading with money borrowed from the broker. This gives the broker the right to terminate your trades as they deem fit. This could be bad for your trading.
You should determine the margin rules of your forex broker before you commit to a live trading account. You may have to sign an agreement stating that due to you trading with borrowed money, the broker has the right to meddle with your trades.
Brokers normally offer a few different types of accounts. The smallest one is called a micro account, but not many brokers offer this type of account. You can opt for a mini account or a standard account. Some brokers offer a premium account which will normally require a much higher initial capital investment. However, you will be offered additional services and tools. You should be sure of your trading plan and strategy before you decide on the type of account you wish to open. You should bear in mind that the type of account you are offered will be dependent upon the amount of capital investment funds you have available.
The spreads your Australian forex brokers charge is the variance between the price of purchase and the price of sale of your currency pairs. This is the method in which they earn income as they do not charge commissions. The variance in spreads between forex brokers is as wide as the commission differences in the stock market.
Australian Forex Brokers’ Trading Platform
Your forex broker will offer you a trading platform to use for placing and monitoring your trades. You should ensure that you are comfortable using this trading platform and that it suits your trading strategy. You should check to see which reports are available to you. The services offered by your broker should include real-time charts, tools for analysis of the charts, real-time data and news, along with support for the trading platform.
Before you start trading live with your broker, you should open a demo account. This will allow you to test the trading platform and determine if it is suitable for your trading strategy and trading plan. Ensure that the broker of your choice offers the currency pairs you require. The most important factor when you choose a forex broker is to ensure that you will be offered the services that will make your trading career effective.