The forex Australia industry is growing in leaps and bounds. This is evident through the number of new accounts being created daily. What do you need to know about the industry? Read to find out.
Opening a Forex Australia Account
To open a forex Australia account, the customer has to first of all sign up with a forex broker. There are a few indigenous brokers and there are foreign brokers with offices scattered around the major Australian cities. You can sign up with any of them via their web sites, or by going to their offices directly.
You will be requested to fill forms that will cover your personal details, financial details, etc. You will equally be asked to bring photographic ID and proof of address. These will be used to verify your identity and the address you provided. Some brokers will not allow you fund your account until these details are verified. You will be allowed to open Australian dollar based accounts but you can also decide to have the account denominated in any of the other major currencies; USD GBP EUR etc.
Types of Trading
There are different ways in which one can invest in the forex Australia market. Firstly, there is traditional forex trading where traders enter and exit positions, and profits and losses are counted based on the number of points moved by the instrument in favour of the trader or against him. With this type of trading, the trader has the option of trading long term, mid term or trading short term- without any restrictions.
The second method traders can use to make money off the forex markets is by trading binary options. In this style of trading, the individual will be focused on trying to predict where the market will be at a future time. The duration of the trades could be 1 minute or 1 week depending on what the broker is offering. The brokers offering binary options accounts are different from those offering standard forex accounts.
Potential pitfalls you should be aware of
First and foremost, you need to know that trading is high-risk. It is a speculative market that is influenced by trader sentiment and economic fundamentals (to a lesser extent). Therefore, it is important for you to not invest money that you cannot afford to lose – especially if you are still new to trading.
Secondly, all income you make from trading the market will be taxed, so you need to talk with your tax office to fully understand what this means for you. Ensure you understand the full scope of your taxation responsibilities.
Beware of trying to trade this market with the same strategies as individuals who are living in time zones outside of Australia. Most of the time, they are almost impossible to practice, even for full time traders. Your time zone will make certain strategies better than others. You probably don’t want to be up all night every night.
Having said all this, the forex Australia industry is a fantastic place to make money f you can understand and manage risk, and take a long term continuous improvement approach to your career.