Tips for finding Forex brokers in Australia

Unlike stocks, Forex is a decentralized market and this means that different brokers may offer slightly differing rates for the same ...

Unlike stocks, Forex is a decentralized market and this means that different brokers may offer slightly differing rates for the same currency pair. Because of this, a lot of traders – especially beginners think that their brokers are ripping them off. While the likelihood of being scammed in the Forex market is higher than in stocks, there are a number of legitimate Forex brokers out there which you can actually trade profitably from.

Now when you start looking for a Forex broker in Australia, you’ll find numerous choices around the Internet that it can be confusing which ones are legitimate. To avoid the unnecessary headaches as you choose for a Forex broker, here are some things you should look for:

Is it Regulated?

Regulated Forex brokers are those that are registered with an authority body which supervise the activities of member brokers and ensure that they operate ethically and legally. Regulated brokers strictly adhere to a set of guidelines in order to stay regulated. So dealing with this kind of broker will give you the peace of mind, knowing that you’re not dealing with an unscrupulous company.

You can find out if a Forex broker is regulated by visiting their website. Most regulated brokers have official websites where they provide details of their membership in a regional regulatory body. Alternatively, you can go directly to the regulator’s website instead and find out if the Forex broker you are looking at is included in their list.

Does It offer Direct market Access and Straight Through Processing?

Direct market access means instant execution of your trades. This is important considering how volatile the Forex market is. A direct market access removes the likelihood of costly rejections and re quotes which can either make or break your profits.

Straight Through Processing (STP) brokers are what traders refer to brokers that forward the orders of their clients directly to their liquidity providers who have access to the Interbank Forex market.  This is another way of saying that your broker is not a market maker and just as important - doesn’t ever take the opposite side of your trades.

Does it Offer Competitive Fixed Spreads?

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The spread is basically the difference between the ask price and bid price. While most Australian Forex brokers do not charge any fee for the use of their trading platforms, they make money through the spread. When choosing a Forex brokers in Australia, you’ll want to opt for one that has fixed spreads. This is because fixed spreads are transparent and easier to use for news trading as compared to variable spreads. If you would be using Forex robots, a fixed spread is also ideal as Forex robots in the market today cannot use floating spreads and this can consequently end up in huge losses
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