Forex Investing Australia – Investing in Forex Beginner’s Guide 2021

Fact Checked by Gary McFarlane

Forex investing, or Foreign exchange and FX is the biggest financial market that facilitates the trading of all the world’s currencies. By reading this article, you’ll learn about the key benefits of forex trading, such as market hours, liquidity, and the option to trade on margin, 

Investing in forex has never been easier. With trading apps and copy trading, you can trade forex without breaking a sweat.

#1 Broker for Forex Investing Australia – eToro

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Forex Investing Australia – Step-by-Step Guide 2021

When compared to other markets such as equities or indices, many traders are lured to forex because of the market’s volatility and extended trading hours. 

According to Statista.com, the 24-hour trading volume was about six billion US dollars for the USD fiat currency. This figure is three times greater than for the euro. These figures show that the demand for USD currency far outweighs that of other fiat currencies. 

If you want to invest in forex we recommend opening an account with a trusted forex broker such as eToro. With low spreads, copy trading tools, and a user-friendly interface, eToro is ideal for beginner forex traders. 

  • Step 1: Create an eToro brokerage account by tapping on ‘Join Now’ from the eToro website. Choose a username and password and provide a valid email address.
  • Step 2: Verify your Account – Verify your eToro account by uploading a copy of your passport or driver’s license as well as proof of address (a copy of a bank statement or utility bill).
  • Step 3: Make a $50 minimum deposit via a credit/debit card, a bank transfer, or an e-wallet.
  • Step 4: Investing in Forex  – Click ‘Trade’ after searching for the currency pair you want to invest in. Click ‘Open Trade’ after entering the amount you want to invest to participate in the forex market.

If you’re looking for the best trading platforms Australia, be sure to also read our comprehensive guide for everything you need to know. 

Best Place to Start Investing in Forex – Best Forex Brokers Australia

Whether you want to buy cryptocurrency in Australia, or if you’re looking for the best shares to buy you’ll need to choose a top-rated trading platform that offers everything you need. 

Here at EconomyWatch.com we’ve researched and pinpointed the best global forex brokers you can use in 2021. eToro, AvaTrade, and Capital.com are three fully regulated, trusted, and low-cost forex trading platforms. 

1. eToro – Best Forex Broker with Tight Spreads and Copy Trading Tools

Forex Investing Australia with eToro

eToroeToro is one of the leading brokers for passive investing in Australia. Launched in 2006, eToro now boasts a client base of over 20 million traders worldwide. Alongside its growing popularity, this social trading platform is regulated by a whole host of top-tier financial regulators. These include the UK’s FCA, ASIC, and CySEC. With such high levels of regulations, it’s clear to see why so many people trust this broker. 

Assets

Forex investing - eToro's low spreads

Tradable assets – In terms of currency trading, there are 49 currency pairs to choose from covering majors, minors, and exotics. As well as being a forex broker, eToro is also known for supporting CFD trading. CFD trading doesn’t involve ownership of real assets and instead incurs tight spreads and overnight financing fees. Users also have access to real stocks and ETFs, making it one of the best ETF trading platforms in Australia.

Fees

Fees – eToro is a discount broker. This means when you trade stocks and ETFs you’ll pay 0% commission. When it comes to forex trading, you’ll incur competitive market spreads and overnight fees. Non-trading fees are also on the cheaper side of the spectrum with no account or deposit fees to worry about. 

Payments

Payments – eToro supports a wide range of payment methods including debit cards, credit cards, e-wallets, and bank transfers. The minimum deposit is just $50. 

Fee Type Fee Amount
Commission 0% on Stocks and ETFs
Spread Fee Variable low spreads
Deposit Fee $0
Withdrawal Fee $5
Inactivity Fee $10 after 1 Year
Account Fee None
EUR/USD Spread 1 Pip

Pros

Cons

  • $5 withdrawal fee

68% of retail investor accounts lose money when trading CFDs with this provider.

2. AvaTrade – Best CFD Broker for Investing in Forex 

Forex investing with AvaTrade

AvaTrade, an international CFD and forex broker, was founded in 2006, and is regulated by many financial institutions. These including the Central Bank of Ireland and the Australian Securities and Investments Commission (ASIC).

Account creation is simple and entirely digital. AvaTrade offers a variety of deposit and withdrawal options, all of which are free of charge. It also offers a variety of easy-to-use research and educational tools.

Assets

Forex Investing EUR/USD chart AvaTrade

Tradable assets – In terms of currency trading, there are 55 currency pairs available including major, minor, and exotic pairs. AvaTrade also offers CFD trading, including ETF CFDs, stock CFDs, commodity CFDs, and cryptocurrencies. 

Forex investing - forex fees with AvaTrade

Fees

Fees – AvaTrade doesn’t charge any commissions as all fees are built into the spreads. AvaTrade charges a variety of non-trading fees. The broker does not charge account fees, and deposits and withdrawals are also free.

On the negative side, AvaTrade charges a $50 per quarter inactivity fee after three consecutive months of inactivity. In addition, after 12 months of non-use, an annual administration fee of $100 will be deducted. When these inactivity-related fees are totaled, they are high in comparison to other trading platforms.

Payments

With an AvaTrade account, you can pick from five base currencies including AUD, USD, EUR, GBP, and CHF. AvaTrade does not charge any deposit fees. In addition to depositing via bank transfer or credit/debit card, you can also use electronic wallets such as Neteller and POLi. The minimum deposit is just 100 AUD. 

Fee Type Fee Amount
Commission Fee 0%
Spread Fee Low spreads
Deposit Fee $0
Withdrawal Fee $0
Inactivity Fee $50 per quarter after 3 months
Account fee None
EUR/USD Spread 0.9 Pips

Pros

  • Tight forex spreads
  • One of the best MT4 Trading Platforms Australia
  • Heavily regulated by ASIC and other financial authorities
  • Low non-trading fees
  • Variety of automated trading solutions available, such as Trading Central

Cons

  • High inactivity fees

71% of retail investor accounts lose money when trading CFDs with this provider.

3. Capital.com – Low-Cost CFD Broker for Investing in Forex 

Capital.comCapital.com is a global CFD and forex broker that debuted in 2016. It is regulated by the UK Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), the Australian Securities and Investments Commission (ASIC), and the National Bank of the Republic of Belarus (NBRB).

Assets

Forex investing with Capital.com

When it comes to investing in forex with Capital.com you’ll be spoilt for choice. This is because there are 140 currency pairs to buy and sell. You’ll also have access to a range of CFDs from stock CFDs and ETF CFDs to commodity CFDs and stock index CFDs.

Fees

Capital.com has competitive CFD and forex fees. FCA and CySEC traders also have access to commission-free real stocks covering 7 international stock markets. In terms of non-trading fees, there are no deposit fees, withdrawal fees, inactivity fees, and account fees. 

The only fees you will have to pay are the bid-ask spreads and overnight financing fees if you keep positions open after standard market hours.  

Payments

There are five account base currencies to choose from including GBP, AUD, EUR, PLN, and USD. This is great because it means you’ll be able to avoid paying a conversion fee. 

For example, if you buy and sell stocks and forex pairs in the same currency as your brokerage account base currency, you won’t have to pay a conversion fee. 

Capital.com doesn’t charge deposit fees. As well as bank transfers and credit/debit cards, you can use e-wallets like Apple Pay to fund your trading account. 

Fee Type Fee Amount
Commission Fee 0%
Spread Fee Competitive Spreads
Deposit Fee $0
Withdrawal Fee $0
Inactivity Fee $0
Account fee None
Cost of investing in EUR/USD Spread: 0.00006

Pros

  • Low forex and CFD fees
  • Seamless onboarding process
  • Great customer support
  • Useful demo account
  • Cutting-edge mobile app

Cons

  • Cannot set price alerts on web trading platform

76.72% of retail investor accounts lose money when trading spread bets and/or CFDs with this provider. 

Forex Investing in Australia – Comparing Forex Brokers

Broker Commission Deposit Fee Withdrawal Fee Inactivity Fee Cost of investing in GBP/USD
eToro 0% $0 $5 $10 monthly after 12 months 2 Pips
AvaTrade 0% $0 $0 $50 per quarter after 3 months 1.6 Pips
Capital.com 0% $0 $0 None 0.00013 Pips

Forex Investing – What are the Risks? 

Forex market volatility can provide plenty of opportunities to speculate on price fluctuations. But, there’s always the high risk that your investment won’t work in your favor, resulting in a loss.

Losses are part of the among forex traders, even among the most experienced, and knowing and managing risk is the key to becoming a successful forex trader.

Most forex traders experience losses, even the most seasoned experts. Recognizing and mitigating those risks is what it takes to become a successful forex trader. 

Managing your forex trading risks

At EconomyWatch.com, we crunch complex financial topics helping you to manage and understand those risks. 

  • By reading educational guides such as this, you’ll develop your knowledge and understanding of speculative and leveraged forex investing. 
  • Using real-time economic calendars is another great way to see how major market-influencing events around the world could shape your future forex trades. 
  • Placing stop-loss orders helps hedge against substantial losses. 

When investing in forex there are two key risks you need to take into account: 

Leverage

When you trade forex using margin (leverage) you’ll only have to deposit a fraction of the total value of the position. This means, with a smaller initial margin you’ll gain exposure to a larger position. As such, if the price movements shift in your favor your potential profits will be amplified. But, if the market moves in the opposite direction to your speculations, you could stand at even bigger losses. 

Volatile market conditions

Forex rates are easily swayed by real-time economic and political events. This provides short-term investors and day traders with the perfect playing field to capitalize on sudden price movements. 

Nevertheless, volatility can be a blessing and a curse, with losses piling up just as fast. 

Forex Investing with eToro – Easy Guide

Investing in forex doesn’t have to be a complicated task. Provided that you only invest money you can afford to lose, here’s what you need to know about forex investing with eToro

Step 1: Open an account with eToro

To open a new trading account with eToro, go to the official website and click on ‘Join Now.’ Create a username and password for your brokerage account and enter some personal information.

eToro open an account

68% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Verify your account

eToro verification

Verifying your account is easy. Upload copies of your passport and a recent utility bill and you’re set. The KYC process is fully-digital and takes a matter of minutes to complete. 

Step 3: Fund your account

Funding your trading account is straightforward. You can deposit funds using a variety of payment methods, including debit/credit cards, bank transfers, and e-wallets.

eToro fund account

There are also no deposit fees to pay, and the minimum deposit is just $50.

Step 4: Investing in Forex 

You can find specific currency pairs using the search bar. Alternatively, you can browse through the supported FX pairs by tapping on ‘Discover’ and then ‘Currencies’. For the sake of this guide, we’re looking to invest in the EUR/USD forex pair. 

Search EUR/USD with eToro

Once you’ve clicked on ‘Trade’ next to the relevant result you’ll gain access to the trade ticket window. 

From here you can set the amount you want to invest, as well as how much leverage you want to use. In terms of risk management, you can place stop-loss and take-profit orders with ease. When you’re happy with your choices, simply tap on ‘Open Trade’ to open the position. 

Open trade EUR/USD with eToro - Forex Investing

It’s worth noting that you can either set a market order or you can trade in real-time. If you set a market order, your position will only be opened if the market price matches your set target price.  

Forex Investing – Conclusion

Currencies with the highest trading volumes come from some of the largest economies in the world. The forex market is the biggest and most liquid financial market out there. As a post-pandemic recovery begins to manifest itself, forex traders are looking for the best major currencies to buy and sell. 

The EUR/USD, USD/JPY, and GBP/USD are just some of the most popular forex pairs. If you’re new to all this and want to start trading forex easily and passively, we’d recommend opting for eToro. This copy trading platform has low fees, great customer service, and is fully regulated by ASIC. 

eToro – Best Forex Broker with Low Spreads and Copy Trading Tools

eToro

68% of retail investor accounts lose money when trading CFDs with this provider.

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About Dassos Troullides PRO INVESTOR

Dassos Troullides is an experienced finance writer who specializes in CFD, stock, forex, and crypto trading. He uses his experience and time spent in the forex industry to simplify complex financial topics for easy, informative reading. Dassos also writes for TradingPlatforms.com, BuyShares.co.uk, LearnBonds.com, InsideBitcoins.com and ForexCrunch.com