Forex trading Australia?

I've never really looked into trading Forex but now I'm giving it considerable thought.
There's a million and one videos and articles on the web talking about forex trading.. Every second trader on the web claims to be trading forex. As I am clueless about this topic, would somebody be able to clarify a few things for me.

1 - Why is Forex trading so popular? I'm amazed that there are so many people forex trading.
Is it because of the 24hour markets?

2- How do you go about trading Forex in Australia? Do you only have access to forex via CFD's or is there another way to trade foreign currencies.. I've never seen any mention of forex trading on brokers websites.

3 - Is Forex trading worth looking at? I'll eventually like to try it after considerable learning, but I'm just clueless on how to go about it.

Thanks.
Any assistance on this will clear up allot of my personal misconceptions about forex trading.

1. FX trading is popular because of many reasons.
- available 24hr/5days, this means it's available after your day job
- plenty of FX providers with easy to use trading platforms
- plenty of markets that now include equity indicies, gold, silver, oil and many other commodity markets.
- low to nil transaction costs
- plenty of leverage, this allows one to start trading with only a few hundred $$$

Leverage is the main reason for FX popularity. Small price movements (in % terms) can be significantly magnified with leverage.

2. There are plenty of providers in Aust and around the world. Unfortunately FX markets are not regulated by an exchange. FX prices are provided by a small number of large banks and passed through to the plethora of providers. FX providers may or may not be licensed by a country's financial regulator. They may or may not be a licensed equity or futures broker. There are many, many unscrupulous FX providers out there waiting to get your money.

3. No one can answer that for you. FX is another financial market that participants may use to diversify their trading or investment activity. Education about FX trading can be cheap or expensive. 80-90% of FX traders lose money.

Dominover said:

Is Forex trading worth looking at?

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Hi @Dominover ...... @peter2 has given a good overview and his comment

peter2 said:

80-90% of FX traders lose money.

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should not be discounted.

No trading advice from me, but you should consider your own trading history? If you are an experienced trader, you may well transition to FX well, but if inexperienced .... definitely open a Demo account and trade that for 6 months before you do anything else! Cheers.

it's also well known because of a number of 'rags to riches' claims, fraudsters, trading bots ("Equity Advisors"), etc. Some people are legitimate 'rags to riches', others just claim to be to peddle their systems or trading academy.

Because of the leverage some people have turned $10,000 into millions. A number of other people have blown up account after account.

A bonus of FX is also the liquidity makes it easy to upsize your position. That is, $1,000,000 position in FX is nothing but that is a lot different in the ASX.

I've tried a demo account a few times and haven't gotten too far. It is very different to equities IMO.

Good luck.

Thanks for the answers. I hear rags to riches stories about anything to do with trading but I don't believe it. I have always wondered why it's so popular and I think peter2 has answered this.

peter2 said:

3. No one can answer that for you. FX is another financial market that participants may use to diversify their trading or investment activity. Education about FX trading can be cheap or expensive. 80-90% of FX traders lose money.

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I was never asking for financial advice, but what I meant by my third question is whether or not for example (and this is just an example), trading currencies requires huge amounts of capital (which I now know it doesn't), or any other quirks which make it not worth pursuing. My own research and application will be the ultimate decider.

barney said:

No trading advice from me, but you should consider your own trading history?

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Again, not asking for trading advice, just wanted to hear whether or not there's something about currency trading which makes it something not worth the effort, as mentioned above. For example, someone might point out the barriers to entry are high(high minimums), maybe the brokers charge allot... As per peter's answers, i now know that's not true. It's just a hypothetical example.

Thanks for clearing up some of these area's for me.

The attraction of FX is the leverage available, if you were to actually put in the $100k and buy and hold unless you catch a trend it does not move that much.

In FX a big news event can spike the pair 200 pips in a second but in reality that may be 1% of the total price.

It is the leverage that exposes you to the profits and losses and it is this which can also cook your goose

If a 911 event hits, you are exposed to all soughts of losses, you may think you have a stop but it will gap straight through that and when it pauses that is when you will be closed out.

Like most things it does tend to overdo things until someone stops it, which means you are closed out at the probable low.

A typical news day in the USA will spike a price 100 in one direction and 200 in the opposite all in 5 minutes.

Remember the big dealers can see all of the market depth, they know where all the stops are going to be eg big round numbers, BB on the hourly chart, old S/R swing points etc etc.

the market loves newbies, fresh meat

macca said:

The attraction of FX is the leverage available, if you were to actually put in the $100k and buy and hold unless you catch a trend it does not move that much.

In FX a big news event can spike the pair 200 pips in a second but in reality that may be 1% of the total price.

It is the leverage that exposes you to the profits and losses and it is this which can also cook your goose

If a 911 event hits, you are exposed to all soughts of losses, you may think you have a stop but it will gap straight through that and when it pauses that is when you will be closed out.

Like most things it does tend to overdo things until someone stops it, which means you are closed out at the probable low.

A typical news day in the USA will spike a price 100 in one direction and 200 in the opposite all in 5 minutes.

Remember the big dealers can see all of the market depth, they know where all the stops are going to be eg big round numbers, BB on the hourly chart, old S/R swing points etc etc.

the market loves newbies, fresh meat

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Thanks for this! It's these sorts of details I would have probably found out too late. It sounds like a tough market to trade. I'll certainly keep this in mind before making any trades.

I have been trading the FX markets since 2003. This remains my favourite market to trade along with indices and various commodities.
I trade these on a technical level with systems I have created via trial and error over the years. It was not always plain sailing especially in the early years when I almost obliterated 3 different accounts.
Most people that trade FX will lose.... period. My broker Oanda openly says 76% of it's clients will lose money. Most of these are newbies that just give up.
The ones that persevere and finally it gets drummed into them what it takes to be succesfull namely excellent money management, the right mindset (85% of the equation) and and a system that has been proven to succeed over time in the long game.
Currencies are different to stocks, I prefer them more due to their cyclic nature and characteristics of reversion to a mean although I am generally a trend trader. So for me it was easy, as I am crap at stock picking and fundamentals and generally stear clear of them so focus on the 24hr markets...

Another prime reason why a lot of traders fail at these markets is because they set their stop loss too close to the market action and they end up with a string of stop outs. Trades need room to breathe and a good placement of a strategic stop is critical.

Dominover said:

It sounds like a tough market to trade.

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Its definitely a difficult market to make consistent profits from (in my experience), but from an accessibility point of view its the easiest market to trade.

Those two things combined are why there is a large trail of aspiring punters left licking their wounds after trying to trade FX.

All the answers you seek will most likely be found by opening a Demo MT4 account and trading it like it's your own money. If you can make consistent profits without taking inappropriate amounts of risk, you will be heading in the right direction. Good luck with it.

gartley said:

in the early years when I almost obliterated 3 different accounts.

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Only 3 ... and only almost You got off lightly

I've also found it very hard to backtest a strategy on FX markets. A few different platforms had the ability to have a mechanical system, but I can't program in C/C#. I've also seen code for mt4/mt5 which looks overly complicated and the systems on offer are likely curve fitted.

If I had a more viable way to backtest a mechanical system I'd probably put in a bit and try it out.

and as you say, @gartley, it is different to stocks. The simple systems I have that test well in stocks do fail miserably with FX.

One day maybe.

I don't have the programming ability either.
I do everything manually on indicators I created in excel. Only use trading platforms for downloading raw data.
I find out what I want to trade on the weekends by narrowing down a group of the majors and some crosses that meet the system criteria I have ( part of which I have shown across a few threads).
I try and take most trades early in the week because that's when I find I am most focused and at my best. This week there are so many trades to pick from.
Try to stay clear if the news and announcements.

barney said:

Those two things combined are why there is a large trail of aspiring punters left licking their wounds after trying to trade FX.

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Very good point. That really answers a long running question from me surrounding why there seems to be so many currency traders.

I was doing some manual testing and it went ok. Though I ended up giving back most of the open profits. Was a simple MA crossover and I caught on the beginning of a big trend in a few majors. I would still feel better if I could backtest a system more accurately. A number of systems I have seen described for FX also appear to be far more complicated compared to stocks IMO (though that could just be because I am used to stocks more than FX).

Of course CME also offer currency futures (on major currencies against USD).
Which have the advantage of being traded on an exchange, if that is something you prefer.

Big story coming out of the US is a leaked investigation by US Treasury of Banks allowing trillions of dollars to be laundered around the world.

The processes are used to support everything from tax evasion and tax fraud, international arms deals, drug cartels and a plethora of company scammers.

There is a significant Australian connection in the report. A Queensland guy specialized in setting up and selling shell companies which were the used by scammers confident that they would not be traceable.

Check out the story and keep a note of the companies identified as suspect. Might save a bit of grief. Of particular concern is Advanced Global Markets Ltd. Do your own research

The FinCEN files: Dirty little secrets of the world's banks revealed in mass US government leak

Ian Taylor sells high-end jet skis from his four-bedroom waterfront townhouse in a quiet suburban cul-de-sac on the Gold Coast.

Key points:

• A leak of highly secretive US Treasury documents reveals the world's banks alerted watchdogs to about $US2 trillion ($2.7 trillion) worth of suspicious transactions in seven years
• The documents were obtained by Buzzfeed News and shared with the International Consortium of Investigative Journalists
• Ian Taylor is just one of the Australians mentioned by name in the leaked suspicious activity reports

What the 43-year-old does not advertise is that his other source of income has come from setting up shell companies, which have been used by money launderers, arms dealers and Mexican drug cartels.

His business allowed customers to hide their true identity by providing nominee directors and shareholders to obscure who was really behind the shell company.

....Shell companies sold 'like hotdogs'

Despite regulations being tightened, another New Zealand company linked to Mr Taylor has been running a foreign-exchange scam, taking millions of dollars from investors around the world.




.
"The director appeared to be nothing more than a nominee — a person whose name would appear on the directorship in return for a fee," says private investigator Ken Gamble, who was hired by a Portuguese man who lost more than 3 million euros ($4.9 million).

"One would ask, 'Why is [Taya Burnett] on that company and what's she doing there?'" Mr Gamble says.

"And why is she still the director after the company has been involved in a very serious crime?"

"How can somebody be allowed to set up shell companies and sell them like hotdogs out of a stand at the back of a rock concert and yet not have responsibility for what those companies do?"

Mr Taylor was banned from being a director in the UK in 2015, after one of his companies was involved in a 3.2-million-pound ($5.7 million) land-sales scam where many investors lost their money.
Top

In a phone call with the ABC, Mr Taylor declined to be interviewed but said he was no longer involved with shell companies and he was not aware his wife was the director of Advanced Global Markets Limited. Ms Burnett did not respond to questions.

https://www.abc.net.au/news/2020-09...al-international-banks-dirty-secrets/12673318


The FinCEN files: The world's banks' dirty little secrets revealed in mass US government leak

Hi Dominover, I use Pepperstone and have been able to withdraw my Capital with no problem so far. Try Demo account and see if it is something that resonates with you.

This story of a scam reinforces the fact that far too many Trading Options pitches are just scams.
Anyone here know someone who got caught with Options Rider ?


Commonwealth Bank and St George held accounts for Options Rider investor scam, FinCEN files show

A friend recommended Carmelita Roque invest her savings in Options Rider.

Options Rider's use of Australian banks gave the US Army officer comfort her money was safe.

"Seeing the money that I would be wiring would be going to a country like Australia, in my mind that was convincing enough that that company was legitimate," Ms Roque said.

She deposited thousands of dollars into Options Rider's Australian bank account and watched it grow to nearly $100,000 on its online platform.

Then the website stopped loading — it was a scam ripping off thousands of investors around the world to the tune of at least $8 million in one year.

Dominover said:

I've never really looked into trading Forex but now I'm giving it considerable thought.
There's a million and one videos and articles on the web talking about forex trading.. Every second trader on the web claims to be trading forex. As I am clueless about this topic, would somebody be able to clarify a few things for me.

1 - Why is Forex trading so popular? I'm amazed that there are so many people forex trading.
Is it because of the 24hour markets?

2- How do you go about trading Forex in Australia? Do you only have access to forex via CFD's or is there another way to trade foreign currencies.. I've never seen any mention of forex trading on brokers websites.

3 - Is Forex trading worth looking at? I'll eventually like to try it after considerable learning, but I'm just clueless on how to go about it.

Thanks.
Any assistance on this will clear up allot of my personal misconceptions about forex trading.

Click to expand...

Hi if you need a good Forex trading platform have a look in to IG Markets. I trade stock indices with using CFD had no issues so far.
I'm pretty sure they have Forex as well. Do your own research.

I just came across your post. To be honest, I have the same questions. I began researching this topic after I received a couple of calls offering me to start making money on Forex.