6 Best ASIC-Regulated Forex Brokers for 2024

List of Top ASIC-Regulated Forex and CFD Brokers

ASIC: Regulating Australia’s Financial Sector

The Australian Securities and Investments Commission (ASIC) plays a critical role in regulating financial services in Australia, with a specific focus on forex and CFD markets. It licenses and monitors financial service providers, including forex and CFD brokers, ensuring compliance with financial regulations and protecting consumers from fraud.

ASIC-regulated derivatives brokers are required to provide segregated funds, negative balance protection, and cap the maximum retail leverage at 1:30. These safety mechanisms reduce the overall trading risk and enable traders to exploit different opportunities in the market.

How Did FX Empire Select the Best ASIC-Regulated Forex Brokers?

• Transparency. Beyond just looking for the brokers licensed by ASIC, we prioritized those demonstrating high transparency. Our top picks offer easily accessible, detailed documents on their websites, where traders can read about trading conditions, execution standards, and more.
• Convenience. We only considered brokers that accept payments in AUD and support AUD as a base currency.
• Choice of Australian CFD shares. We looked for a broad range of instruments, such as share CFDs of Australian companies, to be traded during the Asian trading session. This is important as it gives traders in Australia greater freedom to trade while the other markets are closed.
• Competitive pricing. Our picks for each category offer some of the lowest fees in the industry. When estimating the competitiveness of a broker’s pricing mechanism, we evaluate its spreads, commissions, swaps, and more.
• User-friendly and feature-rich platforms. To ensure a broker delivers the best user experience, we only consider those offering user-friendly platforms that facilitate in-depth technical analysis and are supported by sophisticated tools.
• Diverse account types. Traders have different strategies, which is why they need to be afforded the greatest possible freedom to trade on inherently different market opportunities. That is why we selected brokers offering a wide range of accounts catering to different types of traders.
• Range of markets. We look at how many instruments and from which asset classes are offered by a broker. If a broker offers more than one contract type (CFDs, options, futures, etc.) for the most popular markets, such as FX pairs, commodities, shares, and indices, we consider this an advantage.
• Robust supporting content. Finally, we look into a broker’s research and educational content. We are interested in whether a broker affords a nuanced overview of current market developments, including where the market is headed and why. We also focus on the scope and applicability of the available educational content.

Our team of experts has identified each broker’s strengths and weaknesses using FX Empire’s comprehensive methodology. You can read more about it and how we conduct our tests here.

Now let’s dive into the selected brokers.

How to Choose an ASIC-Regulated Forex Broker?

Now that I have covered our top picks for each category, it is time to outline the specific considerations traders need to make when looking for a trustworthy partner:

What Key Safeguards Should You Be Aware Of?

I have broken down the most important safety mechanisms mandated by ASIC:

• Segregation of client funds. Brokers must keep their clients’ funds in separate bank accounts from the ones used for their corporate capital. This is crucial for mitigating the risk of accounting errors.
• Negative balance protection. Negative balance protection means that a trader’s losses cannot exceed their account balance. This protection is indispensable when trading high-risk instruments, such as Contracts for Difference (CFDs).
• Limited market exposure. Beginners are especially susceptible to the risk of adverse price fluctuations, which is why the maximum leverage for retail traders is capped at 1:30. Anything beyond that can be too risky for inexperienced traders.

Read more about Best regulated forex brokers.

How to Verify if a Broker is Regulated?

You can do several things to verify if a broker is regulated. When you open a broker’s website, scroll down to the bottom of the page to see the entity’s legal name. This is where it is stated who the regulator is. You need to look for a reference/licensing number, which you can then use to verify the entity by going to the regulator’s own website and checking its registry of authorized entities. You can check the registry of ASIC-regulated brokers here.

Here is our selection of Best forex brokers in Australia.

How to Measure the Competitiveness of a Broker’s Fees?

A broker may offer one, two, or several account types, each with its unique pricing mechanism. The question is, how to know which one is most suitable for your particular trading style? I will try to answer this question by providing an example with two distinct accounts, an STP and an ECN:

The biggest difference between STP and ECN accounts, apart from the execution model, is the pricing mechanism. Usually, STP accounts afford commission-free trading and floating spreads, whereas ECN accounts have fixed commissions and raw spreads (typically starting from 0.1 pips). At first glance, the former sounds more favorable because you only have to pay one cost – the spread – rather than two.

Read more about Best STP forex brokers and Best ECN forex brokers.

Many brokers recognize the psychological significance of this sort of thinking and seek to exploit it by raising the spreads on their STP accounts to the point where they no longer represent the more competitive option. I will now demonstrate how to do a quick test for yourself to evaluate the competitiveness of a broker’s ECN and STP accounts.

Pick an instrument, say, the EURUSD. Assume that the spread on this pair is 0.9 pips on a broker’s STP account and 0.1 pips on its ECN account. Also, there is a $6 commission for trading a 1 lot (100,000 units) contract. If the EURUSD pip value is $10, you can perform a simple calculation to determine the value of a hypothetical position on the EURUSD executed on both account types. The formula is the value of a trade = (spread x pip value) + commission. When we pop in the above values, here’s what we discover about our hypothetical broker:

This is just a hypothetical example, but hopefully, it illustrates how “more” can sometimes be “less” in trading. Thus, it’s worthwhile to evaluate the costs of a broker you consider opening an account with, before doing so. And if you are still uncertain, you can always check out our database of reviews to identify the most competitive brokers.

Discover Best lowest spread forex brokers.

What to Look for in a Trading Platform?

A trading platform is your window into the market. It allows you to observe price action behavior and study potential opportunities for placing orders. Technical traders use the platform’s array of indicators, drawing tools, and other features to examine various price patterns, changes in volatility, liquidity, and so on in order to gauge the most favorable times to enter or exit the market.

The best platforms are also the most versatile ones. They include a wide spectrum of technical indicators, such as Fibonacci retracement levels, oscillators, trend-based and range-based indicators, and others, as well as drawing tools, such as trend lines, channels, wedges, etc. They are also the ones that allow you to easily scale price action up and down.

Check out our guide on Best forex trading platforms.

In addition to these components, when looking for a suitable platform, you must also look for efficiency. Ask yourself: Does the platform facilitate easy and rapid order placement through one-click trading? Does it support algorithmic trading via Expert Advisors (EAs)? Can it handle market, limit, and stop orders? These factors, and more, contribute to a platform’s overall effectiveness.

The two most popular retail platforms in the industry are MetaTrader 4&5. Over the years, both of them have become the benchmark for simplicity and reliability. The two entries in the popular franchise have a decent range of technical indicators and drawing tools and afford multi-timeframe analysis.

However, despite MetaTrader’s easy learning curve, its rugged design becomes apparent when contrasted against newer and sleeker platforms. In my estimation, MetaTrader is a good choice for newbies wanting to learn the ropes, but to take your trading to the next level, you may need something more sophisticated.

Some brokers’ solution is to develop their own proprietary platforms. The advantage of most of these platforms lies in their convenience. Features like searching for instruments by asset class, scaling price action up and down with ease, or executing complex box orders are benefits you cannot find in MetaTrader. To summarise, the question of choosing the best platform for you is one of simplicity vs practicality.

Read more about the platforms in our detailed guides on the best MT4 and best MT5 brokers.

Why liquidity matters?

The deeper the liquidity pool a broker can access, the better the order execution conditions it can provide its clients. This is why traders, especially professionals, should always verify the speed and quality of order execution. The simplest way to do this is to check whether the broker adheres to a ‘best execution policy.’ This means that the company is committed to delivering the best price quotes, given the prevailing market conditions, when an order is placed.

Precision and speed of order execution are also likely to be enhanced when a broker provides Virtual Private Server (VPS) hosting. As a rule of thumb, look for brokers that can accommodate ultra-fast order execution speeds of no more than 100 milliseconds.

Explore Best forex brokers with VPS.

You can confirm a broker’s performance by going to the Legal Documents section of its website and opening its latest execution statement/review. Keep in mind that not all brokers are mandated by their regulators to post such reviews yearly. However, the ones that do are more likely to afford you precise order execution and diminished risk of negative slippage.

What Should You Consider When Evaluating Trading Instruments?

Traders in Australia should be especially mindful of the assortment of tradable instruments presented to them by their broker.

It’s fine and well if you are offered access to thousands of instruments, but if you happen to live in Sydney, for example, and 70-80% of your broker’s instruments are CFDs of U.S. companies, then that variety will be of little use for you. With a 16-hour difference between New York and Sydney, you will struggle to stay awake for the stock market opening at 1:30 am every morning. That is why it is worth choosing a broker that offers plenty of local instruments, such as share CFDs of Australian companies.

Of course, there isn’t a one-size-fits-all formula for deciding what instruments to trade and when, but affording yourself some flexibility can be beneficial. Given that the forex market operates 24 hours, it’s advantageous to select a broker that offers a wide range of currency pairs – including majors, minors, and exotics.

To broaden your options further, also look for diversity in commodities, indices, bonds, and ETFs, especially in Australian businesses and sectors.

Speaking of options, consider how you can trade the available instruments. CFDs are extremely popular due to the allure of margin trading. And your ultimate success when trading CFDs, essentially, boils down to whether your forecasts pan out.

But more experienced traders may exercise greater control over their positions by using more sophisticated instruments, such as vanilla options. By purchasing the right without obligation to execute an order, you can profit from changes in the underlying volatility.

What to Avoid When Choosing a Forex Broker?

Here is a quick rundown of what Australian traders must avoid:

• Unregulated brokers. Trading with an unregulated broker exposes you to a higher risk of fraud or unethical business practices, as they are not bound by any regulatory standards or rules.
• Limited offering of Australian instruments: FX pairs comprising AUD, share CFDs of Australian companies and ETFs, and others.
• STP accounts with floating spreads from 1.8 pips or above.
• ECN accounts with round-turn commissions above $7.

How to Avoid Forex and CFD Scams?

Scammers rely on the gullibility of traders. A common strategy they use is to promise swift and effortless profits without any risk to the trader. Often fraudsters would use labels that closely resemble the brands of real and legitimate companies. That is why regulators like the FCA have registers where traders can read about such fraudulent companies pretending to be others.

The best and easiest way to protect yourself is to make sure you work with a trustworthy and transparent broker. You can find a comprehensive list of reliable brokers by jurisdiction here.

Another important consideration is online safety. Be cautious about where you leave your personal information. Registering your details on suspicious pop-ups that promise enormous profits could lead to your contact information landing on a scammer’s dialing list. Remember, no licensed broker would make unsolicited cold calls.

The next time you get contacted out of the blue with promises of becoming the next Warren Buffet, you must remember that you are most likely speaking to a scammer. I think that nowhere is the “if something sounds too good to be true…” saying more accurate than in the world of trading. That is why you should do your due diligence before opening an account with any broker.

Our Methodology

Here at FX Empire, we have pioneered a unique methodology for evaluating Over-the-counter (OTC) derivatives brokers worldwide. Our goal is to provide a comprehensive picture of the broker’s pros and cons so that our readers can make informed decisions. We understand your need to choose the best partner for your particular goals and needs.

Our team of dedicated professionals is working continuously to improve our system and keep it up-to-date with current market trends. We test each broker systematically by employing over 250 variables across nine categories:

• Trust
• Fees
• Account Types
• Tradable Instruments
• Platforms and Tools
• Deposits and Withdrawals
• Customer Support
• Research
• Education

We strive to be as objective as possible, which is why our rigorous examinations are devoid of any personal bias as much as possible. We review the licenses of all the subsidiaries of a broker and check the fine print in the Client Agreement. The reliability of a broker is further determined based on the website’s regulations, fees, and general transparency.

We collect essential information by opening a live account with a broker entity and testing its services in real time. We measure the spreads, swaps, and commissions on its most popular account type and compare our findings to the industry average.

We also test the functionality of the available platforms, the number and types of tradable instruments, the reliability of customer support, and the quality of the research and educational materials.

For this guide, we only considered ASIC-regulated brokers that are highly transparent brokers with below-average costs, diverse account types, and a choice of user-friendly and feature-rich platforms. We also only selected brokers that offer CFD shares of Australian companies.

We abide by our strict guidelines for editorial integrity based on the objective standards we have set for our reviews. You can read more about our review process here.

Meet Our Writers

The team of forex and CFD analysts and editors at FXEmpire is composed of trading industry professionals and seasoned financial journalists. Our experts have been published on leading financial websites such as Investopedia and Forbes. In addition, they all have extensive trading experience.

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