They have access to ultra-low spread, best platforms, improved execution speed, and top tools that help them stand toe to toe with big boys. Currencies are traded in the form of a pair, for, e.g., AUD/JPY, where AUD stands as the base and JPY as the quote.
Sydney trading session
|During fall||Sydney Open – 7:00 AM Sydney Close – 4:00 PM||3:00 PM 12:00 AM||8:00 PM 5:00 AM|
|During spring||Sydney Open – 7:00 AM Sydney Close – 4:00 PM||5:00 PM 2:00 AM||10:00 PM 7:00 AM|
Table 1. The trading hours of Sydney or Australian sessions. The difference between spring and fall is due to the daylight saving times.
The Asian session bells ring with the open of the Forex Trading Australia. While much of the trading activity is available on Yen, the Australian dollar does not fall far behind. The volatility and liquidity might be low compared to London and New York sessions. Still, the ranging markets provide good opportunities for algorithms and traders who use a range-based trading system.
Trading AUD pairs
At the beginning of the open, several news releases cause the Australian dollar to show volatility, which Australian or global traders can capitalize on. When a trader goes long on any Australian pair with AUD as a base currency, he buys the Australian dollar and sells the quote. For going short, we can assume the opposite scenario.
AUD/USD is the favorite choice of traders who are learning technical trading. The pair moves in short bursts and provides enough volatility to bag in a good number of pips while reducing risk.
Image 1. A weekly chart on AUD/USD shows a perfect uptrend within a channel.
GBP/AUD is one of the volatile pairs amongst all the currency pairs. Novice traders should stay away from it as the volatility can wipe out your portfolio within minutes.
Important AUD economic events for fundamental traders
Traders must be cautious of incoming economic events from the Australian government or banks if they’d like to trade Aussie pairs. Here is a highlight of a few critical financial releases:
- Gross Domestic Product GDP
- Retail sales
- Industrial production
- Trade balances
Market participants from Australia should also keep an eye on essential metals and commodities that drive the country’s economy. Technical traders should also be wary of the economic factors as they are potent in determining long-term trends.
What should I look for before choosing a broker if I am based in Australia?
Regulation is one of the key points an Australian trader should overlook. Australian Securities & Investments Commission ASIC is responsible for keeping the brokers within this continent under check and balance. Other than regulation, ensure that the exchange offers tight spreads, low latency, good educational material, various instruments, and customer support.
Is it hard to trade forex?
Without using proper risk management, strategy, and mindset, a trader will surely end up in losing 90% of traders. Trading currencies or any other asset is simple but not easy. However, with the recent developments in the simulation department, it is possible to speed up the learning curve.
Can you make money by investing $1000 Australian?
With the right type of investment, you can make a lot of money out of $1000 Australian. As an amateur or professional trader, you can trade with prop firms for as low as $200. The ROI, in this case, is significant as you don’t risk losing money.