Top Platforms for CFD Trading in Australia - Traders Union

How to choose a CFD trading platform in Australia?

Choosing the right CFD trading platform is crucial for success in this field. CFD trading is a high-risk activity and requires a reliable and user-friendly trading platform. There are several CFD trading platforms available, each with its own features and benefits. Here are the steps to follow in choosing the best CFD trading platform in Australia:

Look for regulation

Regulation is crucial when it comes to selecting a CFD trading platform in Australia. The platform should be regulated by a reputable financial authority, such as the Australian Securities and Investments Commission (ASIC). This ensures that the platform is operating legally and adhering to the regulatory requirements. Alternatively, the platform can also be regulated in the U.K. or E.U., which is a good sign of reliability.

Consider platform features

The trading platform should have a user-friendly interface that is easy to navigate. The platform should provide real-time data and charts and offer advanced trading tools, such as technical indicators and risk management features. It is also essential to check if the platform offers access to educational resources, such as webinars and tutorials, to help you improve your trading skills.

Check trading assets

The CFD trading platform should provide access to a diverse range of assets, including stocks, indices, commodities, and Forex. This allows you to trade on a broad range of markets, increasing your opportunities to make profits. Make sure the platform offers a wide range of instruments within each asset class to enable you to diversify your portfolio.

Look at brokerage fees

Different CFD trading platforms charge varying brokerage fees, including commissions, spreads, and overnight financing charges. Some platforms may have lower fees but may have limited trading features, while others may charge higher fees but offer more advanced features. Consider your trading strategy, the size of your trades, and your overall trading goals when selecting a platform.

Test the platform

Most CFD trading platforms offer a demo account, which allows you to test the platform's features and trading tools with virtual funds. This is a great way to get a feel for the platform and its capabilities before committing real money. Test the platform's speed, reliability, and the effectiveness of its features.

Are CFD trading legit in Australia?

CFD trading is permitted in Australia, subject to careful regulation and restrictions on trading practices. The Australian Securities and Investments Commission (ASIC) is responsible for overseeing CFD trading in the country and has imposed conditions on brokers offering CFDs to protect Australian investors from the associated risks. These conditions include limitations on leverage, mandatory negative balance protections, and standardized margin close-out arrangements.

ASIC has also issued a product intervention order, in effect until September 29, 2022, that further limits leverage for different assets, mandates negative balance protections, and standardizes margin close-out arrangements. The commission has also prohibited brokers from offering bonuses or other incentives that encourage excessive risk-taking.

Despite the regulations, Australia remains a significant market for forex and CFD trading on a per-capita basis, with many Australians depositing thousands of dollars per month into FX/CFD trading accounts. However, potential traders should be aware of the high risks involved and the possibility of significant losses before investing in CFDs.

Do I pay taxes from CFD trading in Australia?

In Australia, CFDs (Contracts for Difference) are subject to taxation, although the taxation rules are complex and depend on the purpose of the CFDs. If the CFDs are entered into for recreational gambling purposes, they are not assessable for income tax or capital gains tax. However, if they are entered into for profit-making purposes, they are subject to income tax and capital gains tax. To provide comprehensive guidance on the taxation of CFDs in Australia, the Australian Taxation Office (ATO) has issued the Taxation Ruling T.R. 2005/15.

In general, profits and losses arising from CFD trading are considered income and deductible expenses, respectively. Trading profits are taxed as ordinary income and are not subject to capital gains tax (CGT). Any losses incurred can be deducted and used to offset other sources of income, such as employment wages. CFD trading losses can also be carried over into subsequent tax years, which can potentially reduce the Capital Gains Tax bill.

The tax treatment of CFDs in Australia is determined by the ATO's T.R. 2005/15 ruling and varies depending on whether the trading is carried out as an individual investor, business, or speculation. The ATO's rules are more open to interpretation than the U.K.'s taxation of CFDs. If in doubt, it’s recommended to seek advice from a qualified tax professional.

Can I make money with CFDs in Australia?

Yes, it’s possible to make money with CFDs in Australia with skillful use. However, it's important to remember that highly leveraged instruments carry significant risks, especially for beginners. Statistics show that up to 80% of traders lose money in this market due to a lack of strategy and understanding of leverage.

To make money with CFDs, it's essential to devote time to developing and testing a strategy and honing trading skills. A successful strategy typically involves understanding market trends, risk management, and using technical analysis tools to identify potential entry and exit points. It's also essential to be disciplined and stick to a plan, avoid emotional trading decisions, and remain aware of market news and events that can impact CFD prices.

What are the cheapest CFD brokers in Australia?

Tickmill and I.C. Markets are considered among the cheapest CFD brokers in Australia due to their low spreads and fees per lot. Tickmill is a good option for traders looking for low costs, with the lowest spreads and fees per lot. On the other hand, I.C. Markets is the biggest forex broker in the world by trading volume and offers excellent liquidity. Both brokers offer low forex fees, fast and easy account opening, and free deposit and withdrawal.

TIn addition, Tickmill, IC Markets, and Exness are among the CFD brokers with the lowest account spreads among zero-spread Forex brokers. I.C. Markets charges a $3.50 commission per lot per trade, while Tickmill charges a $2.00 commission per lot per trade. Tickmill has a minimum deposit of $100, while I.C. Markets has a slightly higher minimum deposit of $200.

What is the Best CFD trading platform for beginners in Australia?

For beginners in Australia, the best CFD trading platforms are those that offer demo and micro accounts, low minimum deposit, and passive income options such as copy trading and PAMM accounts. Some of the best CFD trading platforms in Australia for beginners include eToro, I.C. Markets, FxPro, AvaTrade, Plus500, XTB, and I.G.

eToro is one of the best overall CFD trading platforms in Australia for beginners. It provides a large range of assets, best-in-class social trading features, and a user-friendly interface. eToro also offers a demo account and a low minimum deposit of $200. It’s a good choice for beginners who want to learn from other traders and copy their trades.

I.C. Markets and FxPro are also good options for beginners. I.C. Markets offers a demo account, a micro account, and a low minimum deposit of $200. It also offers copy trading and PAMM accounts for passive income. FxPro offers a demo account, a micro account, and a low minimum deposit of $100. It also offers copy trading and a range of trading platforms to choose from.