The forex market is a global one. Although many forms of currency trading are done throughout Asia and Europe, a significant share is traded through Australian companies.
It’s important to note that most forex trades in Australia involve a variety of major currencies, but not necessarily Australian dollars themselves. However, this doesn’t mean you can’t trade using the AUD in the traditional sense.
Some online brokers are suited explicitly for forex trading Australia—perfect for those who want to invest in their own country’s dollar.
Looking at the major currencies
In general, it’s possible to make some money when trading Australian dollars, but not necessarily without risk. The AUD/USD currency pair is used in all major currency pairs. The AUD often moves opposite of both movements in the US dollar index and price changes for gold. Sometimes it also goes against the yen, but typically only with a better than average likelihood that it will move back to its original state by reversing direction.
The important thing about trading forex involving the Australian dollar is the short-term nature of this type of investment. Because there are so many other currencies involved, there’s less stability than you would find dealing directly with your own country’s currency. It means that any long-term strategies or goals should be left at home when investing in the forex market using the Australian dollar.
Basic trading rules for Australians using forex fundamental analysis
When dealing with coins, using forex trading fundamentals involves looking at trade opportunities in a marketplace that has seen its fair share of reform throughout its history. There are certain things to watch out for, which could cause problems for traders.
Knowing when to avoid trading Australian dollars
When trading with the Australian dollar (AUD), several indicators could give traders false signals or cause them to seek out a trade that they should avoid at all costs.
Likewise, a high number of short positions should spur traders towards trading in the other direction.
Above all, make sure you avoid these key mistakes that make traders lose money.
Simplified rules to follow for forex trading with the Australian dollar
There are several rules which apply specifically to forex trading with the Australian dollar, and following them will help ensure that your trades don’t go awry:
1. Don’t chase
Because there’s so much going on with AUD/USD, the best thing you can do is avoid making a quick trade because of a sudden direction change. It helps ensure that your investments last long enough to make it worth your while.
2. Be patient
There’s nothing wrong with waiting for the perfect moment when forex trading using the Australian dollar. Sometimes getting in right away isn’t what leads to profits, and if you’re too eager to take part in potential big wins, you might end up losing out on overall gains.
3. Use technical analysis
Using trading indicators such as Bollinger bands and traditional levels like support and resistance could help provide traders with better opportunities for trades involving this currency pair. For example, setting up trades based on breakouts above the Bollinger band could help. Although this is just one example, it helps illustrate using different indicators for trading purposes.
4. Don’t be too hasty
This is another rule related to making changes based on technical analysis or fundamental information. Waiting for confirmation of signals will reduce your chances of making a bad trade.
In other words, if you’re not sure about what’s going on, then don’t enter into a position. Wait until you have time to research the market further and understand the full implications of any change in direction from specific economic indicators or news events.
Remember that if you’re going to invest, this is one of those times when it pays to be patient and wait for a signal that makes sense before making any investment. This might mean passing on an opportunity or even waiting until you get the results from an economic indicator such as GDP in forex trading because AUD/USD can sometimes react strongly to these figures.