How to choose the best online broker for Australian traders

What’s an online broker?

An online broker is the ‘middleman’ between buyers and sellers of financial instruments. Brokerages charge traders and investors a fee or commission for facilitating the purchase and sale of assets using their platform. They often invest in high-performance technologies to enable their clients to get exposure to a wide range of markets and tools.

What’s an online brokerage account?

An online brokerage account is a trading or investing account that you open with a broker like us. You’ll use it to buy and sell financial securities.

This is also where your profits and losses will be recorded. You can fund your trading account with your broker and withdraw money if you have any available.

Having an account with an online broker means you can trade and invest in a variety of markets. Trading means speculating on asset prices without owning them, while investing means you’ll own the assets outright.

When trading with us, you’ll open a CFD trading account. When investing, on the other hand, you’ll make use of a share trading account.

How does a brokerage account work in Australia?

Deposit funds - Once you’ve opened a brokerage account, you can start depositing funds. You’ll use these funds to trade or invest. Some brokers expect you to deposit funds immediately, while others only require you to add money when you want to start opening positions.

You can often use a variety of methods to fund your account, such as direct deposit, credit card or PayPal. This could differ from broker to broker.

Pick a market to trade or invest in - Think of your online brokerage account as the doorway to the financial markets. Your broker will offer a selection of markets to trade or invest in – it’s up to you to decide which markets you’re interested in.

Consider your position size and cost - If you’ve opened an account, you’ve probably already decided whether trading or investing is right for you. So, once you know which markets you’re going to explore, it’s time to consider the size of your positions and how much capital you’re going to put towards them.

You can decide how big or small you want your positions to be, but sometimes certain minimums will apply. Remember, both your position size as well as the price of the instrument need to be factored into the cost. Plus, other fees and charges may apply.

Study market movements - Your broker is not in charge of your online account – you are. That’s why it’s important that you study market movements and keep a close eye on your open positions.

Everything you do on the online account carries risk, so make sure you understand the ins and outs of the account, the platform you’re using, as well as the market you’re trading.

If you want access to a brokerage account in Australia, you can open one with us and start trading or investing in over 18,000 markets. The account will enable you to buy and sell assets – by owning them outright or speculating on their price. We’re Australia’s No.1 choice for CFD trading² and we have over 320,000 clients worldwide.

Know your trading style

It’s important to know your trading style when choosing a broker. It’ll often depend on your personal preference and appetite for risk. For instance, if you prefer to buy and own shares, investment trusts or ETFs outright (long-term investing), you might consider opening a share trading account.

However, if you’d like to use leverage to trade a wider selection of markets, you might consider more complex products like CFDs (short- and medium-term trading). It could be worth opening a demo account and use the $20,000 worth of virtual funds to familiarise yourself with how these products work.

Your trading style might impact the type of broker you choose, as not all online brokers offer the same products or markets. The four most popular trading styles are:

How to choose an online broker

There are several key factors to consider when choosing an online broker, such as account types, available markets, costs and fees, trading hours, and more.

Trading account types

The type of account you open will depend on your personal preferences when it comes to trading or investing. Consider whether you want to buy and hold the assets and earn an income from dividends, or if you prefer to have exposure to assets over the short term.

An investment account is more suited to someone who wants to buy and own financial assets, while a trading account would be suited to someone who wants to speculate on rising and falling prices.

Markets and assets to trade

There are thousands of markets to trade across the globe.

• Shares: buy and sell individual company stocks like Tesla, BHP Group or Alibaba
• Indices: get exposure to a group of stocks from an exchange such as the FTSE 100 or the Germany 40
• Forex: trade the value of currency pairs, for example EUR/USD or GBP/CHF
• ETFs: open a position that’ll expose you to multiple assets from a single trade with ETFs, which are baskets of different stocks
• Bonds: trade on future changes in long-term interest rates, while mitigating risk by hedging against existing government bonds
• Commodities: buy and sell hard or soft commodities like oil, gold, wheat, orange juice and more
• Interest rates: take a position on the future direction of global interest rates
• Initial public offerings (IPOs): trade on companies making their debut on exchanges all over the world
• Themes: get exposure to themes that follow upcoming global trends such as clean energy, electric vehicles and robotics

On our CFD account we offer access to over 18,000 markets, including shares, forex, indices, commodities and ETFs. It’s important to make use of our risk management tools, regardless of your trading style, the market you choose and your risk appetite.

Why choose IG?

You’ll get access to more markets and longer trading hours on our platform. Here are some of the reasons why more than 380,000 people choose to trade with us.

We’re a top online trading provider

• Deal on our award-winning platform and mobile app¹
• Get exposure to over 18,000 markets, including forex, shares, indices, commodities and more. No other online broker offers more markets than us
• Access deep liquidity and enjoy fast execution on our platform, no matter which device you use
• Gain access to the markets for longer by trading out-of-hours and on weekends (not available on all markets). We have the longest trading hours available
• Benefit from advanced dealing options such as points through current and partial fills that you can turn on or off on our platform

We have many different account types and platforms

• Get direct market access (DMA) through L2 Dealer
• Get access to automated trading though ProRealTime, MT4 and L2 Dealer
• Enhance your trading experience by using advanced charting platform options in ProRealTime, TradingView and MT4

We offer trade, analytics and education tools

• Receive 24/7 telephonic support from our service desk and a one-on-one walk through when opening an account with us
• Set up trading signals through Signal Centre and Autochartist to get actionable buy and sell signals*.
• Receive your price and indicator alerts using email or push notifications
• Share your experience and ask questions in our community forum, which has over 64,000 members
• Get the latest market news and analysis from our industry experts with IG Live
• Learn valuable skills for free using guides and training materials available on IG Academy

*The signal service does not constitute and should not be regarded as investment advice. IG provides an execution only service. You act on the signals entirely at your own risk.