How to Trade Cryptocurrency in Australia

Last Updated on July 14, 2023 by Kevin Groves

Cryptocurrency trading can be extremely overwhelming for beginners, especially when you don’t know where to start. There are so many complex terms to understand, lots of platforms to choose from and more than 22,500 cryptocurrencies to trade with. Australians are very active crypto traders, and it’s no surprise that you want to join them. In fact, 13% of all Australians hold bitcoin, which is quite impressive.

If you’re not sure how to trade crypto, this comprehensive guide will take you through all you need to know to start trading cryptocurrency in Australia.

Affiliate Disclaimer: We are reader supported and may earn a commission when clicking through the product links. This helps us grow the content and support the website. Read our disclosure for more information.

Guide to Cryptocurrency Trading in Australia

To trade crypto in Australia, follow these steps:

Step 1: Choose a Reliable Exchange Platform

There are more than 400 crypto exchange platforms in Australia, and you need to choose one that suits your needs best. Every investor has short-term & long-term goals, and this often determines the site that they sign up for. Some people prefer sites with a wide selection of cryptocurrencies, while others prioritize their user experience.

Not sure which exchange to use? Check out our list of the best crypto exchanges in Australia.

In short, conduct extensive research and settle on the platform that you are most comfortable with. If you’re having a hard time reviewing all the exchange sites, don’t fret. Our top-rated platform Swyftx is a great option for beginners. there is also a free $20 BTC Swyftx bonus using our referral code.

Step 2: Sign up for an Account and Complete the ID Verification

Most exchange platforms in Australia are registered and regulated by AUSTRAC. This is why you’ll have to verify your identity before you can start actively trading. Most of the time, the sign-up process is usually straightforward, and you only have to fill in your full name, email address, country of residence, and mobile phone number.

A verification email is then sent to your registered email address, and you can then access your trading dashboard. Don’t forget to set up 2FA to keep your account secure. Verification can take anywhere between a couple of hours to 3 days, depending on how busy the network is.

To speed up this process, make sure the formation you provide coincides with the one that’s on the ID documents that you upload.

Step 3: Deposit Funds Into Your Account

As soon as your account is verified, deposit funds into your account so that you can start trading.

Some Australian sites allow you to deposit AUDs into your account, but there are others that only accept USD deposits. For such sites, you’ll have to incur a conversion fee.

Step 4: Research the market

The success of trading crypto is highly dependent on your technical analysis skills. You need to understand the historical price movement of a cryptocurrency, identify what caused various price movements and then use that information to pinpoint profitable opportunities within the day.

You should use factors such as technical indicators, price action, volume, and chart patterns to predict the future price of crypto and then put down an investment when you expect the prices will increase.

Keep in mind that each coin behaves differently based on current market conditions, so you need to tailor your crypto trading strategy for each pair.

Step 5: Enter the amount and place a trade

Go to the trade/buy section of your dashboard and select among the multiple cryptocurrencies to trade with. Crypto trading may seem straightforward, but before you go all in, take some time and invest in crypto resources. It’s vital that you get the lay of the land and understand the various coins before you start trading.

Step 6: Monitor the trade

Once the trade is active, monitor the profit and loss and set clear stop-loss and take-profit orders to limit exposure.

What You Need To Trade Cryptocurrency

There are 2 main things you need to start trading cryptocurrencies in Australia:

• A cryptocurrency Wallet: this is the medium that holds the private or public keys to all your cryptocurrency transactions. Once you start acquiring digital coins such as bitcoin, you can store them in the wallet to keep them safe from hackers. The 3 main types of cryptocurrency wallets are software wallets, hardware wallets (most secure), and paper wallets. Some exchange sites also offer their users wallets.
• A reputable exchange platform: there are 2 main ways that you can trade cryptocurrency; through peer-to-peer exchange sites and exchange platforms. Peer-to-peer sites connect cryptocurrency buyers and sellers directly, but they are very risky. Chances of fraud are high, and if you’re not careful, you may end up being scammed.

Exchange sites, on the other hand, are safer and have a wide variety of digital coins for you to trade with. Most Australian platforms are also regulated and have to comply with strict Know Your Customer and AntiMoney Laundering rules. This ensures that all transactions are monitored for suspicious activities, significantly reducing the chances of fraud.

Factors to Consider Before Trading Cryptocurrency

Trading Fees

It’s advisable that you sign up on a platform with low trading fees because this is the difference between generating profits and making losses on your crypto investments. High trading fees tend to take away a huge chunk of your profit because exchange sites charge you every time you buy, sell and withdraw from your account.

For small trades, this may seem like a small price to pay, but over time the money accumulates into a sizable amount. This is especially true if you’re planning on trading cryptocurrency as a long-term investment.

Reputation and Reliability

The cryptocurrency industry is still relatively new and highly vulnerable to cases of fraud. In contrast, traditional payment systems are still heavily monitored and regulated. This laxity in regulations has resulted in multiple fraud cases, a high rate of scams, and security breaches for some platforms.

Before you sign up on an exchange site, conduct due diligence by going through their online reviews. To identify the number of scams associated with the platform, Google the site and add + “SCAM”.

Customer Support

When it comes to crypto trading, every second counts; it could be the difference between making a killer profit and losing all your investment. This is why you need a site that you could reach easily in case of any mishaps.

Some cryptocurrency sites like Swyftx have stellar customer support structures, and you can contact them via live support on their site, telegram, and email.

There are some platforms, however, that only have email support, which tends to be slow. Make sure you also go through a site’s Trustpilot reviews to gauge how reliable their customer support is.

Supported Cryptocurrencies

Even if you’re just starting out, it’s wise to sign up on an exchange with multiple cryptocurrencies for you to trade with. Most Australian platforms will allow you to buy, sell and trade the major coins like Bitcoin and Ethereum, but there’s more to crypto trading than that.

Find out whether the site also has lesser-known altcoins, as this will enable you to diversify your Portfolio and spread out your risk exposure.

Security Features

Due to the number of funds that are traded on exchange platforms, they are always a target for malicious hackers. Make sure you go for an exchange site with stringent security protocols to ensure that your investment is safe. Some of the security features you should look out for include;

• 2-factor authentication
• Storage of funds in cold wallets.
• Insurance for the funds stored in hot wallets.
• SSL Site Security Certificate

Availability

Australia is home to many crypto exchange sites, but due to its heavy financial rules and regulations, some international exchanges are not available.

Make sure you limit your choices to platforms that operate within the country, as this will make it easier for you to deposit and withdraw funds.

Ease of Use

Cryptocurrency trading is already challenging enough, and if you’re just getting started, you’ll need a platform that’s easy to navigate and trade with. It shouldn’t have a lot of jargon as you could end up making costly mistakes. Interact with the user interface for a while before signing up to determine how comfortable you are trading on the site.

Types of Cryptocurrency Trading

There are 2 types of cryptocurrency trading strategies:

1. Short-term trading: this is all about benefiting from the short-term price swings of digital assets by executing your training strategy when there’s price volatility. Short-term trading is highly risky, but it promises larger and quicker returns if you do it right. The best way to trade intraday charts is to use a crypto margin platform that offers high leverage such as Binance and Bybit Australia.
2. Long-term trading: with this type of trading, you hold your digital coins for a long period of time with the intention of selling them when their value increases for a profit. Long-term trading is perfect for investors that want to make profits without the stress that comes with actively trading.

Before you engage in this type of trading, learn how to safely hold digital assets.

---

How to Create an Effective Trading Strategy

The main difference between cryptocurrency trading and gambling is the execution of a plan. To minimize your risk of making a loss, here’s how you can create an effective trading strategy.

1. Identify Patterns

The foundation of all reading chats and trading strategies is looking at the previous price movements and identifying patterns. You should then use those patterns to make future predictions. There are instances where patterns are so regular in multiple markets that they are named, e.g. support and resistance. Some patterns are, however, obscure, and you may have to look harder for them.

Some of the patterns you should look out for include the price change of bitcoin when Ethereum experiences a price drop or the impact of the US dollar price increase on bitcoin.

2. Create a Plan and Follow It

If you find a plan that works for you, stick to it! There are 2 major aspects that you should include in your plan;

• Where to take your profits
• When to cut your losses

Ensure that every loss or gain you make is within sensible boundaries irrespective of the current market trends. As you gain experience, you’ll be in a position to create sophisticated trading strategies that incorporate more market indicators.

3. Try Out Various Theories

Experiment with various strategies before investing a lot of money in them. You could either use backtesting or paper trading.

Backtesting involves executing trading strategies based on historical market movements to identify whether it would have performed well. Paper trading, on the other hand, is all about using virtual money on real trades and under current market positions to gauge its effectiveness.

Popular Cryptocurrency Trading Strategies

Some of the most popular trading strategies for crypto are:

Scalping

Scalping involves taking advantage of small price movements that happen within short time frames. These movements are triggered by market inefficiencies such ad liquidity gaps and high/ low bid-ask spreads.

Percentage price targets in this age are very low, so larger positions are the only way to make tidy profits. This is why most scalpers engage in margin and futures contracts trading to increase their results.

Margin trading platforms such as Bybit and FTX allow you to buy crypto assets in exchange to increase the amount of capital to trade with. You, however, have to make a commitment to pay the exchange back a percentage of the cryptocurrency’s value.

Trading with leverage allows you to benefit fully from the small price movements, but you also need to acquaint yourself with position sizing rules and margin requirements. You also have to define your entry and exit points using strategies such as technical analysis, order book analysis and volume heat moves. Scalping requires swift trade executions and is very risky, which is why it’s best for expert traders.

Range Trading

This type of day trading strategy involves identifying price ranges within the cryptocurrency market and then executing profitable strategies based on them. The range’s lower limit is referred to as the support limit, while the upper range is known as the resistance limit.

Range traders use these limits and candlestick analysis to make speculations on whether their trades will be profitable. They also have the flexibility to exit at the support level and short at the resistance level.

Any price movements beyond resistance and support limits break the range; downward movements translate into losses while upward movements are profitable. To protect yourself against range breaks, you should apply a stop-loss so that you can exit the market as soon as there are high chances of making a loss.

Make sure you acquaint yourself with price movement indicators such as MACD (Moving Average Convergence Divergence) and RSI (Relative Strength Index). Range trading is pretty straightforward and can be used by beginner traders.

High-Frequency Trading (HFT)

This day trading strategy is mainly used by large institutions like hedge fund companies and involves using crypto bots and trading algorithms to quickly enter and exit the market. HFT has very short timeframes (milliseconds) and requires the trader to always be on their screen so that they can day trade on many positions.

This day trading strategy is very exclusive because those who are successful at it don’t share their secrets. You also have to have extensive knowledge in

What to Watch Out for When Trading With Cryptocurrencies

Cryptocurrency trading can be risky, and you may end up facing some challenges. Be on the lookout for:

• Inaccurate patterns: most of the time, markets tend to follow historical patterns, but there are some times that they don’t. This is one of the major risks that come with crypto trading, and you need to learn how to identify inaccurate patterns.
• Volatility: the cryptocurrency sphere is very dynamic, and this is one of the aspects that makes it highly attractive to traders. It’s also what makes trading very risky. Drastic market and price shifts can happen at any moment, ultimately impacting your profits. This can have more effect on exchanges with low trading volume, and therefore result in different prices across crypto exchanges.
• Using excessive leverage: most exchange sites offer up to 100 times leverage, and this magnifies your potential risks. Keep in mind that cryptocurrency is highly volatile, and if you combine this with high leverage, liquidity will increase.
• Not knowing when to cut your losses: you need to know when to fold and close a position; otherwise, you’ll end up making more losses.
• Unregulated manipulated markets: compared to traditional financial markets, the cryptocurrency industry is highly regulated, which is why market manipulation is common. Liquidity is also low, and this contributes to the high market volatility.
• Being over-exposed: only invest what you’re comfortable losing. Ensure you set up stop orders to limit over-exposure in case of drastic price swings.

Which Cryptocurrency to Trade?

When the first cryptocurrency was launched, it was mainly aimed at providing people with an alternate form of currency that was free from government regulations. It worked on a decentralized structure, which ensured that its value and supply weren’t impacted by any regulatory body.

Over time, however, few people acquire cryptocurrencies for their transaction value; most of them buy digital coins as investment commodities. Here’s a quick overview of the top 5 cryptocurrencies you can get started with.

Bitcoin (BTC)

Bitcoin was the first cryptocurrency to be launched and is currently the gold standard for all digital coins. It was released in 2009 by Satoshi Nakamoto and promised lower transaction fees compared to traditional payment systems. There was a lot of controversy around this coin at first, and few people invested in it. The future of bitcoin was also in question, but over time, it has become a trendsetter for all cryptocurrencies. It has a market limit of 21 million BTC.

You can even trade small amounts of the coin at a fraction of the actual value. Read our full guide on how to buy Bitcoin in Australia.

Ethereum (ETH)

Unlike most cryptocurrencies, Ethereum runs on a smart contract network. It was launched in 2015 and is the second-largest digital coin after bitcoin when it comes to market capitalization. This digital asset allows people to access financial products freely regardless of their nationality and runs without interference from third parties. Read our full guide on how to buy Ethereum in Australia.

Litecoin (LTC)

Litecoin was among the first cryptocurrencies to be released after bitcoin, and it was launched in 2011. It was developed by a former Google engineer, Charlie Lee, who was trying to create a lighter version of bitcoin.

LTC is often considered the silver to bitcoin’s gold, and it’s not hard to see why. Initially, you could only use bitcoin for large transactions. This made it difficult for small-scale investors to access this coin, so Charlie developed a coin that could be used for small transactions.

Litecoin and bitcoin are similar in more ways than one, and that’s because LTC was built off Bitcoin’s source code. The traction confirmation time of LTC is, however, faster, and the coin has a market limit of 84 million.

Polkadot (DOT)

Polkadot is unique in that it solves the main problem that blockchain faces; interoperability. For a long time, different networks could not communicate with each other, which made it difficult for the systems to work together.

There are hundreds of blockchains in existence, but they all live in isolation. Polkadot is designed to support multiple chains through a concept known as sharding. This ensures that transactions are processed swiftly and accurately.

Tether (USDT)

This was one of the first digital assets known as stablecoins. These types of cryptocurrencies peg their market value on fiat currency, and the USDT is pegged on the American dollar at a 1:1 ratio.

One of the major reasons why the tethers are popular is that they don’t experience frequent pierce volatility, and you can convert them to fiat currency easily.

Many more cryptocurrencies have been launched since bitcoin was released, some of which still haven’t hit the $1 trading mark. You should be cautious before investing in new coins because they are very risky. Their prices are highly volatile, and you can quickly lose your investment.

Effective Tips for Cryptocurrency Trading in Australia

Cryptocurrency reading can be highly profitable, but you need to get into it with a clear strategy. Here are some useful tips to get you started.

• Secure your accounts: if your trading account gets hacked or you lose your private key, you lose all your investment. In most cases, when this happens, the chances of recovering your account are very low. Ensure your account is well secured with a strong password and that you’ve enabled 2 factors authentication. Avoid signing into your account on public networks and limit the devices you use to access it. Don’t forget to familiarize yourself with the most common scams.
• Understand order types: if you plan on trading on an exchange, this is very important. Know the difference between a market order and a limit order and understand how they work. Keep in mind that crypto markets have low liquidity so refrain from placing very big market orders.
• Use technical analysis on trades: crypto trading can be very profitable, but you can also lose all your investments as fast as you made it. Technical analysis will help you mitigate your risks. If you only plan on trading big coins like Bitcoin, the chances of losing your investment overnight are low. The lesser-known coins, on the other hand, are riskier, but they also tend to offer a great reward.
• Understand the tax implications of crypto trading: cryptocurrency trading is a taxable event so familiarize yourself with the tax implications of every trade.
• Manage your risks: don’t rush to invest in coins that you consider massively profitable. You’ll most likely end up losing all your investment. Focus on regular trades that give you small but sure gains and invest in low liquidity markets. This strategy will require patience, but they are safer for beginners.
• Don’t buy coins just because their prices are low: the decision to invest in a coin should have a lot to do with its market cap instead of its affordability. Think of it in terms of conventional stock; they’re evaluated using their current market price multiplied by the total number of outstanding shares. For instance, there’s no difference between investing in a cryptocurrency that’s priced at $100 per coin and has 100,000 shares and a coin priced at $10 with 1,000,000 shares.
• Don’t hold on to altcoins for very long: altcoins tend to lose their value over short periods of time so sell them as soon as they are profitable. If you’re considering long-term cryptocurrency investments, go for coins with a high daily trading volume. Make sure you look at the market patterns to identify the best times to buy or sell a coin in Australian dollars.
• Diversify your Portfolio: don’t put all your eggs in one basket. The cryptocurrency market is unpredictable, and as much as you can make thousands in a day, you can also lose all your money. Invest in different coins so that even if you make a loss on one coin, you’ll likely make a profit on another one.

---

Benefits of Cryptocurrency Trading

Cryptocurrency trading has a variety of benefits such as;

• Total decentralization: digital assets aren’t tied to any regulatory body, so their prices are rarely impacted by economic crises and government laws.
• High security: most of the transactions are usually anonymous, and you rarely have to provide exchanges with extremely sensitive information such as your bank details.
• Borderless trading: cryptocurrencies turn the world into a global village where you can make international transactions using digital coins without having to convert them into fiat currency.

Now that you already know how cryptocurrency trading works, the first thing you need to do is sign up for an exchange site. Swyftx has a demo account feature that’s particularly beneficial to beginner traders. You can use it to sharpen your trading skills before you start investing real money.

Is Cryptocurrency Trading Legal in Australia?

Australia has been very progressive when it comes to digital assets, and the RBA legalized crypto in December 2017. Their legalization made them subject to Australia Anti-Money Laundering and Counter-Terrorism Financing Act 2006, and all cryptocurrency exchange sites had to be registered under AUSTRAC.

The legislator also highlighted that all digital coins, including bitcoin, would be treated as property and therefore subject to the capital gains tax. While this ensures that you can easily trade cryptocurrency in Australia, it also means that all trades trigger a taxable event.