What is Forex trading?
The foreign exchange market is a decentralized global market for the trading of currencies. The currency market, also known as foreign exchange trading (forex trading), helps investors take views on different currencies. Those investors around the world use currency futures contracts for trades. Currency futures allow investors to buy or sell a currency at a fixed price in future periods. This market determines foreign exchange rates or values for every currency. It includes all types of buying, selling, and exchanging currencies at determined prices.
How to start Forex trading in India?
As mentioned earlier, Forex trading in India is cash-settled. That is, you do not get physical delivery of the currencies. Therefore, you should not need a Demat account for currency trading. And then, you only require a trading account to start forex trading in India.
The steps to start forex trading in India are easy:
- Get on the internet.
- Find an authorized and forex broker.
- Open the best forex trading account and do make the initial deposit.
- Get access to the forex trading platform of your broker.
- Place your first trade, and you are done.
Get on the internet
To start forex trading in India, you need the best internet service provider with minimum disruptions. It is all about fast reactions. Moreover, the delay of five seconds may be the difference between profit or loss. Since this is vast and on high leverages, even a small delay can expand your loss.
Find an authorized and real forex broker
There is a maximum of thousands of fake forex brokers online. Finding an honest, trustworthy forex broker is a more time-consuming activity.
While selecting a forex broker to make sure that:
- The broker is highly reputable amongst forex traders.
- They offers a minimum and flat brokerage structure.
- The broker offers a high leverage ratio against low-level margins.
- The broker has a well-maintained and specific trading platform.
Assuming you find an honest traditional forex broker, you will be ended up paying very high brokerage charges in exchange for forex tips.
Open the best forex trading account in India
Still, many traditional and discount brokers have a lengthy offline trading account opening process that involves unnecessary back and forth couriers.
Similarly, you can spend between Rs 120 to Rs 200 on these couriers. To have the best deal, you get 100% brokerage cashback for the first month exclusively.
Get access to the forex trading platform
This platform is an online software that enables access to the foreign exchange market. It can be used to open, close, and manage trades from the device and contains a variety of tools and indicators designed to allow you to regulate and analyze the markets in real-time.
Your forex broker will provide you an online trading platform or software. Through which, you may get your orders and start forex trading. It gives you real-time news, insights from the markets, and the most reliable trading platform for currency trading in India.
Place your first trade
After completing the above steps, you can start trading in the Indian forex markets.
Forex traders don’t require a lot of capital to trade due to trade on margin. The average Forex broker requires a minimum of $300 to open an account and start trading. As a beginner, you should start with smaller amounts and low leverage and you should also not expose more than 1% – 2% of your capital. You can refer to the forex trading tips and the forex strategies before you start to trade in the forex markets.
Forex Trading Strategies In India
Here are some of the best strategies many forex traders use to a significant effect:
- Day trading
As the name specifies, this trading technique has an opening and closing of trade on the same day. The day trading technique is considered adequate as you can protect yourself from any shock, which may trigger a reversal due to overnight volatility. Therefore, the average trade duration takes between many hours to a couple of hours.
It is a technique, which involves making many small trades repeatedly. When executing these trades, ensure to set the entry and exit points within lesser movements to guarantee small margins. But, if you want to succeed as a scalper, you should have perfect executions.
- Position trading
For this trading strategy, your personal goal is to hold onto a position for a long duration, either week, many months, or even a couple of years. Observing this strategy allows you to get huge profits from the basic movements of the selected currency pairs.
- Price action trading
Price action trading strategy involves studying the ancient price movement of currencies and deciding the support and challenging levels. This strategy works in every market condition and across all time frames, short-term, medium-term, and long-term.
While forex trading is the largest market global marketplace but it is to take roots well in India. As a result, many investors are still timid about trying their best in the profitable foreign exchange market. Suppose you are an investor interested in learning about this in India but didn’t know where to start. In that case, this detailed post has an overview of all the essential details you need to know about Forex trading.