How Forex Trading Works in India?

 

How Forex Trading Works in India?

There’s a slow and steady rise of people in India who are making investments. People are getting educated about investment options like the stock market, mutual funds, bonds and using these options to secure their future. This is a great development not just for Indian markets but also for the overall financial health of the country. What many people are still unaware of is forex trading. This investment option still needs a lot of promotion and awareness. Here are a few points to give you a basic understanding of how forex works in India:

 The Legality of Forex Trading in India

 There’s a false notion among investors that if you trade in forex, you will be put behind bars. In reality, you can easily find a currency exchange regulated by the Reserve Bank of India and protected by the Securities Exchange Board of India (SEBI) and can legally trade in it. You just have to make sure you are following the regulatory restrictions and trade only with regulated brokers. With a few exceptions, you can’t trade in pairs that do not involve the Indian rupee.

The Functioning of Forex Market

 The value of currencies and their exchange rates changes almost every day. These changes in value occur due to global events and news. Also, the market activities like buying, selling and exchanging of currencies by the traders also influence its value. In the trading process, traders try to book profit. Industry experts always advice to keep a close watch on international news. Events like political instability, natural disasters and economic changes in a country often influence the value of its currency.

Common Forex Trading Strategies

 When you step into the world of forex trading, you got to learn strategies that will help you make a profit. Here are some strategies that you can explore:

 

·        Day Trading – In this strategy, you open and close a trade on the same day. Currency markets can change dramatically overnight and can trigger a reversal which can lead to losses. In order to save yourself from the same, you close the deal within a few minutes or hours.

 

·        Scalping – This strategy involves making small trades one after the other. You look to make small profits but in more volume. This takes practice but it can be quite beneficial. 

·        Position Trading – This one is for those who want to invest for the long haul. You can hold the position for months and years to make profits long term. 

We still have limited forex traders in India and that should definitely change. If more people explore this investment option, the Indian rupee can get stronger. Also, this additional option is a good way for investors to expand their portfolios.