How To Start Forex Trading In India? Step By Step Guide

Forex Trading In India

The term “Forex Trading” is tempting enough for many of the investors as it is the largest market in the world, could generate a huge amount of profit. Trading in foreign currency is known as Forex, simultaneous buying of one currency and selling of another. Trades are executed in the currency pairs or forex. Therefore, a brief description of the currency pair is necessary prior to proceeding. A currency pair is a quotation of any two different currencies. One currency’s value is being quoted against other. In a currency pair, the first listed currency refers to the base currency and the second listed currency is quote currency. In my previous post, I have written on a controversial subject, “RBI Rules For Forex Trading In India Is Legal Or Not”. Today’s topic will cover “How To Start Forex Trading In India?”

Previously, in the Forex market, trading only happened through foreign brokers. Generally, the risk factors are high in the forex. Therefore, if there are only foreign brokers available in the market, the risk level will become much higher than before. Besides this, in order to save foreign reserves to some extent, RBI put some restriction on the Forex trade.

How To Start Forex Trading In India?

As I have mentioned earlier that when forex trading was introduced in India, there were only foreign brokers like FXCM, ALPARI, GCI, AVA, OANDA etc. After restriction from the Reserve Bank of India, investors can trade in Forex but only through Indian SEBI registered broker. Now, at present all you need to trade in forex is to have a Demat account. Forex is legally allowed within Indian Exchanges, BSE, NSE, MCX-SX (Multi commodity exchange). Indian resident including banks, financial institutions, can do Forex trade in various currency pairs like EURUSD, GBPUSD, JPYUSD, USDINR, EURINR, GBPINR etc.

Points to Remember for Successful Forex Trading

  • Forex trading is similar to equity trading, the only difference is in equity trading, share value matters while in the forex trading exchange rate matters.
  • Investors must have sufficient knowledge and enough experience regarding market and price action prior to forex trade.
  • Forex market remains open all over 24 hours 5 days a week but in India market close at 5 pm. Hence, it is advisable to choose intraday rather than position.
  • Be aware of the scams in the forex market.
  • NRIs are not bound to follow any rules of RBI regarding the forex trade, they can choose foreign brokers also and trade. The RBI rules of SEBI registered broker is only for Indian resident.

Now, in lowest brokerage firms also, forex trading facilities are available. Like in Zerodha, you can do Forex trading in various currency pairs. You can easily open a trading account and demat account with a stockbroker within few days. Read this article to open account in Zerodha within 3 days.

Indrajit is a professional blogger and trading system developer. Amibroker expert, WordPress expert, SEO expert and stock market analyst.Trading since 2002, he has started the journey of StockManiacs.net on 2008. He follows Indian and world stock markets closely.