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Forex trading in India – how it works

Forex trading is focused on exchange of foreign currency – that essentially means changing the currency of one nation into another. The process involves selling a particular currency with another currency. Forex trading in India is a way to earn handsome profits by identifying the right opportunity to buy or sell currency notes. Before going into how it all works in the Indian scenario, it is essential to know few key elements that govern the forex market in India.

       Currency trading in the country are not settled physically; that is, currency futures are traded – they are settled through cash.

       It is essential to first open an account for Forex trading in India with an established broker platform to get started with currency trading.

       Just like elsewhere in the world, currency trading in India revolves around a par of currencies.

       It is also necessary that you get your KYC or the ‘Know Your Customer’ formalities done before starting with forex trading.

       Also, you need to ensure that the broker platform that you are registered with provides you all the accesses required to start the process.

       Before starting, it is also essential to deposit a required amount in your account.

How does it work?

The method of forex trading in India is quite simple. You need to be using a proper platform where you get updated rates of one currency against another. Example, the USD/INR rate is the number of Rupees that one can buy with 1 US Dollar. As a forex trader, you need to be very well-informed about the market and how one currency is poised against another. You need to have a proper understanding of the market trends to be able to take profitable decisions. So, in the example above, if you are futuristic and understand that the Indian Rupee is going to increase in value against US Dollar in the future, you could invest in buying USD with the help of INR. If your predictions are right and the rate rises in the future, you could sell the US Dollars to make a profit.

The truth is that the forex market is one of the most profitable markets in the world and the US Dollars is one that attracts the largest trade volumes in this market. Forex trading in India is marked by demand and supply and as a trader, it is essential that you understand your financial and risk management goals before starting to trade.

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