How To Get Started In Currency Trading

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How To Get Started In Currency Trading – The forex derivatives market in India is growing slowly but steadily. It is only August, yet forex traders have bought and sold currency derivatives worth Rs. 1, 19, 80, 502 crores. This is why many people want to start forex trading.

There are advantages to trading currency pairs. A trader can be exposed to international currencies, high liquidity and margin advantages. But above all, there is potential money to be made in the forex market.

How To Get Started In Currency Trading

How To Get Started In Currency Trading

From choosing the right broker to creating the right trading strategies, it’s important to start forex trading right. We will walk you through the complete process of starting forex trading in India.

Key Factors To Consider Before You Start Trading Forex

Here are the things you need to know before starting forex trading. Forex trading in India is allowed only on recognized stock exchanges like NSE, BSE and MSE through registered forex trading platforms and brokers like Dhan.

In addition, a currency trader like you can buy and sell futures and options for the seven types of forex pairs listed in the table below.

There are other important aspects of Forex trading that you should know. You can check them here: Is Forex Trading Legal in India? If you already know the basics, then these are the steps to start forex trading in India.

The forex market is truly global and covers everything from currency exchange for foreign trips to trading in forex derivatives. It is the last one that interests you.

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That is why you should choose a forex trading broker that allows you to buy and sell futures and options of currency pairs. The way traders go about it is different. Obvious ways include checking available reviews and prices.

More specific ways include checking if the forex broker offers additional tools and resources beyond the basics. For example, Dhan allows forex traders to buy and sell options directly from Advanced Option Chain.

More added benefits include deep integration with TradingView, which allows forex traders to trade directly from charts in Dhan. Please note that the forex broker you choose should be an authorized body as per SEBI norms.

How To Get Started In Currency Trading

After choosing the right forex trading platform, you need to open a forex trading account to buy and sell currency futures and options. You may want to know why you need a merchant account. The logic is simple.

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A trading account acts as an interface that allows you to buy and sell instruments. Without these, you will not be able to trade exchange-traded currency derivatives. Delivery is not allowed for currency derivatives in India.

It just means that demat may not be necessary. However, most brokers offer a two-in-one account, meaning you get a trading and demat account when you opt for the account opening process.

Additionally, a demat account can be useful while trading forex if you want to pledge your shares to get margin. While not all forex trading platforms offer collateral margin benefits for currency trading, Dhan does.

You have chosen a broker and started the process of opening a trading account. Excellent. Now it’s time to submit the documents to complete the KYC process. It is more or less similar to any KYC process you may have gone through.

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You must provide proof of identity and residence, as well as your bank account details. However, there is one more detail you need to provide. Proof of your income. The reason is discipline and logic.

Exchange-traded currency derivatives are leveraged products, meaning you can take margin to trade more than the capital available in your trading account.

After submitting the required document for KYC, the forex trading platform and exchanges will verify your details. You will likely receive an approval/rejection notification and email.

How To Get Started In Currency Trading

Although you can trade currencies on margin, you must add funds to your trading account. This is according to the rules. As per SEBI norms, a user like you has to keep certain percentage of margin in cash.

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The rest of the margin amount can be held, for example, in the form of pledged shares. The process for funding your trading account can vary from broker to broker. But you can widely use Netbanking or Google Pay.

Once you’ve gotten this far, you’re ready to trade forex. India’s forex trading market allows you to explore synthetic positions in forex pairs. A synthetic position is a fancy way of saying futures or options positions.

As you now know, forex currency pairs have a base currency and a quote currency. The quote currency is used to obtain units of the base currency.

See attached USD-INR screenshot below. We will use it to explain the concept of currency pairs.

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You can see three important things in the screenshot. The first is the name of the currency pair: USD-INR. The second is the exchange rate: 79.5400. This means that 79.5400 INR can buy you 1 USD.

The third is the fact that there are four digits after the decimal. Generally, stock prices are displayed to the second decimal point. Forex prices are displayed to four decimal places and it even has a name “Pips”.

You can read about pips and how it affects currency pairs here: Guide to Forex Trading in India: Learn Forex Trading

How To Get Started In Currency Trading

Additionally, forex traders are known to use several different strategies to get the most out of their futures or options positions. Therefore, the question “how to start forex trading” can have many answers.

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RBI and SEBI allow Indian traders to deal in exchange-traded currency derivatives on recognized exchanges between 9.00 am and 7.30 pm. You can start forex trading in India by choosing a SEBI authorized broker.

Every broker has a KYC process that you must go through to open a forex trading account. The process is relatively simple and requires you to upload proof of income, proof of address and proof of identity.

Once all this is done and KYC is approved, you can start trading currency futures and options. These steps constitute a simple answer on how to start forex trading in India!

Forex trading can be a potential way to build wealth, but it also carries significant risk. Remember to assess your risk profile, financial goals, strategies and more before trading and don’t assume forex is profitable! We believe you will be interested in these forex trading stories:

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Yes, you can open a forex trading account in India through a SEBI approved broker like Dhan. Trading derivatives for currency pairs is legal in India and having a forex trading account allows you to buy and sell futures and options on USD-INR, EUR-INR, GBP-INR, JPY-INR and more!

No, you will not be able to trade forex pairs without an authorized broker in India. According to SEBI regulations, Indian traders can buy and sell forex derivatives on authorized exchanges only through approved brokers. Dhan is a certified forex broker that allows you to trade currency futures and options.

You don’t necessarily need a demat account to trade currency pairs, as forex trading in India is settled in cash in INR, meaning the base currency will not be delivered to you under any circumstances. You must open a trading account to buy and sell currency derivatives.

How To Get Started In Currency Trading

Disclaimer: This should not be construed as investment advice. Trading and investing in the securities market carries risk. Please do your own due diligence or consult with a trained financial professional before investing. Getting started in the forex market can often result in a life cycle that involves diving in head first, giving up or taking a step back to do more research and open a demo. score for experience. From there, new traders can feel more confident about opening another live account, finding more success and taking a loss or profit. That is why it is important to build a framework for trading in the forex markets, which we describe below.

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Why do we focus on medium term forex trading and not long or short term strategies? To answer this question, let’s take a look at the comparison chart below:

A trader who tries to open and close trades within minutes, often using small price movements with large amounts of leverage

Large capital and/or risk requirements and spread costs are more significant due to the large amount of leverage needed to profit from such small moves.

A trader usually wants to hold a position for one or more days, often using opportunistic technical situations.

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Now, you’ll see that both short-term and long-term traders require large amounts of capital – the former to build up enough leverage, the latter to cover volatility. Although these two types of traders exist in the market, they are made up of high net worth individuals, asset managers or larger institutional investors. For these reasons, retail traders will succeed using a medium-term strategy.

The framework covered in this article will focus on one central concept: betting. To do this, we will look at different methods over several timeframes to determine if a particular trade is worth buying. However, keep in mind that this is not intended

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