What is forex trading and how does it works

What is forex trading and how does it works?

Interested to do forex trading in India? The other case is also possible where you don’t know on how to carry forex trading in India legally? However foreign exchange market is one of the largest decentralized global market. It is the place where every currency is traded across the world.

As you might know that currency trading in India is one of the most fluid market in the world. Apart from that it’s a big question if forex trading is legal in India or not? This is why we are here today. You are going to find out what is forex trading and how does it work, just please keep following this one.


What exactly is forex trading?


Forex also known as (FX) which is popular as foreign exchange or even as currency trading. This term is a global market which is decentralized and all the currencies of different economies are tradee, sold or even bought.

The forex market is one of the largest and liquid market across the world. This place face an average trade of $5 trillion everyday. Hence, there’s even no comparison of forex trade with stock market.

In simple terms, forex trading is the transaction of buying and selling of a currency in exchange of another currency. However, if you ever had a trip outside of your country then you have made forex transaction.

For example- When you went to France, you had to convert your Rupees (INR) to Euros. So, when did the conversion, you made tha forex transaction. However, the supply and demand of Euros at that particular time decided the amount of Euros you will get in exchange of your Rupees.

Not only this, but the exchange rate of currencies is highly liquid and fluctuates every now and then. To understand this phenomenon you will need to have a broad knowledge and an outstanding skill.


The best time to buy


You can get a best time to buy or long position when a trader believe that the value of a specific base currency is going to increase.


The best time to sell


You can get a best time to sell or short position when a trader believe that the value of any specific base currency is going to decrease.


When is the best time to trade currencies?


Forex market is one of the unique market among world’s financial markets because it’s open for 24 hours a day and 5 days in a week.


Strategies for Forex Trading in India


As you know about the liquidity in terms of daily trading volume, you must have known that it’s easy to loose money than actually making it. Here are some of the strategies to follow for safe trading in India.


Price Action Strategy


It is one of the most common strategy which is employed in Forex trading. It is completely based on the bulls and bears of the price action in currency trading and it is known as the most useful strategy among all kinds of market conditions.


Trend trading


This is the type of strategy in which traders are needed to have an eye on movement of currencies. This is important because it will help them to decide the entry point.

There are many if the tools such as moving average, stochastic, relative strength indicator, etf to help traders analyze the market.


Counter Trend trading


This is the strategy where a trade is made against the current trend with the aim to have some small gain. This gain depend on the prediction that the trend is reserved.


Forex trading is allowed in India?


Yes, Forex trading is legal and allowed in India. Not only this, but currency trading is a subject fo struct regulatory restrictions in India. If you want to trade currency then you will need to contact a broker in India.


What is punishment for forex trading in India?


There’s no punishment for forex trading in India. However, there is a big punishment for misusing USDOLLERS from RBI reserves.


How much forex traders make a day?


If you have an account balance of $5000, then you are going to put your $50 at stake for everyday. However, traders can make upto an average profit of $100+ on a daily basis.


Can you start forex trading with just $10?


Yes, you can start forex trading with just $10 or even less than that. There are forex brokers who have some minimum amount of deposit requirements to open account. While on the other hand, others have high demands such as $500 to $1000 as well.

Leave a Reply

Your email address will not be published. Required fields are marked *