New to Forex Trading in India? Here's How You Can Start and Maximize

Want to begin your forex trading journey in India, seeing its exponential growth potential? Cool! It indeed is a market that can raise your invested capital exponentially, provided you trade properly and choose the right forex brokerage partner in your growth journey. While there are monumental returns on offer, there are risks on the other side. Try to master the risk management techniques to ensure your journey remains largely rewarding. In this article, we have prepared a guide on which broker is best for forex trading in India, besides several other critical details. Take a look at it and implement it when the time comes.

A Note on Forex Trading in India

Forex trading investments mean exchanging one currency for another. Simply put, forex traders need to sell one currency to buy another. The trading happens for all five days from Monday to Friday. As a trader, you speculate on the price direction of the currency. The more correctly you speculate, the greater the chances of earning more. This is where you need to be aware of the effects that different political, economic and other developments have on your trading. The best part, you can operate the trading software from the comfort of your home as theres no centralized network.

Tips to Get Started with Forex Trading Investments in India

Choose a Reputable and Regulated Forex Broker

Indias foreign currency market undergoes tight regulations to ensure information transparency and investor safety. However, despite these, many unregulated forex brokers find shelter and defraud investors using their malicious tactics. Choosing the regulated forex broker that has delivered impeccable customer service remains the key.

So, if you search for - which broker is best for forex trading in India - you will find numerous results online. Not all of them may be regulated. So, you can rely on WikiFX, the preferred broker regulatory information app. The app will show you a list of regulated and unregulated forex brokers.

Never Fall to the ‘Guaranteed Return’ Lure

As you are new to forex trading investments in India, you might get tempted by guaranteed return promises from bogus forex brokers. Remember, there are no guaranteed returns on forex investments. They actually fluctuate based on the trading volume, economic updates, the geopolitical scenario and other factors. There have been many forex investment scams with these promises. We sincerely hope you dont become a victim.

Approved Currency Pairs in India

Vindicating our above point of tight regulation, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI) monitor forex events like a hawkeye. They don‘t hesitate to raise red flags the moment they find a semblance of irregularity. As part of a tight measure, the RBI has allowed India’s forex traders to invest in four currency pairs, with the rupee being in each of them. The pairs allowed are INR/USD, INR/EUR, INR/GBP and INR/JPY.

INR - Indian National Rupee

USD - US Dollar

EUR - Euro

GBP - Great Britain Pound

JPY - Japanese Yen

If you trade in currency pairs other than the ones mentioned above, you will be subject to legal punishment for forex trading in India.

You can trade in these currency pairs only on approved exchanges such as the Bombay Stock Exchange (BSE), the National Stock Exchange, and the Metropolitan Exchange of India Ltd. (MSE).

Also, forex traders in India are mandated to open a forex trading account with a broker registered under SEBI.

Be Aware of These Forex Trading Strategies

For a successful forex trading journey, it is important to be aware of the various strategies first to deal with market volatility. Here are some strategies you should consider.

Day Trading - Here, you open and close trades within the same day to prevent overnight risk exposure.

Swing Trading - Here, traders buy the instrument and hold it for several days or weeks to make the most of market fluctuations.

Scalping Trading - It is a strategy where traders initiate many small trades quickly to benefit from small price movements.

As each strategy has inherent risks and advantages, you should select the one that aligns with your risk tolerance and investment goals.

Consider Leverage and Stop-loss Options

Forex trading is all about leverage that traders avail of to control larger positions with a comparatively small capital amount. Its a loan you receive from the broker. Retail forex trading leverage is capped to 1:5o for major currency pairs in India. Minor pairs contend with the 1:20 limit. This helps manage risk and ensure traders are not exposed to much greater risks.

You can also use tools such as stop-loss orders to limit your exposure. Stop-loss orders help you set a loss point beyond which you cant trade. Simply put, with a stop-loss order, you instruct the broker to sell (to reduce losses on long positions) or buy (to reduce losses on short positions). Should your price speculation go wrong owing to uncertain events, you will lose only to the stop-loss order point.

Frequently Asked Questions on Forex Trading in India

Which Broker is Best for Forex Trading in India?

The list is endless. You can find them on WikiFX - a forex broker regulation inquiry app - that shares transparent information about the brokers.

What if I Choose an Unregulated Forex Broker in India?

This will not only increase the possibility of forex investment scams but also make you liable for legal punishment.

Who Regulates Forex Trading in India?

The Reserve Bank of India regulates forex trading in India as per the Foreign Exchange Management Act (FEMA) regulations, 1999.

How to Open a Forex Trading Account in India?

You need to choose an SEBI-registered forex broker, do the KYC process (providing personal details and uploading documents such as PAN and Aadhaar), and link your bank account. Deposit in your trading account using Internet banking or UPI.

Check whats trending on Forex by downloading the WikiFX App.

Were waiting for you to join us on Telegram. Scan to join.