Are you willing to learn about the concept of currency trading in India? Then you have come to the right place. Today in this article we will guide you in detail about the concept of currency trading in India, also known as the forex exchange market or forex market.
The exchange of currency is carried out on a currency or foreign exchange market, where local currencies are traded for purchase and sale. Currency trading in India takes place by means of currency derivatives such as futures and options that are available on authorised exchanges. There are no central locations for the currency market, which links businesses across the world via electronic means. Currency transactions take place daily, 24 hours a day, 5 days a week, all over the world.
For better understanding, let’s move ahead and learn more about it.
What is currency trading?
Forex trading, or foreign currency trading, is the purchase and sale of currencies in pairs. For example, the US dollar is worth 79.37 Indian rupees. If you expect it to appreciate against the rupee, you may buying a larger sum of dollars. By contrast, if you think the dollar is going to depreciate against the rupee, then you’ll be buying Indian currency. For example, you must always select a pair of currencies, such as INR or USD.
Trading in the currency takes place in pairs, and pairing is applied to both the purchaser and the seller of the currency. The trade value is fixed by the value of a currency with respect to another currency, i.e., exchange rates.
To determine the prior nature of a currency transaction, appropriate symbols should be used. For example, INR is the Indian rupee, and USD is the United States dollar. If you want to buy Indian currency against American dollars, the transaction will be marked as INR/$USD.
How Does Currency Trading Operate In India?
The following steps mentioned below give information regarding how forex trading works in India.
- Step 1: Open a trading account.
In order to create a forex trading account, you should carefully select a broker authorised by SEBI. When selecting a broker, it is important to take several factors into account, such as reputation, technology, ease of use, leverage offered, fees and commissions, etc.
- Step 2: Do your research.
Knowing when to purchase and when to sell is essential for analysing the market. It is necessary to carry out research with a high degree of care.
- Step 3:Analyse your skills.
You can test your skills with virtual funds in a demo account before you start the actual business. This will allow you to be a trader and fix your mistakes.
- Step 4: Start your investment
Before you get used to it, try trading a small amount. Maintaining discipline and developing a trading strategy for success are necessary.
Various Currency Pairs Are Used In India
In India, here are the top commonly traded currencies.
- US DollarUSD: The world’s most traded currency, also one with a high degree of liquidity.
- EuroEUR: The second most traded currency that is widely used in the euro area.
- GBP sterling: An extremely strong currency with a lot of liquidity.
- Japan YenJPY: The most traded currency in Asia, which reflects the strength of Japanese manufacturing exports.
- Swiss FrancCHF: CHF is considered a safe haven in currency trading due to its negative correlation with CAD, AUD, and US government yields.
In today’s time, you can do any kind of trading with the help of online stock trading apps available on the Play Store or Apple Store. One of the best apps traders can go ahead with is the Kotak Stock app. Under the Kotak Free Trade plan, you’ll pay no brokerage fee for any currency intraday trade. At zero transaction costs, you have the freedom to trade in a currency contract.
It’s a smartphone trading application named Kotak Stock Trader. All Kotak online business customers and noncustomers will be able to take advantage of this service at no cost. The app may be downloaded by noncustomers, who sign on as guest users and are able to use all of its features. The Kotak StockTrader Mobile Trading software makes it possible to track the markets, provide real-time quotes, help traders make a watchlist, and view an intraday chart. The Kotak Mobile Trade App has the following key features:
Click here – What Is Accumulated Profit?
Final Words
Finally, the foreign exchange market is one of only a few markets where all types of investors can trade. You have to be able to predict movements of the exchange rate in order to make successful currency trading profits. But you must be aware of the risk and leverage inherent in this market before jumping into foreign exchange trading.
