Forex Trading In India For Beginners

By Author: Avinash Sawant
Total Articles: 5
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If you are a trader already and you come across this web-site first time then I recommend you to first learn about legal illegal forex trading in India which we have already mentioned in our earlier post in
To summarize

• There are two currency trading platforms available in India

o Indian currency trading where you will actually trade into four currency pairs (USDINR, EURINR, JPYINR, GBPINR), which are approved by SEBI+RBI.

o Second one is International currency trading and here you can trade more than 300 currencies that to again 24 hours market. But it’s not approved by SEBI or RBI.

o For those who are really interested to make money from international currency trading from India, there r few brokers with in India who are providing services using third party approach & this is somewhat legal.. But you owing the risk. As in case something happen you will not be able to claim your money back.

o So before starting with Forex market in India please understand the facts clearly & then only start with your trading. If in case you have any doubt feel free to write ...
... me at avinash@forextradehalt.com

Now coming back to the point we have written articles on both Indian currency trading and International currency trading.. Today our focus is for International currency trading Inside out. Even if you are trading in only Indian currency trading this article will help you to understand some of the parameters affecting the market value.

Forex Trading Systems – Inside Out

The forex trading system allows the traders to buy one currency and sell another currency simultaneously. Foreign exchange market allows you to take part in the currency trading game and earn attractive profits by buying and selling currencies.According to the fundamentals of forex trading, a currency should be bought when the value of currency falls and it should be sold off when the value of the currency rises. Any trader needs to know the fundamentals of forex trading before starting the forex trading.

Forex market is the biggest financial market in the world where a transaction worth of more than five trillion dollars take place every day. Let us illustrate the working of forex trading with the help of an example. Suppose you expect that the value of GBP will increase relative to dollar and you buy GBPs with dollar. If the value of GBP increases, you sell the GBPs and get the profit. The first currency in the currency pair is known as the base currency and the second currency is known as the counter currency. The currency pair used for trading is quoted with ‘bid’ and ‘ask’ price. The price of the currency at which the broker wants to buy is known as the ‘bid’ price and the price at which he is willing to sell is known as the ‘ask’ price.

There are more than sixty currency pairs are available in the market to trade on. However, four currency pairs are most commonly used in the forex trading. These are:

• EUR/USD
• GBP/USD
• USD/JPY
• USD/CHF

These four currency pairs generate nearly 80% of the total volume generated in the foreign exchange market. Short-selling is also allowed in the forex market. Short selling means you sell a currency first and then buy it back at a lower price. Since there is no restriction for short-selling therefore you can earn money when the market falls as well as when it rises. Hence forex trading lets you earn money in all directions.

If you want to enter the world of forex then the first important thing is the selection of a reliable broker. Once you have chosen your broker then it is the time to open a demo account. Most of the brokers offer a free trail of their trading platform by using play money. Demo account provides a good opportunity to learn about the market and to make sure that you feel comfortable with the trading tools of your broker.

The next important thing is to use the leverage offered by your broker in a proper way. Although leverage is a useful tool but it can be very dangerous if used wrongly. Most of the brokers offer leverage ranging from 50:1 to 400:1. The higher is the leverage offered by your broker, the lesser is the money needed to put on a large trade. The use of leverage should be done with a lot of care.

Currency trading is a consistent learning experience. Try to learn from your mistakes and do your best to avoid them in the future. This will help you to become a very successful trader.

About Author:
Avinash Sawant is a very renowned author who has been involving in the field of currency trading since a long time. He has also written some of quite laudable articles on Currency Trading and forex trading system.