Forex (FX) is not only the world’s largest financial market, it is also a potentially high-profit activity so many people take advantage of. With as little as an internet connection, one can make money from anywhere in the world, at any time of the day, following quotes and opening trades. Find out why you can’t miss the opportunity to become a forex trader from this article.
Why Trade Forex in India
There are a few reasons why people turn to forex trading rather than any other financial market. Let’s take a look at some of them:
- Forex is the largest financial market in the world. There is no other market with such a large turnover. Its main currency pairs are highly liquid, which means there is no problem buying or selling them at any time of the day.
- One doesn’t have to be a certified trader or have any formal education to enter the market. With the development of online brokerage systems, anyone older than 18 can open a trading account by completing a simple ID verification process.
- Forex has a very low entry deposit requirement. Even $1 is enough to place a trade. This makes it very accessible to practically anyone willing to try.
- In forex, you can profit from both rising and falling currency prices. It is possible due to the fact that one can sell a currency pair when it’s about to drop in price and profit from the rise of a quoted currency.
- Forex functions 24 hours a day from Monday to Friday. It enables traders to make money practically any time of the day.
- Professional forex traders can take advantage of high leverage (up to 1:3000) and increase their profits while having limited funds at their disposal. Traders can choose the leverage level depending on their skills and the riskiness of their strategy.
Read more: Forex Trading for Beginners in 2021
How are Currencies Traded
Since buying/selling a currency implies paying for it with another currency, currencies are always traded in pairs. So what they trade in the FX market is called currency pairs. There are many currency pairs, for example, EUR/USD (Euro/US dollar), USD/INR (US dollar/Indian rupee), etc. Each of them consists of two currencies: a base currency (the first element of the pair) and a quoted currency (the second one).
A base currency is the one you buy when you place a buy order or sell when you place a sell order. A quoted currency is the one you use to pay for the base currency or the one you get when selling a base currency. The desired outcome of a trade is buying at the lowest possible price and selling at the highest possible price. The difference between these two prices comprises a trader’s profit.
Suppose you think the euro will rise in price in relation to the dollar. Then you decide to buy EUR/USD. It means you purchase euro (base currency) paying for it in dollars (quoted currency). If the euro grows, and you sell EUR/USD at its peak price, you gain profit from the trade. If contrary to your prediction, the price of the euro declines, the trade is unsuccessful, and you lose money. It is important to note that when deciding to open a trade, traders don’t simply guess. They do a holistic analysis to determine the future direction of the price. This analysis may include the use of technical indicators and following macroeconomic news that can affect currency quotes.
Read more: Technical analysis for beginners
Where Can I Trade Forex in India?
Currencies are traded over the counter (OTC) through an online brokerage system. To become a trader, one needs to sign up with a broker and open a trading account. There is no need to go through formal training or receiving a license to enter the market. To follow quotations and open orders, traders use trading terminals like MetaTrader 4 or MetaTrader 5. A trading terminal is software that provides access to the quotes and enables opening and closing the trades.
How to Open a Forex Account and Start Trading in India
Start trading currencies by registering with a broker and opening a trading account. Today practically anyone over the age of 18 can open a trading account with an online broker. Follow the link to open your personal trading account. To do it, you need to fill in the form with your data and submit it. After that, a brief verification process can be required. Once you complete it, you can make a deposit and place your first trade.
Read more: Best Forex Trading Books For Beginners
Forex Market Operation Time in India
The forex market operates from 12:00 am on Monday to 3:30 am (IST) on Saturday. This schedule is predetermined by the fact that there is no universal center for all money exchange. There are multiple centers of commerce and trading all around the world. The most significant ones in terms of trading volume are Frankfurt, London, and New York. Thus, the most active forex trading takes place when both the European and the North American trading sessions are open. It is between 5:30 pm and 8:30 pm (IST). It may serve you well if you organize your trading activities around that time, especially if you trade such currency pairs as EUR/USD and GBP/USD.
Read more: The Best Time to Trade Forex in India
Forex trading offers high profits to people who are ready to give it time and effort. One can open a trading account and profit from the currency market from home. To start trading, it is required to open an account with a broker and make a deposit. Those who are not ready to invest money in trading can open a teaching (demo) account, which has the same functionality as a standard account, except the ability to withdraw profit. The aim of this account type is to help newbies learn the basics of trading, not to make money. Learn more about forex from our articles.
Try your hand at currency trading by opening a demo account on Justforex. It’s a quick and risk-free way to master trading in the most liquid financial market. A practice account will help you learn trading basics and develop a strategy before investing money. Start trading today to take care of your future tomorrow.