Currency Trading in India -Trading Tips

Currency trading in India is quite new but also an appealing investment option. Even though the authorities have put in place severe restrictions on this activity, trading in the currency market is legal in the country, and it is attracting a growing number of people.


Forex currency trading in India – Forex regulations

The Indian government has put in place severe restrictions on how individuals can transact in the Forex market. Generally speaking, buying or selling foreign currencies is a legal activity as long as the transactions are only for pairs that include the INR.

The crucial piece of legislation regarding the foreign exchange market is the Foreign Exchange Management Act 1999 (FEMA). It was passed by the Indian Parliament and replaced the Foreign Exchange Regulation Act (FERA), a law of 1973 that prohibited transactions related to the Forex market. The adopted law was in line with the government’s liberalization policies and in particular, facilitated foreign transactions.

Choosing a Forex broker in India

The broker you choose is one of the most important decisions to make for every Forex trader. There are many choices, but you have to be cautious. Look for the broker with the best customer support in your native language. Also, be sure to find those who offer trading on a demo account before investing real money. You need to learn and understand the way the market works before venturing into real Forex trading.

Traders should ensure that they are trading through Indian exchanges and with the help of licensed brokers. The exchanges that offer foreign exchange instruments are BSE (formerly Bombay Stock Exchange), MCX-SX, which stands for Metropolitan Stock Exchange, and of course the National Stock Exchange of India Ltd. (NSE). Overall, individual traders in India can trade currency options (USD / INR option contracts) and currency futures.


Indian financial regulatory authorities

currency trading in india, Currency Trading in India – Trading Tips
Reserve Bank of India (RBI)

Several central authorities regulate the financial markets and all foreign exchange activities that take place in India. One of these is the Reserve Bank of India (RBI), which as the country’s central bank is responsible for issuing and supplying Indian rupees. It regulates the entire Indian banking sector, including all banks’ commercial and non-bank financial corporations. Its main objective is to guarantee the monetary stability of the country.

The main regulator of the foreign exchange market and securities in India is, however, the Securities and Exchange Board of India (SEBI). The agency was created in 1988. But it was not until 1992 that it received official status following the adoption of the SEBI law. When she received the statutory powers in 1992, it became an autonomous authority that regulates and protects the interests of issuers, investors, and intermediaries.


Popular trading platforms in India

One of the most important things to search for when choosing a good online broker for Forex trading is the platform offered by the brokers. The choice of software is essential because each platform has its specific characteristics and functions. Some types of software have been designed specifically for trading currency pairs, while others are suitable for stocks or futures. Some trading systems are state of the art but somewhat complicated, meeting the needs of knowledgeable traders.

currency trading in india, Currency Trading in India – Trading Tips
Most Indian investors interested in currency pairs tend to execute their trades through MetaTrader 4.

However, the vast majority of Forex traders prefer to use MetaTrader 4. It’s a type of software from 2005 and developed by MetaQuotes Software. It currently serves around 90% of Forex traders worldwide. India is no exception. Most Indian investors interested in currency pairs tend to execute their trades through MetaTrader 4.

It’s an electronic platform that supports all currency pairs, commodities, stocks, and futures. It includes 30 integrated technical indicators, 24 graphic objects, customization tools, tutorials, and information flows. Also, the platform is available for free to traders since their brokers provide it. Of course, this isn’t the only good software for Forex currency trading in India. There are plenty of other options out there, including cTrader, NinjaTrader, ZuluTrade, and many more.


Mobile foreign currency trading in India

The best tool to access Forex trading in India anytime and anywhere is probably the mobile phone. It allows investors to keep abreast of economic news and market trends and helps them determine their next move. Since they can follow the markets from their phones, traders are more likely to be prepared for what will happen even within hours.

Taking into account that the country is experiencing a huge increase in the use of mobile phones due to the affordability of mobile devices and Internet subscriptions the majority of Forex brokers enable user-friendly and transparent applications that users can download for free. If you are about to start a currency trading exchange in India, do your homework by testing these platforms on a demo account from your phone and see what matches best your affinities.

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