Forex trading is a relatively new investment concept in India. The Reserve Bank of India (RBI) and Securities Exchange Board of India (SEBI) are the central authorities in charge of regulating these types of investments. Always use the Indian rupee as your base currency, and you will be legally protected. Currency pairs, such as US Dollar and INR, UK Pounds and INR or Euro and INR are the type of Forex trades allowed.
While in other countries, forex trading comes with increased flexibility, in India, each aspect should be carefully thought through. You will need to invest through an authorized broker. The forex broker you collaborate with should be registered with Sebi.
Social forex trading allows you to copy the trades of other network users and thus increase the likelihood of successful investments. This can be an appealing approach for beginners, who aren’t exactly sure what trading direction to pursue.
Despite the attractive nature of copy trading, considering the existing restrictions in India, this particular option is even more challenging to get into than regular trades. There are only a small number of social trading brokers that allow you to partake in copy trades in India. Verify the available platforms, make sure they are authorised, and only then reach a decision.
Define your goals and choose a trading style: Try to figure out from the start the ideal trading style for your personality. Because the market is open 24 hours a day, you should think about when you’d be more productive. Some traders deal with the risk profile better during the day, while others function better at night.
Broker scams: Despite the strict forex trading restrictions existing in India, scams still occur—inexperienced and uninformed traders fall prey to them. To avoid putting yourself in that position, do your homework on your broker. Request proof of Sebi authorisation before choosing one platform or another.
Get acquainted with the lingo: There are a few important forex terms you need to know, such as bid and spread. You have plenty of articles online that teach you everything you need to know about forex methodology and terminology, so don’t rush into your first trade before you actually gain some fundamental knowledge in this department.
Keep up with economic fluctuations: In order to actually make money through forex trades, you should be well-acquainted with global economics. Read news on the topic, research international markets, calculate expectancies, keep a record of currency value fluctuations— all in all, always be prepared.
Source: Tax Guru