Forex Trading in India
Forex has become one of the most popular forms of trading across the globe over the past few years, and India is no exception. Considering it is easy to access and learn and can be used as a hedge against inflation, it is no surprise that new people are getting into forex every day.
Considering India’s economy is going from strength to strength, its people are looking for ways to grow their incomes in new ways and use this economic strength to their advantage.
Is Forex Popular in India?
Forex trading is popular in many parts of the world and is slowly taking hold in India. However, it is highly regulated, and there are only a few currency pairs to choose from. This is due to the Indian government limiting trading pairs only to currencies that the Indian rupee is paired with.
While this limits the options available, Indian traders still have access to the biggest and best currencies in the world. But, once again, they are unable to trade the best pairings, such as the US dollar and UK pound, US dollar and euro, etc.
Which Currencies are Traded in India?
As mentioned, currency options are very limited in India. However, Indian traders can still take advantage of the strength of the biggest and best currencies in the world.
The US dollar is the king of currencies. It is the currency that is traded the most, and the most traded pairs all include the dollar. Many central banks and economies also keep stockpiles of US dollars, and many of them peg their currency to it as well.
The US dollar also has considerable strength over the rupee, meaning Indian investors are able to fully maximise their rupees when trading.
Another forex staple that is available in India is the euro. The euro is the second-most traded currency in the world, and the euro/US dollar pairing is one of the most popular amongst forex traders. The strength of the Eurozone and the multiple countries and economies that form part of it makes it an exceptionally appealing trade and investment choice.
The British pound is popular amongst forex traders due to its strength and tremendous liquidity. Considering liquidity is the main driver behind forex’s popularity, it’s unsurprising that a highly liquid currency is so popular.
When it comes to Asian currencies, the yen is still at the top of the mountain. While a currency such as the Chinese yuan is showing great potential, the yen is still superior in terms of forex and trading currencies.
The Canadian dollar may not be the first currency that comes to mind regarding worldwide strength, but it is one of the most important commodity currencies due to its ties with crude oil. It is also a currency with close ties to the US dollar, further solidifying its strength.
Another strong commodity currency is the Australian dollar. It is the strongest currency in Oceania, and its ties with gold and silver make it one of the highest-yielding currencies you can buy and sell.
The Swiss franc has always been seen as a “safe haven” of sorts for forex traders. It offers a strong yield while seeing some of the same benefits the euro does without the same drawbacks.
What to Remember When Trading Forex in India
If you are a forex trader in India, there are a few things you need to remember before you start your investment and trading journey.
As mentioned already, there are very limited trading options available. While this can make pair selections much easier, you won’t have the same range and portfolio diversification as other traders around the world do.
What this means is that you will need to be slightly more cautious with your decisions, as shifts in the US dollar, British pound, or euro, in particular, will have unpredictable repercussions on your investments.
Use an Approved Broker
Due to the limited nature of forex trading in India, one of the most vital things you can do is to use an approved broker. The laws imposed on forex have led to the rise of illegal operations, and while they may seem like they make things easier, avoid them at all costs.
The forex market in India is strong; there is no need to use any dodgy outfits when there are several perfectly legal ones to be found across the country.
Part of your strategy needs to include maximising the limited options you may have. It is essential to stay on top of the global markets, especially the US, European, and British economies.
As you can see, the options may be limited, but they are incredibly strong, meaning you can still invest incredibly well in what is available with forex trading.