Forex Trading in India

Contributor, Benzinga

Want to jump straight to the answer? The best forex broker for most people is definitely FOREX.com or CedarFX.

India is a land of diverse cultures and a growing economy. Foreign exchange (forex) trading in India is an emerging platform with exciting opportunities. 

Be part of action and learn to trade forex with our guide to forex in India. 

Get Started with Forex in India

Forex trading is not entirely legal in India. You are only allowed to trade currency pairs that include the Indian Rupee (INR). The primary reason behind this restriction is that the INR is weak against the U.S. dollar (USD). Traders from India who want to buy the USD have to purchase it from the Central Bank of India. 

As a citizen of India, you can trade forex on the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and Metropolitan Stock Exchange (MSE). Established in 1992, the Securities and Exchange Board of India (SEBI) was set up to monitor and regulate forex activity in India. It is an autonomous authority that protects forex securities issuers, investors and forex-related agencies. Forex brokers and stock exchanges must be licensed by SEBI to operate within India.  

Ready to get serious about trading forex in India? Here’s a step-by-step guide to help you get started. 

Step 1: Get a digital device with fast Internet connectivity. 

You can use your desktop, laptop, tablet or smartphone to trade forex. The value of the currency pairs listed on the stock exchanges frequently fluctuate. A personal device to constantly track these changes is essential to successful forex trading. 

Step 2: Find an online forex broker. 

There are several forex brokers available online. Go through each broker’s website and choose 1 that allows you to trade INR currency pairs. 

Be sure to check the footer of every website for information on the regulatory bodies. If you can’t find any such information from the Securities Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA) or similar regulatory bodies, the broker can’t be trusted. 

get started securely through IFC Markets’s website
Account Minimum
Micro Accounts: $1
Standard Accounts: $1,000
Pairs Offered
49
1 Minute Review

Founded in 2006, IFC Markets is a popular forex and contracts for difference (CFD) broker that provides high-quality trading services to over 185,000 clients from more than 80 countries. The broker has oversight from the British Virgin Islands Financial Services Commission (BVI FSC) as well as the Labuan Financial Services Authority (LFSA) in Malaysia. 

IFC Markets offers trading in over 600 financial instruments including forex, stocks, indices, commodities, cryptocurrency futures and synthetic assets through excellent trading platforms: MetaTrader 4, MetaTrader 5 and its own developed NetTradeX advanced platform. IFC Markets also gives clients unlimited trading opportunities via its unique GeWorko Portfolio Quoting Method that lets traders create their own synthetic instruments or choose from PCI Library, synthetic instruments created by professionals. 

Best For
  • Traders who want to create their own trading instruments
  • Intraday and mid-term traders
  • Small volume traders
  • Trading platforms variety
Pros
  • The GeWorko Portfolio Quoting Method lets you create synthetic assets
  • 15 years experience in the business
  • Highly rated by clients with 8 recent international awards
  • Insured by AIG Europe Ltd.
Cons
  • Only regulated by 2 minor agencies
  • Not available to traders in the U.S., Japan and Russia
get started securely through FOREX.com’s website
Account Minimum
$100
Pairs Offered
80+
1 Minute Review

FOREX.com is a one-stop shop for forex traders. With a massive range of tradable currencies, low account minimums and an impressive trading platform, FOREX.com is an excellent choice for brokers searching for a home base for their currency trading. New traders and seasoned veterans alike will love FOREX.com’s extensive education and research center that provides free, informative forex trading courses at multiple skill levels. While FOREX.com is impressive, remember that it isn’t a standard broker.

Best For
  • MetaTrader 4 users
  • Beginner forex traders
  • Active forex traders
Pros
  • Impressive, easy-to-navigate platform
  • Wide range of education and research tools
  • Access to over 80 currencies to buy and sell
  • Leverage available up to 50:1
Cons
  • Cannot buy and sell other securities (like stocks and bonds)
get started securely through eToro’s website
Disclosure: eToro USA LLC; Investments are subject to market risk, including the possible loss of principal.
Account Minimum
$50 USD
Pairs Offered
47
1 Minute Review

Though Australian and British traders might know eToro for its easy stock and mobile trading, the broker is now expanding into the United States with cryptocurrency trading. U.S. traders can begin buying and selling both major cryptocurrencies (like Bitcoin and Ethereum) as well as smaller names (like Tron Coin and Stellar Lumens).

eToro offers traders the opportunity to invest their assets into premade portfolios or cryptocurrencies, similar to services offered by robo-advisors through traditional brokers. Though eToro isn’t a one-stop-shop for everything an investor needs, its easy-to-use platform and low spreads is a great way to enter the cryptocurrency market.

Best For
  • International Forex/CFD Traders
  • New cryptocurrency traders looking for an easy-to-use platform
  • Traders who want to buy and sell cryptocurrencies on-the-go
Pros
  • Simple platform that is easy to master
  • CopyTrader feature that allows new traders to copy the same strategies used by professionals
  • Virtual dummy account that gives you $100,000 to practice trades
Cons
  • U.S. traders currently limited to cryptocurrencies
  • Only 15 major coins available to trade
Get started securely through AvaTrade’s website
Account Minimum
100 EURO
Pairs Offered
50+
1 Minute Review

A fully regulated broker with a presence in Europe, South Africa, the Middle East, British Virgin Islands, Australia and Japan, Avatrade deals with mainly forex and CFDs on stocks, commodities, indexes, forex, cryptocurrencies, etc. This brokerage is headquartered in Dublin, Ireland and began offering its services in 2006. It offers multiple trading platforms and earns mainly through spreads.

Best For
  • Beginners
  • Advanced traders
  • Traders looking for a well-diversified portfolio
Pros
  • Controlled by regulatory agencies of multiple countries
  • Choice offered in terms of trading platforms
  • Support available in 14 languages and trading platforms in 20 languages
  • Practice/demo account available for trying out
  • Breadth of trading assets
Cons
  • Does not accept customers from the U.S. as it isn’t regulated in the U.S.
  • Transferring funds to the account may take up to five days; withdrawals could take up to 10 days

Step 3: Sign-up for an account. 

You can open a new account with the forex broker on its website. Some forex brokers require a minimum amount of deposit to open an account. These brokers also offer different kinds of accounts based on your financial goals. Choose the 1 that’s right for you. 

Step 4: Transfer funds to your account.

Once you’ve signed up for an account, you need to transfer funds to start trading forex. Depending on the broker you’ve chosen, you can choose your native currency and fund your account using several options. Generally, these funding options include bank transfers, wire transfers and debit cards. 

Step 5: Download a forex trading platform.

You need to download the forex trading platform on your computer or smartphone. Take the time to customize the look and feel of the platform to help you maximize forex trading opportunities. 

Step 6: Begin your forex trading journey. 

Before you start trading forex, you might want to run a few demos using virtual money. These demos can help you get used to the interface of the forex broker without conceding unnecessary losses. After you feel confident using the platform, you can start trading forex using real money.

India Forex Trading Strategies

Forex traders rely on certain basic strategies to make a profit on international markets. These forex trading strategies are easy to learn but difficult to master. Take a look at some of the major forex trading strategies. 

Scalping

Scalping is a forex trading strategy that involves making small profits with multiple trades. You can set the entry and exit positions with minor changes in the currencies to achieve low margins. Scalping needs precise execution to make the most of your trades. 

These are short-term trades that can last anywhere between 1 to 60 minutes. Being well-informed about currency trends is crucial to successful scalping. 

Day trading

As the name suggests, day trading involves opening and closing a trade on the same day. These trades can take place anywhere between a few minutes to a couple of hours. This way you can avoid running through unprecedented losses due to overnight price volatility. 

If you’re new to forex trading, day trading is a simple and straightforward method to start earning. It can limit your risk while improving your chances of profitability.  

Swing trading

Swing trading is a strategy that involves trading forex currencies over a day or a week. This method gives you plenty of time to deflect daily ups and downs in the value of currency pairs. You can skip through needless stop losses along the way with this medium-term forex trading strategy. 

Position trading

Position trading is a strategy that involves holding your trade positions open for the long term. These trades can take place anywhere between a week to several months or even years. This method lets you take advantage of major shifts in the value of currency pairs without stressing over micro changes in the market. 

You can set the entry and exit positions for lengthier durations with position trading. Keeping a watchful eye over current events and socio-economic policies that affect the world at large is key to making this type of trading work. You can casually sign-in to your account once or twice a week. 

Range trading

Range trading is a strategy that involves predictable price movements of currency pairs. This method relies on historical performance data of currency pairs to identify repeating patterns of lows and highs. 

Based on the financial data, you can set a wider entry and exit position to capitalize on previous price trends. With the calculated risks involved, it is a safer alternative to day trading.

Forex Trading Example in India

Let’s say the USD/INR is trading at 74.6350. If you’re expecting the value of USD to rise in a few hours, you can buy 100,000 units of USD. In this case, you’ll need 7,463,500 INR deposited in your account to complete the transaction. 

In 3 hours, the value of the U.S. dollar against the Indian Rupee rises to 75.0000. You can immediately sell the $100,000 you bought and make a profit of 36,500 INR (7,500,000 – 7,463,500) within a single day.  

Making Money with Forex in India

The biggest hurdle you’ll face when trading Indian forex is the limited number of foreign currencies. Indian residents can only trade forex pairs with the INR in it. But the USD/INR is a popular currency pair with an attractive return rate. 

Historically, the USD has been proven to grow stronger in value over the years. Considering the recent performance, the 52-week low for the USD is 68.2900 while the 52-week high is 76.9163. You can leverage the broad range of price movements to make tremendous profits in the short and long-term. 

Forex Terminology

Millions of people trade forex every day. For successful forex trading, learn these basic terms before you get started.

Pip: the smallest unit of price movement in a currency pair. Forex pairs are usually listed to the 4th decimal point. For instance, if the USD/INR has moved from 74.6535 to 74.6545, it is considered a rise of 10 pips. 

Lot size: the total number of currency units bought or sold. 100,000 units is the standard lot size but you can trade lesser units as well. 

Orders: an order lets you execute the trade. For instance, if you want to buy 100 USD/INR, you execute a buy order. Similarly, if you want to sell 100 USD/INR, you execute a sell order. There are different types of orders to help you minimize losses and maximize profits. 

Calls: a call is sent out by your online broker when your trade positions need additional funding to be maintained. You should constantly check your account for any calls you may have received to avoid further losses. 

Trade Forex in India

Indian forex is an untapped market with great potential. INR currencies pairs such as the USD/INR and EUR/INR can offer a spike of up to 1,000 pips within a few weeks. 

Trading Indian forex can reward your patience with profitable returns in the long run. 

Frequently Asked Questions

Q

Who regulates forex trading in India?

1
Who regulates forex trading in India?
asked
A
1

The SEBI is responsible for regulating forex, brokers and protecting investors.

answered
Q

What are the best online forex brokers in India?

1
What are the best online forex brokers in India?
asked
A
1

There are several to include Pepperstone, Forex.com and etoro. 

answered

Get a Forex Pro on Your Side

FOREX.com, registered with the Commodity Futures Trading Commission (CFTC), lets you trade a wide range of forex markets plus spot metals with low pricing and fast, quality execution on every trade. 

You can also tap into:

  • EUR/USD as low as 0.2 with fixed $5 commissions per 100,000
  • Powerful, purpose-built currency trading platforms
  • Monthly cash rebates of up to $9 per million dollars traded with FOREX.com’s Active Trader Program

Learn more about FOREX.com’s low pricing and how you can get started trading with FOREX.com.