Becoming a day trader is a hopeful goal for many people in India and other parts of the world.
As people read about foreign exchange, they may want to experience the excitement of buying a currency pair and then watch as its value rises over the next few hours.
Learning how to trade forex has never been easier, as there are countless platforms where you can learn more about the market and understand the specifics of trading.
Anyone in India who wants to buy and sell forex should know that trading is 100 percent legal. You may have to pay modest taxes on your winnings, while you should only use a platform that has an RBI or SEBI issue license from the relevant government agency.
Below is more information on how to start trading forex in India in 2022.
Source: Piggybank
What is Forex Trading?
Before going any further, you must develop a fundamental understanding of forex trading. The concept of trading in the foreign exchange market is that you are buying a specific currency pair, such as the United States dollar and Japanese yen, and then seeing how that pair’s value fluctuates over time.
For instance, if 1 US dollar is 140 Japanese yen when you use your dollars to buy yen, you will then be hoping that the yen begins to gain on the dollar in the coming hours.
If 1 US dollar is priced at 120 Japanese yen in a few hours, and you spent $10 on yen, you could then sell the 1,400 yen that you purchased and buy dollars, which would net you $11.67, or $1.67 in profit on the transaction.
Finding a Reputable Broker
Before you can trade for money on the forex market, you must find a reputable platform that you can use to buy and sell forex. These online platforms or brokers will charge fees, but they also give you easy access to a market that is open nearly 24 hours a day, six days a week.
Choose a platform that has a stellar reputation, can legally operate in your country, and will not charge exorbitant fees. Ensure the platform has a very clear fee structure, as you do not want surprise deductions each time you go to claim a profit on a trade.
Another feature your online platform should offer is a demo account, which allows you to buy and sell forex without using real money. Such an account is crucial for beginners to learn the basics of trading without losing money.
Pick a Trading Strategy
The beauty of the forex market is that you can choose a strategy that aligns with your budget, goals, and personality. There is no superior way to buy and sell currencies in the hopes of making a profit.
Some people choose day trading, as it allows them to make many trades each day with the aim of achieving a modest profit on each translation. Others may prefer making more significant purchases of currencies and then holding onto that currency for a few days or weeks until market conditions are in their favor. Some enjoy short selling as a way to make money in unstable conditions.
Anyone new to trading may want to stick with lower-risk and low-activity strategies. You may buy a modest sum of a currency pair each day and then assess its price every few hours before deciding on when to sell. Such a strategy means you can wet your feet in the forex pool without putting too much time or money on the line.
Learn From Your Mistakes
No one is a perfect trader, least of all in the forex market. You should enter this venture with the expectation that you will lose money on some trades, just as you will make a profit on others.
What separates average and great forex traders is learning why a trade went against you and how you can react to a similar situation in the future to avoid depleting your money again.
Start Your Forex Journey Slowly
Financial market enthusiasts or quick learners may be eager to start making money on forex trades from the very first day they sign up with a new platform.
Having such enthusiasm for forex is admirable, but you should take it slowly when it comes to trading with real money. Use the demo account available on your chosen platform, familiarize yourself with how trades work, and then move on to using real money after a few weeks.
Staying patient will ensure that when you do start trading, you are doing so from a position of greater knowledge and awareness of the market.
