Currency Trading in India
Currency trading, also known as the foreign exchange market (Forex) is said to be one of the most thrilling and fast-paced markets in the world. Currency trading in India had been the domain of large financial institutions, corporations, banks, and extremely wealthy and powerful individuals, until recently. However, the development of the internet has made a drastic change and now it is possible for any investors to carry out trade activities of currencies with a click of the mouse through online accounts.
Currency trading is illegal in India if there is no involvement of the Indian Rupee. You can only trade with the involvement of Indian Rupees like USDINR, EURINR, GBPINR or JPYINR. Today, Resident Indians can trade in currency with the help of various Indian financial institutions. However, the present Indian residents are unable to carry out trade through currency pairs with no involvement of the Indian Rupee with any trading bank or other financial agencies under the regular preview of the Reserve Bank of India (RBI). Therefore, if they want to undertake the trade in currency pairs, the residents of India have to go through the transaction of Foreign Exchange trades that are beyond the Indian boundaries.
Not abiding on to the rule will definitely create trouble for the investors. If and all, someone is found trading with no involvement of the Indian Rupee in the Forex market by the Reserve Bank of India’s representatives, he/she will immediately be charged on violation of the law. Thus, it is a crime and the person will be charged and will be imprisoned in the jail
in India. The offense is considered enormous and it has been labelled non-bailable offense. Therefore, the bottom line is that there is are legal and operational risks involved in international currency trade, therefore Indian residents who have the proper knowledge and want to gain advance through Forex movements can carry out trade solely in the exchange traded currency derivatives that is available in India.
The currency trading market provides plenty and huge opportunities for investors. However, to be successful, a currency trader has to educate himself of the fundamentals of currency movements. Regular currency fluctuations are often very small. A rising number of stock traders are taking a keen interest in the currency markets because several factors that move the stock market also affect the currency market to a great extent. One of the most major factors is the supply and demand cycle. When the world requires additional dollars, the value of dollar increases and when there are voluminous exchanging of dollars, the price drops. Also other factors like rate of interest, latest economic data from the largest countries and geopolitical pressures are may affect currency prices.
Similar to anything in the investing market, gaining information about currency trading is simple but achieving the successful trading strategies takes a lot of patience and practice through trial and error experience. Several Forex brokers would give you the opportunity to open a free virtual account that would allow you to carry out the trade with virtual monetary until you find strategies that work best for you. This would help you educate yourself in currency trading in India.