Forex trading in India: An introduction for new traders

Forex trading is not a new subject anymore. It offers a visibly positive impact on the economy. Moreover, it has been earning much interest and excitement from the crowd lately. Forex trading in India is therefore a rapidly growing industry with many companies providing convenient trading forums online. Those who are new traders should be aware of certain rules, facts, figures, and norms about the currency conversion process, platforms, and norms of the virtual trading platforms. 

What is Forex trading and how is it done?

Forex trading is the trading of foreign currencies at the best market rate possible. A trader buys one currency and sells another one. If the purchased currency moves up the currency that is being sold, then the trader receives profit. Forex trading takes place in the foreign currency exchange market, which is an over-the-counter market. It includes buying, selling, and exchange of foreign currencies. The currency conversion rate depends completely on this market. In India, the Reserve Bank of India mandates rules and regulations for this market. The exchange rate tends to change since the market is extremely volatile. It is being said that the conversion rate can even change within three seconds. Hence, the profit and loss depend completely on the foreign exchange market conditions. 
There are three types of exchange markets - 

  1. Future Forex Market - In the future forex market, a contract is prepared between two parties. In this contract, two parties agreed to buy/sell/exchange a certain currency in a certain decided amount on a fixed day in the future. Future Forex Market is done on the exchange market. 
  2. Spot Forex Market - Unlike the future and forward forex market, the spot forex market takes place in the physical market. It is done within a very short period of time. 
  3. Forward Forex Market - The forward forex market works the same as the future forex market. Unlike the future forex market, the forward forex market is not legally binding. Unlike the future forex market, the forward forex market agreement is executed between the banks and the customers. 

Must Read: Why Choose RRSB Forex Money Exchange Service To Convert Currency In India

The traders need to predict the market condition and the exchange rates. Their chances of earning profits depend on the strength of their predictions. Two things, which new traders need to know are - base currency and quote currency. Base currency is the first currency that is listed in the forex pain while the quote currency is the second currency belonging to the pair. As a new trader, one should know that currency trading is done by selling a currency and buying one on behalf of that. Hence, these two currencies are quoted in a pair. 
To successfully do Forex trading in India, you should find an RBI-authorised forex broker. Also, you should be aware of the ongoing conversion rate updates. RRSB Forex is the premium forum to do successful trading online. 

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