Forex Trading in India: A Comprehensive Guide for Beginners

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Forex Trading in India

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After regulations were relaxed in India in the 1990s, the country’s economic performance become powerful with the gates opened to foreign investment and ownership. Forex, a segment of trading using foreign currencies, emerged being regulated by SEBI (Security and Exchange Board of India). The emergence of Forex trading as a popular segment paved way for many investors/traders as well as forex brokers to serve them.

Want to know more about Forex Trading in India? Discover how to find one of the Best Forex Brokers in this article. But before digging deep, let’s understand what Forex and Forex trading mean.


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What is Forex?

An acronym for FOReign EXchange also called money exchange or FX, Forex is a decentralized market wherein the world’s monetary forms are exchanged. With a normal daily trading volume crossing the mark of $5 trillion, it becomes the biggest and the most fluid market on the planet. You can find some good trading opportunities that are unavailable with other investments when you choose forex.

Read: Detailed Guide on Currency Trading in India

Forex Trading

The fundamental process of trading in the foreign exchange market is quite similar to equities. Herein also, traders buy a currency (investing in a particular pair) with a target of making a profit when it’s value increases. A common life example of buying/selling in this segment is the currency you purchase when you travel to a foreign country.

However, things get confusing for newbies due to the price of a currency determined in the value of another one that forms a pair. 

For instance, consider the price of GBP (Great Britain Pound) as 2 US Dollars. This makes the exchange rate between GBP and USD as 2. In other words, the price of the first currency is referred to as its exchange value in the second and vice versa.

Forex Trading around the globe

Benefits of Forex Trading in India

Though trading in this segment isn’t recommended for unpracticed brokers, it gets an upper hand over equities due to various benefits. Some of its advantages include a 24-hour open market (over different parts of the world), low transaction cost, high liquidity, high-profit potential, and use of leverage.

Read: A Detailed Guide to Commodity Trading in India

Finding the Best Forex Brokers in India

Despite not being the richest, India is a key player in global financial markets like Forex. Currencies have deliberately made a place in the preferred choices for Indians looking to invest and multiply their hard-earned income.

But choosing a wrong broker can make things go in vain. This is why we bring to you a quick guide to help choose the best forex brokers in India.

Go through some considerable points of comparison to find your best service provider:

License

As stated earlier, Forex brokers in India are regulated by SEBI but there isn’t any specific licensing authority for the segment. However, given that not all service providers are based in India, you should look out for the ones having a license issued to deliver services in their country of origin such as the UK, Cyprus, or another.

Working with a licensed broker adds extra to the peace of mind as you can always contact the authority in case you need any help.

 Faster Payouts

Since you are trading to make some passive income, you won’t like to wait for long before the joy of money-making vanishes away. In addition, delays from brokers in paying out withdrawals might also be a sign of a probable scam.

Thus, it is recommended not to invest with a broker who asks you to wait for more than 48 hours for the payout. However, you may find many brokers who will readily offer same-day payouts.

Offered Currency Pairs

There might be some brokers who offer you access to a limited number of currency pairs. This will limit the number of opportunities that you can tap and make a profit from.

Ensure you don’t miss out on any trading opportunity by opting for any such broker. Compare different brokers in terms of the currency pairs offered and select the one that offers the best choice.

Trading Software & Platform

For any sort of trading, be it forex or equity, the platform offered by a broker plays a vital role. Choosing the one with a complicated and difficult to understand platform might cause trouble for you. From buying currencies to closing positions and accessing other functions, the user interface and functionality of the software must allow you to do things without hassle.

A difficult tool might lead you to choose the wrong options and making a loss instead of profit. Further, almost every broker nowadays offers multiple platforms for users to trade as per their convenience including a website and a mobile app.

Spreads and Commissions

While forex brokers are offering you a dedicated trading platform along with some intel on how to make more profit, they won’t be doing this for free. A broker earns money from you in the form of spread/commission over every executed trade.

With different commission models available, you will need to choose the best one as per your intended trading frequency and volume. You can choose from fixed, variable, and fixed with extra fee options.

To make the best choice, calculate the amount of commission you will be paying out for the trades you made in the past few months (or a year) for each type of commission model and choose the most pocket-friendly one.

Customer Service

Being an Indian trader, you won’t be looking for a service from a non-native language speaker or during off-hours. Thus, it is essential to choose a broker that offers support in your local language, and if not possible, it should be English at least.

Another thing that matters in this regard is the support channels. With technology evolving, multiple channels have emerged including email, phone call, and WhatsApp. Choose the ones that suit your communication and support needs the best.

Best Forex Brokers in India

Trading in Indian Rupee
  1. FXTM
  2. HotForex
  3. HXCM
  4. ForexMart
  5. FBS

Though considering these factors might help you get a better deal, there are many more you can add to find the best forex brokers in India. Check for additional services and account types offered, and most importantly, testimonials and reviews from past/existing customers to have a better insight into their service level.

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