Exchanging foreign currencies and speculating on their price fluctuations are extremely popular among people searching for a safe side income all around the globe, as well as in India. Yet, there are still many myths, scares, and prejudices swirling around. Hence, we would like to present an objective overview as an alternative.
As a rule, when an investor considers whether he should try this kind of trading or not, the first question he is concerned about is: “Is it legal?”. If you are a citizen of India, the answer will be: “Yes”. However, to be on the safe side, you must also check if the service chosen is properly licensed. Control on the side of authorities will protect you from scams and other illegal and unjust business practices. In this country, currency exchanges are monitored by SEBI. Meanwhile, they must obtain an official permit from RBI as well. The local authorities also control the operation of international services within the country. Still, to stay fully protected, it is recommended to choose sources based in tier countries, such as the EU, the UK, or Australia.
Now, when you are sure that Forex Trading India is fully legitimate, you can safely take your first steps:
- Find a broker you can safely entrust your money to. Again, the company must be licensed in India or in a tier country. Also, pay attention to commission rates and other terms. Keep in mind that even a small fee may result in huge expenses in the case of large-scale deals. If you are a beginner, we advise you to select IC Markets, eToro, or Interactive Brokers.
- If the broker or exchange chosen offers a demo account, be sure to open it. It will allow you to get a deep insight into the quality of service the platform provides. In addition, it is a perfect tool for learning how to trade effectively. It is much safer to experiment with virtual money.
- Explore basic trading strategies and try them with virtual funds. Only when you’ve got a clear strategy and a comprehensive understanding of how the market operates, switch to trading with real money.
- Consider earning in a passive way. So, if you are not ready to devote time to learning, monitoring, and buying/selling on a daily basis, copy trading is the easiest solution. Instead of investing on your own, you can copy deals of other traders. Another option worth mentioning is a PAMM account, which involves transferring your capital under the management of another trader and earning a percentage of his overall profit.
- Stick to small sums to avoid heavy debts.
- Continue learning and adding new instruments and strategies to your toolkit.
In sum, taking into account that such trading is fully legalized and scrupulously regulated in India, it is definitely a must-try for those who want to diversify their portfolios or just seek passive or active extra income sources.