How to do forex trading in India

How to Do Forex Trading in India: Step-by-Step Beginner’s Guide

Forex trading, also called foreign exchange trading, is the buying and selling of currencies to make a profit. With more than $7 trillion traded daily, it is the largest financial market in the world. In India, forex trading is gaining popularity, but many beginners are unsure about its legality, process, and risks. If you want to learn how to do forex trading in India, this guide will take you through everything step by step.

What is Forex Trading?

Forex trading is the exchange of one currency for another. Since currencies are always traded in pairs, you speculate on how one will perform against the other.

Example:

• If you believe the U.S. dollar will rise against the Indian rupee, you buy USD/INR.
• If you believe it will fall, you sell USD/INR.

Your profit (or loss) comes from the price difference between your entry and exit points.

Is Forex Trading Legal in India?

Yes, forex trading is legal in India, but with restrictions:

✅ You can only trade INR-based currency pairs approved by the RBI and SEBI:

• USD/INR
• EUR/INR
• GBP/INR
• JPY/INR

✅ You must trade through SEBI-registered brokers such as Zerodha, Upstox, or ICICI Direct.

❌ Trading via unregulated international brokers that offer exotic currency pairs is illegal in India.

How to Do Forex Trading in India (Step by Step)

1. Learn Forex Basics

Before you trade with real money, understand key terms:

• Pip → Smallest unit of price movement.
• Lot size → Quantity of currency being traded.
• Leverage → Borrowed capital to increase position size.
• Spread → The difference between buy and sell price.

2. Select a SEBI-Registered Broker

Choose a legal broker like:

• Zerodha
• Upstox
• ICICI Direct
• Angel One

These platforms allow you to trade approved currency pairs safely.

3. Open a Trading Account

Complete KYC with your broker using Aadhar, PAN, and bank details. Once approved, you’ll get a trading account to start forex transactions.

4. Fund Your Account

Deposit the amount you want to start with. Many brokers allow you to begin with as little as ₹5,000–₹10,000.

5. Choose a Currency Pair

Start with USD/INR, as it’s the most traded and liquid pair in India.

6. Place a Trade

• If you expect USD to rise against INR → Buy USD/INR.
• If you expect USD to fall → Sell USD/INR.

7. Manage Your Risk

• Use stop-loss orders to limit losses.
• Don’t risk more than 2% of your capital on a single trade.
• Avoid high leverage unless you’re experienced.

Best Forex Trading Platforms in India

Here are the top SEBI-regulated platforms for Indian traders:

Tips for Success in Forex Trading

• Start with a demo account to practice risk-free.
• Stick to one pair (USD/INR) before trying others.
• Follow economic news like RBI policies, inflation, and global events.
• Keep emotions in check—don’t overtrade.
• Use a trading journal to track and improve your strategies.

Conclusion

Forex trading in India is a legal and profitable opportunity, provided you trade only INR-based pairs through SEBI-registered brokers. Beginners should start small, learn the basics, and practice risk management. With the right discipline and strategy, forex can become a powerful tool for wealth creation in India.