Forex Trading in India

FOREX is a shortening from 'foreign exchange'. The market can be understood as a giant international network that unites the largest world banks. Among the main market participants central and commercial banks, large investing companies, international corporations can be pointed out.

Individuals can be the market participants as well, but they will not be able to access the market directly. Banks, brokers and other contractors provide such access for individuals. The total amount of currencies is more than 150 while some of them are adopted by more than one country (for instance, EUR, USD, etc).
Referring to the Forex market, currencies are not traded on their own. Those are offered in pairs that show interdependence between two different currencies (for instance, EUR/USD, USD/SGD, etc.). Thus, people using EUR/USD purchase US dollars sell Euros. Under the influence of different economic, political and financial events, the rates of currency pairs are constantly changing.

The market participants obtain their profits from currency pairs' volatility.

Users should understand that FX trading includes no direct purchasing or selling of currencies. A CFD contract is being made between two parties (a broker and a trader). According to the contract, the following conditions are indicated:

• A trader picks up 'lower' or 'higher' options depending on the technical analysis.
• If the price movement corresponds to the prediction, a trader obtains profit and can close the deal.

For instance, a user makes a CFD contract for EUR/USD. The rate is 1.8087. The trader selects the 'Buy' option predicting the rate increasing. When the rate is more than the initial one, profits are obtained otherwise, losses are faced.

According to local law, trading on the exchange, including Forex and binary options, is completely legal. An Indian trader has the right to make a profit and withdraw money by paying the necessary taxes.