Is forex trading profitable? What are the risks you may face, if any? Is online currency trading in India going to make you money? Whether you are a novice trader or someone who knows trading moves, you could very well be asking yourself these important questions. Before you dive into the answers to these questions, you should have some knowledge about online forex trading in India.
Foreign Exchange Markets, Currency Trading Exchanges, etc, are the largest financial markets you can find globally today. Trading of currencies, or forex trading, reaches average amounts of trillions of dollars daily. In India, trading in currencies is gradually gaining momentum. Nonetheless, with waning hesitancy, you may want to know whether currency trading can earn profits in India. For this, there’s a little more to find out about. Forex online trading can be profitable if you recognize the people involved and master certain trading techniques.
To begin to answer the question, “Is currency trading profitable in India?”, you should know that the main players are central and government banks, banks and financial companies, and speculators and hedgers. Governments and banks are involved in currency market transactions for purely economic or regulatory purposes. On the other hand, speculators and hedgers want profit. Besides this, you should know that there are costs like brokerage charges in trading, and these factor in profit margins.
To know the ground reality of whether individuals make a profit from forex trading, it's worth noting how hedgers and speculators make profits in the following way:
Hedgers - What hedging means is best illustrated by an example. In case you are a businessperson conducting international business, you may want to guard against currency fluctuations. You can take a position in the market so that the currency change won’t affect you adversely. This way, you ‘hedge’ any potential loss. To clarify further, forex trading by an importer, for instance, may involve hedging. If an importer feels that the USD is going to increase against INR, they may buy more USD in case they have any future payments to make.
Speculators - Individuals who speculate on the value shifts in currency for the short-term are known as speculators. They base these speculations on many factors and if the shift is in their predicted direction, they make profits. For instance, if speculators believe that the prices of oil will rise in the near future and have an effect on India’s imports, the INR will depreciate against the USD. They would buy more USD to make a future profit.
With Motilal Oswal, you can undertake currency trading and with practice and care this may turn profitable for you. Moreover, the portal has many instructional sources that teach you how you can maximize your profit.
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