8 Benefits of Currency Trading in India | Espresso

Benefits of Currency Trading in India

Currency trading, also known as Forex trading, is an investment tool for trading in currencies of countries across the world. It is simply the buying and selling of currencies from different countries. The trading of currencies takes place in pairs.

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The currency trading market in India is emerging as a place for trading different currencies day and night. Buyers and sellers from all over the world trade currencies in the Indian currency market.  The trade in currency trading in India preferably takes place in the futures and options segment. You can trade in currency futures on platforms provided by exchanges like NSE, BSE, USE (United Stock Exchange), and MCX-SX.

Currency trading can be an exciting avenue. But, deciding whether it is the right place for investment requires research and study of the market. So, we have a list of the top benefits of currency trading in India that will help you understand the currency trading market better.

Top Benefits of Currency Trading in India

Here is the list of the top benefits of currency trading in India:

  • Liquidity: Currency trading in India offers investors higher liquidity than other derivatives and assets. The selling and buying of different currencies are quick and easy. Most investors can easily find suitable trades, especially if they are trading in some of the market’s most sought after pairs of currencies in the market.
    Also Read: Complete Guide on USD INR Trading
  • Leverage: Leverage is the trick of using more money to trade than you have in your account. The currency market allows you to trade using borrowed funds which gives you a higher chance of earning profits. For example, a 7:1 leverage means that you can trade for ₹7 for each ₹1 that you have in your account. So, you can trade for ₹7000 for every ₹1000 in your account.
  • 24-hour format: The currency trading market works globally, so there are no restrictions on time. Currency trading in India takes place from 9 am to 5 pm. There is a trade happening across different time zones in various parts of the world. So, Indian traders can easily take a position in the International forex market, and they can trade 24/7, which makes currency trading a flexible option.
    Also Read: Risk Management in Forex Trading Explained
  • Money making opportunities: One of the top advantages of trading in the currency market is that a trader can trade during the highs and lows of the market. There are plenty of opportunities available irrespective of the rise and fall of the market. Therefore, as an investor, you must study the market carefully, speculate the movement accurately, and you will surely make profits.
  • Very accessible: The currency trading market is considered one of the biggest financial markets in the world. Regardless of being big or small, traders trade in various currencies from all over the world. Thus, the market is truly accessible for all, and if you want to trade in currencies, you can do so with ease.
  • Technologically advanced: Today, currency trading in India has become efficient due to the online platforms that brokers offer. These online trading platforms allow investors to access their trading accounts, place orders, and track the movement of different currencies in real-time with ease.
  • Decentralised market: Another important benefit of the currency trading in India is that there is no single entity that can control the market. There are many participants worldwide in the market, so there is no single trader or a handful of traders who can manipulate the prices or dominate the market.
  • Arbitrage: Another money-making opportunity in the currency market in India comes in the form of arbitrage. As the currencies are traded in exchanges like BSE, NSE, and Metropolitan Stock Exchange, there are differences in the values of the currency contracts across all these exchanges. Therefore, you can benefit by buying the currency contract from one exchange and selling it at the other exchange. 

To Sum it Up

If you are a new investor who is looking to learn using smaller investments, then the forex market is a great choice for you. The currency market in India is one of the most significant contributors to the economy of the country due to its size, frequency, and volume of trading. Thus, if you are planning to begin currency trading in India, it is essential that you do your research, plan well, and start investing.

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Frequently Asked Questions

A currency trading market is a place where the buying and selling of different currencies from across the world takes place. There are many participants in the currency trading market, including banks, central banks, corporations, hedge funds, investors like you, etc.

The currency market helps investors take positions on different currencies. Currencies in the market can be traded in the form of a futures contract. Under this contract, an investor can sell or buy a currency at a later date at a predetermined price.

There are numerous benefits of currency trading in India which include money-making opportunities, arbitrage opportunities, high liquidity, high leverage, and decentralised structure of the market.