How can Currency Trading increase your chances of being a profitable trader?

currency trading

Why one should start Currency Trading in India?

The forex market in India is still untapped. There are ample of opportunities in currency trading in India in which people can make good returns on their capital.

If currency is a good asset to trade in, why are people unaware about it?

Unlike stock market it is not packaged and highlighted by the market gurus, youtubers, bloggers and the mainstream financial channels. Many of you entered into stock markets or mutual funds after the successful campaign “Mutual funds sahi hai”. It spread the word about the stock markets to a larger audience. Thus, resulting in the huge demat account growth in India which currently stands at more than 7.4 crores.

But for forex trading there are no such campaigns. So is it a good opportunity to enter in currency trading?

The answer to that question is , yes.

Below we have highlighted the benefits of trading currencies over stock markets:

👉 Capital Required– Margin required to trade 1 lot of either of the currency pairs ranges between ₹1,700 to ₹2,500. In stock markets if you trade Nifty, Nifty Bank futures or any other stock futures you need more than ₹1,00,000.

– You can sell options in Currency trading just below ₹3,000. Whereas, in stock market you need at least ₹50,000 to sell options.

– You can start trading in currencies with ₹10,000 capital and make decent returns. In stock markets, you need a higher amount to make same returns.

👉 Focus– You only need to track 4 currency pairs in India. Examples – USD/INR, GBP/INR, JPY/INR & EUR/INR.
In stock markets you need to look at multiple things to find a decent trading opportunity and sometimes it is confusing for beginners to find something that is best for making a trade.

👉 No manipulations– There is no chance of manipulation in currencies as it requires very big flow of money in one direction to make a considerable move. Besides this we have RBI who is playing against the directional flow as they control the volatility in Currency market.
In stock market, we have heard of freak trades in options of several assets. Companies with a small market size getting pumped by few high net worth individuals, promoters and operators. They manipulate prices of their companies to make big money in less time.

Having knowledge of currency trading and stock market trading makes you a multi asset trader.

Being a multi asset trader gives you an extra advantage, when the stock markets are choppy/volatile and you are not getting proper trade signals where you are comfortable in taking risks on your capital you can look for trading currencies.
Most of the times when stock market becomes uncertain you can diversify your portfolio with USD/INR currency pair. Some examples from recent times are Covid crisis, Russia- Ukraine war, Global inflation etc. You will see big funds flowing in USD and bonds when markets have uncertainty and the people who know about currencies can take advantage of the situation. A person trading in only stock markets might be trapped or forced to make trades even when things are not very clear.

On the other hand, when you see stock markets in a strong run, you will find currencies moving in a downtrend or sideways action. It gives you an opportunity of selling options at a very less capital than it will be required in stock markets.

One of the best part of being a multi asset trader that I have discovered in my trading journey is you can make far more returns on your capital in trading when you understand the correlation between stock markets and currencies. Trading is not about forcing trades, it’s about betting on the right opportunities, having knowledge of two assets gives you ample of chances to make money on the right opportunity.

Now, the question is how to start Currency Trading in India?

– First of all you need a demat account. I am personally using Zerodha, you can use any broker which is providing currency trading facility in India.

– You need a small capital of ₹10,000 which you can scale up as your experience and skill in the game grows.

– Prepare a watchlist of  what you need to track. Few things like Dollar Index, Bond Yields, Brent Crude, Cross Currency Pairs, Major Indices and Currency Pairs that can be legally traded in India should be tracked.

– Basic understanding of important global events and scenarios so that you analyze the impact of the event on the price of the currencies.

– Basic knowledge of Price Action like Candlestick basics, Support/Resistance and trendlines.

What’s next?

Chiku Charts Learning Academy provides basic to advanced level of mentorship for Currency Trading. If you are looking to develop skill in this space you can enroll for our 3 day live mentorship program.

Click here and fill the form to enroll for this mentorship program.

 

 

 

 

75 thoughts on “How can Currency Trading increase your chances of being a profitable trader?

  1. Amazing read , Thanks to team chiku charts for this amazing content . I remember I used to search about trading forex in India and I don’t found even 1 good blog on it . Carry on the good work .

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