How to do Forex Trading in India?

What Is Forex Trading

The Trading Between Two currencies Pairs Is called Forex Trading. because one currency is being bought and another - sold at the same time. In the forex market, $5.3 tril- lion is traded daily, making it the largest and most liquid market in the world.The Trading Between Two currencies Pairs Is called Forex Trading. because one currency is being bought and another - sold at the same time.

Real time Forex Quotes

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• Pip - The fourth unit after the decimal point, which is the smallest unit of an exchange rate.

Price Interest Point represents the smallest change in a currency pair. Typically, it is the fourth decimal point, although many brokers quote using the fifth decimal. However, the fifth decimal doesn't really affect the price as it changes really quick.
Currency pairs that include the U.S. dollar, a pip is 1/10, 000 of a dollar, whereas when the currency pair includes the yen, a pip is 1/100 of a yen because the yen is closer in value to 1/100 of other major currencies.

• Spread - The difference between the sell quote and the buy quote (in pips)

In Forex trading, brokers quote the bid and ask price for the currency pairs. The bid is the price that a trader can sell the base currency while the ask is the price they can buy the base currency. Spread refers to the difference between the two prices. Besides, this is how the “no com- mission” brokers- those who do not charge a separate fee on traders’ transaction- make their money.
The spread is measured in pips. Most currency pairs- the base currency and quote curren- cy- have a pip value equal to 0.0001. For instance, take the following quote; EUR/USD = 1.1051/1.1053 the spread is 0.0002, which equates to 2 pips.

• Leverage - Leverage, which represents a margin trading ratio, enables traders to borrow a certain amount of money that allows them to trade in much bigger deals. Moreover, leverage allows one to trade using more money than they have in their account. Therefore, you “leverage” your account’s balance to place a bigger trade. Currency rates move very slowly. This makes small trades unfashionable as they only return small profits and losses for every pip rate changes. Therefore, leveraging helps one to trade in larger deals hence amplifying their potential profits and losses.

Forex Trading Time

While the Forex market is open 24 hours a day, five days a week, trading is not always active during this entire time. Profits are made in forex trading when traders are bidding on the prices and the market is active. So it is essential that you know the crucial hours and days of forex trading when traders are the most active.

As a global market, forex spans multiple time zones. As a result, there are three main forex trading sessions you should be aware of; the Tokyo (or Asian) session, the London (or Eurpoean) session and fi- nally the New York (or American) session.

The busiest times are when these ses- sions overlap, for example, in the early hours of the morning in London, the trad- ing session in Tokyo is just winding down. European traders are getting to their desks and analyse and digest information from the Asian trading session, so early 6am (GMT) is a great time to make trades as the saying goes, “the early bird gets the worm.”

The London session is usually the most active and in the afternoon overlaps with the opening of the New York or American session, so there can be good opportune- ties to trade forex and make a profit.

Seasoned traders considered 10am (EST) to be the best time to trade forex markets as during this time, traders in London and
Europe are preparing to close their positions and traders are getting ready to make a move in the American session. As the focus shifts from Europe to the US, this often cre- ates big swings in currency prices, opening up opportunities to profit.

TOP 10 Terms in Forex Trading

• Single Currency - EUR (Euro)
• Cable - GBP/USD (British pound / U.S. dollar)
• Ninja - USD/JPY (U.S. dollar / Japanese yen)
• Fiber - EUR/USD (Euro / U.S. dollar)
• Chunnel - EUR/GBP (Euro / British pound)
• Yuppy - EUR/JPY (Euro / Japanese yen)
• Barnie - USD/RUB (U.S. dollar / Russian
• Going Long - Opening a Bullish (buying) trade
• Going Short - Opening a Bearish (sell- ing) trade
• Cutting Short - To close a losing posi- tion early
• USD/CAD - Dovish BOC hurts the loo- nie - Bank of Canada reports an interest rate cut, therefore Canadian dollar depreci- ates against U.S. dollar

TOP 3 Forex Strategies That Works

1. Support & Resistance : This strategy follows the old business cliché, “buy low and sell high.” Forex traders quantify the levels of how low is a price’s low and how high its high is by analyzing areas where prices have stopped and changed direction.The support refers to the level where the price rarely falls below before turning around, and the number of buyers exceeds that of sellers hence causing the price to rise. On the other hand, the resistance is the level where price rarely exceeds, and the number of sellers exceeds that of buys hence lowering the price down. In both cases, the price stops and turns around.
2. Pinnocchio Strategy : A Pinnocchio bar is a candlestick bar that has a very small body and a very long wick (nose). It is also called Shooting Star, Hanging Man and Gammer. You may remember that Pinnochio's nose grew long when he was lying. The same happens with this strategy: when the wick is longer than the body, this tells us that the market is deceiving us and that we should trade the opposite way. The entry point varies: some traders prefer to wait for the next candle to retrace to the 50% Fi- bonacci level of the Pin bar, while others enter immediately after the Pin bar closes. A long wich indicated strong selling pressure; a long tail suggest intense buying power.
3. The Double Red Strategy : The double - red strategy is a short term reversal system based on price action and resistance. The trade is planned on a 5-minute chart and is signaled when two bearish candles form fol- lowing a test of resistance.

#Source : Forex For Beginner Traders.

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