Currency trading for Beginners: A Step-by-Step Guide
Currency Trading is the safest way of trading when you open a Demat Account. Normally it moves in a Range so anyone can manage their risk to a minimum. There are 12-month Future Contracts available to trade so one can buy or sell any contract of twelve months as per their imagination or speculation.
Here one has to pay a very small amount to buy a future contract it is around 2000 per lot in a future contract. Option trading facilities are also available on NSE. It is a must to keep one observer like Allneeds when you start trading in the Currency market. Main points to keep in mind when you plan for currency trading.
Currency Trading Total 8 Pair of Currency
- RBI has Approved Currency Pairs USD-INR, EURO-INR, GBP-INR, and JPY-INR are mostly Traded four Pairs. Others are EUR-USD, GBP-USD, USD-CHF, USD-JPY
- Highly Liquid Currency is USD-INR
- Timing 9:AM to 5 PM
- Lot Size 1000 Qty 1 lot size, 1 USD Fututre means we buy 1000 US Dollar
- Expiry Every Friday 12:30
- Monthly Expiry: Before the last two working days
- The rate is decided by RBI everyday 12:30
- Know the different currencies of world countries.
USD = US DOLLAR (THE AMERICAN DOLLAR)
JPY = JAPANESE YEN
GBP = THE BRITISH POUND STERLING
CHF = SWISS FRANCE
NZD = THE NEW ZEALAND DOLLAR
CAD = CANADIAN DOLLAR
AUD = THE AUSTRALIAN DOLLAR
EUR = THE EURO
Currency is traded on a Monthly and Weekly Contract basis. One can manage their risk by buying in any contract and selling other contracts to hedge as per needs
Currency trading, also known as forex (foreign exchange) trading, involves buying and selling currencies on the foreign exchange market.
To start currency trading as a beginner:
- Educate yourself about forex markets.
- Choose a reputable forex broker.
- Practice with a demo account.
- Develop a trading plan.
- Begin with a small capital.
Effective forex trading strategies include trend following, range trading, breakout trading, swing trading, scalping, carry trading, and sound risk management with stop-loss orders.
To manage risk in forex trading:
- Use stop-loss orders to limit potential losses.
- Diversify your portfolio across different currency pairs.
- Set a risk-to-reward ratio for each trade.
- Avoid risking more than you can afford to lose.
To choose a forex broker:
- Check regulation and licensing.
- Assess fees and spreads.
- Verify trading platform quality.
- Review available currency pairs.
- Consider deposit and withdrawal options