Introduction to Currency Trading – Is it an option of making money online?

What is Currency Trading: Currency Trading means buying and selling currencies of the world. The Foreign Exchange (or Forex) allows ‘Currency Pair’, which means you can trade currencies in volume. Forex is the largest investment market in the world and is ever-growing. Even though currency trading can yield great results, as with all market dependent investments, it is risky. It is prudent that an investor does detailed research and educates himself/herself before taking the plunge.

Given the technological advancements, investors can now easily conduct online trading. It is the easiest and most convenient way that gives you the comfort to trade from home. Anybody can begin trading in the forex market and start making a substantial income. Apart from convenience, online trading cuts out the agent/middle men as you’re directly investing yourself. Since the market is so huge, no one can control or manipulate it. Currency trading in India has reached a boom because of these pros.

Making Money: So how do you make some extra money? If you’re thinking of trading in currency markets, the one thing you need to ask yourself is, if you’re buying or selling. Currency trading always happens in pairs. You buy the currency you want to invest in (the base currency), by selling your own currency (quote currency). Depending on the market, you choose to buy the base currency if you believe it will appreciate over time.

Online Currency Trading: Online forex is one of the easiest ways of adding something extra to your income. One thing to remember is to either have a solid consultant/broker or study or master the basics of this kind of trading. Since Forex market is bigger than the stock and commodity markets put together, there is a lot of scope to earn a good income, if you learn the ropes.

How can you start:

1. Start with a demo account. Create a dummy account on one of the trading sites online and familiarise yourself with the platform. This gives you a chance to make mistakes without actually losing money and you will get a fair idea of what to except in the future.
2. Learn to read the charts. A technical chart or board gives you all the details of which market is on the rise, which are falling, and which have been steady for a while. It is essential for a future investor to read the signs and understand what the charts mean.
3. Identify a good broker to work with. Before you start trading, you will have to open a trading account. Conduct some research to check the authenticity and track record of the trading company. The trading company must be reputed and most importantly must be registered with a regulating authority in the country. In addition to this, check the currencies they offer, their policies, methods, withdrawal conditions and what deposits they expect.
4. Although this is easier said than done, it would be better to consider the bigger picture when thinking about currency trading. Like any other businesses, currency trading has its ups, downs, risks and expenses. Understand that overnight success is not the norm. However, if you stick with it, keep regular tabs, up your trading skills and keep at it, it will eventually give you good returns.
5. Although there are many currencies traded around the world, there are essentially 18 pairs that are the most popular. As market trends go, they seem to yield the best results in the last decade or so. Currency trading in India is legally allowed in BSE, NSE and MCX-SX. As per RBI’s directives, all Indian residents including authorised banks and financial companies can conduct trading. The main currency pairs in the Indian trading market are USDINR, EURINR, GBPINR and JPYINR. Be sure to read in detail about this to make an informed decision.

These are just a few ideas on how you can start investing in this ever growing market. Since the market is almost open 24/7 (depending on the time difference), this is a good investment to look at if you have the time and patience for some initial study.