Forex Trading in the Futures Market in India is not very complicated. In fact, it works more or less like in line with how you trade in the futures market of the equity segment in India.
Check the currency rates against all the world currencies here
You Need To Open A Forex Trading Account With a Broker
The entire process begins with opening a forex trading account with a broker. When you open a trading account to trade in shares you can also simultaneously open one for commodities and the other for currency.
How to Trade in the Forex Markets in India?
Once you have opened your trading account for trading in the forex markets, you can buy or sell any currency. If you are using the online platform to trade, most of the brokers give you a joint option and on the screen it would show, currency, equity and commodities.
You need to click the currency option to begin trading in the currency futures market in India. You further have an option of buying currency from the MCX or the National Stock Exchange. You can buy and sell the US Dollar, UK Pound, Japanese Yen etc.
Unlike the futures of the equity markets, for currency you can buy a future that can be settled almost 12 months down the line. For example, you can buy a contract today for November 4 2014, which can be settled on Oct 28, 2015. You have contracts that expire regularly every month.
What this means is that if you believe that the rupee would fall against the US dollar, you can buy US Dollar of Oct 28, 2015 settlement and hold the same for a year. If the rupee falls against the dollar, you would gain. On the other hand if the rupee gains against the dollar you would lose money. You can settle your outstanding position at anytime before Oct 28, 2015.
Forex trading in lots
In the futures segment of the currency market the trading is done in one lot. So, you need to buy in lots and check, how much currency comprises one lot. Check with your broker about the lot and other details before you buy.
Expert advise to deal in the forex markets
If you have no idea of economic and global issues that determine currency rates nor any technical idea, you must seek professional advise before buying into the futures currency market. Most of the brokerages can offer expert advise on the same and do not shy away from seeking advise.