Why People Switch Indian Stock Market to Forex Market
There are only two reasons for this. Firstly, if you are trading, you need liquidity. If there is no liquidity in the market, you will get stuck in that trade, meaning the market will not move much in one direction. That is why a trader needs liquidity. Secondly, technical analysis works less effectively in the Indian stock market because big players do a lot of things in it, which bothers the traders. In contrast, technical analysis works very well in the Forex market. This is the reason why people are mostly switching to the Forex market.
Is it right to trade in the Forex market in India?
Forex market is illegal in India, but people still trade in it because it has more potential. And it is also cheaper, meaning they get more leverage. To understand it in simple terms, if you trade with $2000 in the Forex market, you can buy goods worth $50,000 with that $2000.
In the Forex market, people trade in pairs, just as the Indian stock market trades in stocks. Forex is not like that. You trade in pairs like EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD. Most people trade in EUR/USD.
Forex market has 4 sessions:
- Sydney Session
You will find less liquidity in this session, which is why people trade less in it. The market remains open from 2:30 AM at night until 11:30 AM in the morning.
- Tokyo Session
Also called the Asian session, this session remains open from 4:30 AM in the morning until 1:30 PM in the afternoon. It has slightly more liquidity than the Sydney session.
- London Session
This session has the most liquidity. Most traders trade during this time.
- New York Session
Trading is also high during the London and New York sessions. They have the highest volume and liquidity. And this is most important for a trader. The London session starts opening at 12:30 PM and closes at 8:30 PM at night.
Technical analysis works best in the Forex market. You get more accuracy when you perform analysis based on technical analysis.
In the Indian market, technical analysis does work, but it is very difficult to successfully take a single trade into good profit. And there are many reasons behind this, due to which people make less profit and mostly suffer losses. The real reason, if seen, is greed—the desire to earn more and more—and they come to the market with less knowledge. There are also past reasons; if you learn well about the Indian stock market, you will know why people are afraid. But my advice is that any new people coming to the market should start with investing, research, and learn about the best possible stocks, and then plan to invest.
Do we need to create a separate Broker account (Demat account)?
No, you can also do it in your existing Demat account, but you have to activate currency derivatives. Only then can you trade in currency. However, for this, you have to provide income proof.
There is a second option as well, such as Delta Exchange and others, where you can easily trade in currency.
Can one trade in gold and silver in Demat accounts like Zerodha, Groww?
Yes, it can be done, but you need to activate the commodity segment in your Demat account.
How to trade in gold and silver?
You have to trade in the ETFs of gold/silver, where you have to buy an option of gold/silver based on estimating the future price.
Secondly, Sovereign Gold Bonds can also be purchased. These are government bonds. You can buy them from platforms like Zerodha, Groww.
How to buy gold/silver on Delta Exchange?
Here, you can buy gold/silver like an option, just as we buy and sell options of Nifty 50 or Bank Nifty. Similarly, you can buy and sell on Delta Exchange.
We can also trade in crypto on Delta Exchange, where we can buy Futures & Options, especially on Bitcoin and Ether.
Is Delta Exchange a trusted platform?
Yes, it has an agreement with India’s FIU (Financial Intelligence Unit), and it complies with Indian regulations. However, this is for Futures & Options, not for buying crypto currency directly. And it has been in India for more than 5 years.