Forex Trading 3
Jumat, 18 Mei 2018
Is Forex trading legal in India 2018 ?
Top SEBI Regulated Forex Brokers - Updated List for October 2018
India is the second most populous country in the world that is home to one of the largest group of working class people, who have an increased affinity towards investing in the several attractive opportunities available throughout the globe. Forex trading is one of the very new investment concepts in India that was popularized by several brokers promising massive returns with minimal investments. An increasing number of broker scams and financial malpractices, along with the risky nature of Forex trading, has forced the Indian Government to put severe restrictions on the way Indian citizens are allowed to trade in the Forex markets.
The Securities and Exchange Board of India (SEBI) is a Government appointed regulator that received its statutory powers in 1995 to regulate and supervise all financial entities dealing in the securities market. SEBI is responsible for overseeing the activities of brokers, companies, as well as individual investors to ensure that the securities market operates with integrity and transparency without affecting the overall stability of the Indian market. The SEBI is one of the most influential regulatory organizations in the world that takes the matter of regulating the security markets quite seriously indeed. SEBI regulated brokers are routinely audited and supervised for any financial discrepancies, which has resulted in several brokers, investment firms, securities companies, and investors to receive hefty fines and cancellation of licenses due to the lack of adherence to the SEBI rules.
Restrictions Imposed On Forex Trading For SEBI Regulated Brokers
Indian Forex traders are not supposed to indulge in any currency pairs that does not involve the INR as the base or quote currency. The Indian Rupee is the official currency and the legal tender of the country, and it is illegal for Indian citizens to transact in any other currencies while they are in India. Under the Foreign Exchange Management Act (FEMA), it is also illegal for the people of India to send the INR to overseas countries for the purpose of currency conversions or investments, unless approved by the Government. Therefore, Converting the INR to USD or other currencies for the sake of trading the FX markets with overseas Forex brokers is considered to be an illegal activity that can attract severe fines and even prison time. SEBI Forex brokers have the option of offering Forex trading products as part of its services portfolio, but these brokers are required to follow all guidelines issued by the SEBI and the official authorities governing the FEMA act. Failure to stick to the rules and guidelines will result in all SEBI regulated brokers to face severe consequences, which can also ultimately result in drastic legal concerns. SEBI also imposes restrictions on the maximum available leverage, types of trading, and the rules governing exotic currency pairs. In reality, SEBI Forex brokers are only allowed to offer INR based currency pair options for USD, EUR, GBP, and JPY. Almost all other currency pairs are barred from FX trading unless authorized by the Government authorities. Forex trading used to be a private activity in India that was exclusively made available to the Reserve Bank of India, other allied banks, and large financial institutions. However, with time, more individuals and smaller financial institutions started indulging in Forex transactions for global businesses and other investment opportunities, which allowed Forex trading to gain immense popularity in the country quickly. A significant portion of the country has millions of expats that work in different countries across the globe, which has resulted in an influx of foreign currencies into India by way of foreign direct investments through its non-resident citizens. Therefore, Foreign exchange and Forex transactions play an integral part in the Indian economy.
Staying Protected From Broker Scams
Forex brokers in India should be regulated by the SEBI and should be authorized by the relevant authorities to ensure that all companies follow the FEMA guidelines on Forex trading. India is also highly proactive in its anti-money laundering laws, and the Indian Government is very thorough in its policies that deter its citizens from investing in overseas brokers. While the SEBI and the authorities are tasked with the responsibility of preventing any citizen from trading with international Forex brokers, there are exceptions to the case that may prevent the authorities from doing their job. Most international Forex brokers in India operate through branch offices, Introducing Brokers, or through affiliates without actually being regulated by the SEBI or any other organization. These brokers offer their services illegally without any consent from the authorities, which prevent the Government from tracking their activities. A majority of traders typically lose their money in the markets due to a lack of knowledge and due to scam and fraudulent activities from the brokers’ part. Therefore, Forex scams and other financial malpractices are highly rampant in the country, which has forced the Government to intervene and severely limit the freedom enjoyed by Forex brokers.
As a Forex trader in India, you should always make sure to invest your money with Government approved SEBI Forex brokers, as it is imperative from a legal perspective to adhere to the policies and guidelines issued by the authorities. Some SEBI regulated brokers may offer the convenience of investing in other countries, but a majority of Forex brokers in India only allow its traders to trade on INR related currency pairs. If a broker promises to offer other currency pairs, check the legality of the broker and ensure that their services are in line with the regulatory guidelines imposed on them by the SEBI.
What If I Want To Trade The FX Markets With International Brokers?Trading with an international broker and depositing money from an Indian account to an overseas bank account without the Indian authorities’ consent is strictly against the law. There are several penalties and legal ramifications that may affect a person if they are found to be in violation of the existing rules. Therefore, if you are looking to trade with overseas brokers, you should make sure that you acquire the necessary permissions and get in touch with a professional expert, who can provide you with guidance on your future course of action. If you are indeed choosing an international Forex broker, take your time to research and choose regulated Forex brokers that have an excellent reputation. Don’t be lured by false promises that may guarantee an insane amount of profits and a free unlimited income potential, as Forex trading is far from the ultimate quick riches scheme that it is portrayed to be. Never choose an international Forex broker, especially if you are advised against it, but Non-resident Indians are free to choose a Forex broker of their choice according to the laws applicable in their jurisdiction.
What are 'Fibonacci Extensions'
Fibonacci extensions are used in Fibonacci retracement, which is a common method of technical analysis used to forecast potential areas of resistance and support in the market. Retracement is based on the concept that stocks will a retrace a predictable portion of a move. Typically, a retracement occurs at one of three standard Fibonacci levels: 38.2 percent, 50 percent and 61.8 percent.
Fibonacci extensions can be calculated when a stock retraces more than 100 percent of its prior move. For example, to set a price target on the breakout of an ascending triangle, traders typically use the 61.8 percent level. Multiplying the vertical distance of the triangle by the key Fibonacci ratio and adding the result to the triangle’s upper resistance level can yield the target price.
The most effective way to calculate Fibonacci extensions is when stocks are at new highs or new lows, and when there are no clear levels of resistance or support on the chart. If a trader is long on a stock and new highs begin to occur, the trader can find the Fibonacci extension levels to form an idea of where the stock is likely to fall and where it is likely to make profits. The same is true for a trader who is short. Fibonacci extension levels can be calculated to give the trader a general idea of where the stock may start to rally. The trader then has the option to decide whether to cover the position at that level.
Key Considerations When Using Fibonacci Extensions
Fibonacci extensions are not meant to be the sole determinant of whether to buy or sell a stock. It is advisable for investors to use these extensions along with a several different indicators or patterns when looking to determine one or multiple price targets. Candlestick patterns, such as price action, are especially informative when trying to determine whether a stock is likely to reverse at the target price.
Fibonacci extensions can be used for any time frame, no matter how long or short; whether used for a chart that spans a month or one that spans a day or a minute, Fibonacci extensions are a proven methodology. They are most effective when applied in instances of price waves, so as to increase the accuracy when forecasting the likelihood of future price waves. Typically, clusters of Fibonacci levels indicate a price area that will be significant for the stock and traders in their decision-making.How to trade forex successfully for beginners?
20 way you can remember always…
1. Choose Your Broker Wisely
2. Create Your Own Strategy
3. Learn Step-by-Step
4. Take Control of Your Emotions
5. Stress Less
6. Practice Makes Perfect
7. Psychology is Key
8. No Risk, No Success
9. Patience is a Virtue
10. Continuous Education
11. Take Breaks
12. Trends are Good for You
13. Look for Competitive Conditions
14. Plan in Advance
15. Know the Charts
16. Don't Run out of Chances
17. Greediness Leads to Risks
18. Use Stop-Losses
19. Analyse Your Trades
Don't let Forex currency trading frighten you into giving up, when it feels like the odds are against you. Instead, try to remember that Forex success is based on a mixture of preparation and stubbornness.
As mentioned in our Forex Trading Golden Rules article, "FX trading takes consistent discipline to yield success". These Forex tips and tricks will help you prepare – the rest is up to you.
What is Forex CFD'S ?...
Some of the benefits of CFD trading are that you can trade on margin, and you can go short (sell) if you think prices will go down or go long (buy) if you think prices will rise. CFDs are tax efficient in the UK, meaning there is no stamp duty to pay. You can also use CFD trades to hedge an existing physical portfolio.
With CFD trading, you don’t buy or sell the underlying asset (for example a physical share, currency pair or commodity). You buy or sell a number of units for a particular instrument depending on whether you think prices will go up or down. For every point the price of the instrument moves in your favour, you gain multiples of the number of CFD units you have bought or sold. For every point the price moves against you, you will make a loss. Please remember that losses can exceed your deposits.
CFDs are a leveraged product, which means that you only need to deposit a small percentage of the full value of the trade in order to open a position. This is called ‘trading on margin’ (or margin requirement). While trading on margin allows you to magnify your returns, your losses will also be magnified as they are based on the full value of the CFD position, meaning you could lose more than any capital deposited.
What are the costs of CFD trading?
Spread: When trading CFDs you must pay the spread, which is the difference between the buy and sell price. You enter a buy trade using the buy price quoted and exit using the sell price. The narrower the spread, the less the price needs to move in your favour before you start to make a profit, or if the price moves against you, a loss. We offer consistently competitive spreads.
Holding costs: at the end of each trading day (at 5pm New York time), any positions open in your account may be subject to a charge called a 'holding cost'. The holding cost can be positive or negative depending on the direction of your position and the applicable holding rate.
Market data fees: to trade or view our price data for share CFDs, you must activate the relevant market data subscription for which a fee will be charged.
Commission (only applicable for shares): you must also pay a separate commission charge when you trade share CFDs. Commission on UK-based shares on our CFD platform starts from 0.10% of the full exposure of the position, and there is a minimum commission charge of £9. View the examples below to see how to calculate commissions on share CFDs.
Buying a company share in a rising market (going long)
In this example, UK Company ABC is trading at 98 / 100 (where 98pence is the sell price and 100pence is the buy price). The spread is 2.
You think the company’s price is going to go up so you decide to open a long position by buying 10,000 CFDs, or ‘units’ at 100 pence. A separate commission charge of £10 would be applied when you open the trade, as 0.10% of the trade size is £10 (10,000 units x 100p = £10,000 x 0.10%).
Company ABC has a margin rate of 3%, which means you only have to deposit 3% of the total value of the trade as position margin. Therefore, in this example your position margin will be £300 (10,000 units x 100p = £10,000 x 3%).
Remember that if the price moves against you, it’s possible to lose more than your margin of £300, as losses will be based on the full value of the position.
Outcome A: a profitable trade
Let's assume your prediction was correct and the price rises over the next week to 110 / 112. You decide to close your buy trade by selling at 110 pence (the current sell price). Remember, commission is charged when you exit a trade too, so a charge of £11 would be applied when you close the trade, as 0.10% of the trade size is £11 (10,000 units x 110p = £11,000 x 0.10%).
The price has moved 10 pence in your favour, from 100 pence (the initial buy price or opening price) to 110 pence (the current sell price or closing price). Multiply this by the number of units you bought (10,000) to calculate your profit of £1000, then subtract the total commission charge (£10 at entry + £11 at exit = £21) which results in a total profit of £979.
Trading account open In Forex
The requirements for opening a Forex account have become simpler since the growth of online Forex trading. Today, Opening a Forex account is almost as simple as opening a bank account.
First, of course, you'll need to find a Forex broker -- all retail Forex trading goes through and is managed by a brokerage, which may be a specialized Forex broker or the same brokerage you use for stock market investing and trading.
You'll need to fill out a brief questionnaire about your financial knowledge and trading intentions. You'll also need to provide an ID, and the minimum deposit your Forex account institution requires. That's it. You're now free to trade. Incidentally, many Forex brokers will take your credit or debit card in lieu of cash, so, you really don't need to deposit any money at all -- not that this is a good idea.
A Forex account is an account used to hold and trade foreign currencies. Typically, you open an account, deposit money denominated in your home country currency, and then buy and sell currency pairs.
Your purpose, of course, is to make money on your trades. Unfortunately, the majority of Forex traders lose money; the average length of a Forex trading account is only about four months. It doesn't mean that the Forex is a scam as some critics have maintained, but Forex scams do abound.
Making money on highly-leveraged currency trades is harder than it looks and, at a minimum, requires developing an expertise that many novice traders fail to acquire.
What is a Candlestick Pattern???
A candlestick is a chart that displays the high, low, opening and closing prices of a security for a specific period. The wide part of the candlestick is called the "real body" and tells investors whether the closing price was higher or lower than the opening price. Black/red indicates that the stock closed lower and white/green indicates that the stock closed higher.
high and low and how they compare to the open and close. A candlestick's shape varies based on the relationship between the day's high, low, opening and closing prices.
In technical analysis, a candlestick pattern is a movement in prices shown graphically on a candlestick chart that some believe can predict a particular market movement. The recognition of the pattern is subjective and programs that are used for charting have to rely on predefined rules to match the pattern. There are 42 recognized patterns that can be split into simple and complex patterns.
Candlesticks reflect the impact of investor sentiment on security prices and are used by technical analysts to determine when to enter and exit trades. Some of the earliest technical trading analysis was used to track prices of rice in the 17th century. Much of the credit for candlestick charting goes to Munehisa Homma (1724–1803), a rice merchant from Sakata, Japan who traded in the Ojima Rice market in Osaka during the Tokugawa Shogunate. According to Steve Nison, however, candlestick charting came later, probably beginning after 1850. Candlesticks are a suitable technique for trading any liquid financial asset such as stocks, foreign exchange and futures.
: Forex Trading 3
: Isonego Isoneopo
: Forex Trading 3