Different Strategies for Currency Trading in India

Currency Trading In India

Forex trading requires expertise and skills. As this market is highly volatile, investors need to follow certain strategies which can help them trade effectively. Currency trading in India is now open to retail investors. This has garnered a lot of attention. Forex trading in India is done in pairs of currencies. Indian traders can trade in the following pairs:

  • USD/INR
  • EUR/INR
  • GBP/INR
  • JPY/INR

Forex market is affected by events around the world. Choosing the right strategy, which suits your trading style, is fundamental. A strategy is a type of analysis, which traders use to figure out whether to buy a currency pair or sell it. The strategy should be such, which can help you minimize the effect of the losses if any. A strategy can be based on indicators such as specific worldwide events, technical analysis, past trends, etc. Here we share a few currency trading strategies.

1. Price Action Strategy

The price action strategy is the most commonly used strategy for currency trading. This strategy completely depends on the bulls or bears of the price action in currency trading. This strategy is useful in all kinds of market conditions.

2. Trend Trading

As the name suggests trend trading is when traders analyze the trend and trade accordingly. They need to identify the movement of the currency price, whether it is an upward movement or a downward movement. Based on this the traders need to decide on their entry point. There are various online tools available such as moving average, stochastic, relative strength indicators, etc, which can help traders with the analysis.

3. Counter Trend Trading

This is a type of strategy where a trader trades against the trend in the hopes of making small gains. Here the traders predict that the trend will reverse.

4. Range Trading

As the name suggests, in this strategy, the trades trade in a specific range of currency prices. Here traders need to identify the favorable price conditions in which they can trade. These price levels are usually dependent on the demand and supply for the currencies.

5. Breakout Trading

A trader used the breakout strategy to enter into the market at a point when the market is emerging out of a previous trading range. If the prices rise from the previous range then the trader might want to enter the trade to buy and if the prices break from the previous level then the trader might want to sell.

6. Position Trading

When it comes to online currency trading, seasoned traders opt for position trading. This type of strategy involves analyzing the charts at the end of the day. The traders also need to have a good amount of knowledge and expertise to understand market fundamentals.

7. Carry Trade

In this type of strategy, the focus is on the interest rate differential of the two countries whose currency is being traded. This involves selling out the currency of the country, which has a low-interest rate, and buying the currency of the country, which has a high-interest rate.

These trading strategies can help you identify your trading style. Online currency trading is now accessible to everyone. There are Indian share market apps, which let you, trade in currencies right at your fingertips. Indiabulls Shubh is one such share market app. This is a trading platform, which provides you with seamless trading experience.

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