Most Common Forex Pairs in India
Best currency pairs to trade in India are:
-
1
USD/INR
-
2
EUR/USD
-
3
GBP/USD
-
4
USD/JPY
-
5
AUD/USD
In the fast-paced world of foreign exchange (Forex) trading, it's crucial to have a solid understanding of the best currency pairs to trade. This is especially true in India, where the Indian Rupee (INR) holds a vital role. Traders in India predominantly trade EUR, GBP, USD, and JPY against the INR, as these pairs tend to exhibit high liquidity and price volatility. The INR-based currency pairs are favored because the base or quote currency is the INR. However, aside from the INR, other highly traded currency pairs in India include GBP/USD, EUR/USD, and USD/JPY.
What are the best Forex pairs to trade in Indian local time?
The most opportune time to trade forex in India is from 17:30 IST to 20:30 IST, especially for trading US dollar-related pairs such as EUR/USD, GBP/USD, USD/JPY, etc. This is the period when the European and US market sessions overlap, providing maximum market liquidity and trading volume.
Some currency pairs see higher trading activity during these Indian trading hours, including:
USD/INR. This is the most traded currency pair involving the INR, making it highly liquid and suitable for trading during Indian hours You can be also interested in the best time to trade USD/INR.
EUR/USD. It is one of the major currency pairs traded globally and offers excellent opportunities for traders due to its high liquidity and low spread
GBP/USD. Known as the "Cable", it is highly volatile and presents many trading opportunities, especially during the London trading session
USD/JPY. This pair is very liquid, representing two of the world's largest economies, and price fluctuations often follow clear trends
AUD/USD. Known as the "Aussie", it is particularly active during the Asian trading session, but it can offer profitable opportunities during the Indian trading hours too
Can I trade Forex 24/5 in India?
Yes, Forex trading is accessible 24/5 in India across different global market sessions:
-
Asian session. 5:00 AM to 2:30 PM IST
-
European session. 12:30 PM to 10:00 PM IST
-
US session. 8:00 PM to 5:00 AM IST (next day)
Rules and Regulation
Licensing in India
In India, brokers are regulated by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI). The former supervises foreign currency and the latter controls the stock market. The conditions for obtaining a license are: sufficient capital, a detailed business plan, compliance with rules and regulations, professional qualifications of key employees, and a professional reputation of the applicant.
Investor protection in India
To resolve disputes, traders can approach the RBI and SEBI that prevent fraud and dishonest activity in the securities market.
Taxation in India
Traders in India are subject to two primary types of taxes: direct and indirect. Direct taxes include a 5%-30% income tax. Capital gains tax is 15% for short-term profits and 10% for long-term ones. Trading income under 2.5 lakhs of Indian rupees is not taxable.
How to start currency trading in India
Starting to trade in Forex markets in India involves a few important steps. Here is a guideline on how to get started:
-
1
Open a currency trading account. Choose a reputable forex trading broker and open a currency trading account. In India, forex trading necessitates having a trading account. Many brokers provide a combined trading and Demat account
-
2
Submit KYC documents. You must submit KYC documents, including proof of identity, address, income, and bank account details. After verification, you'll be notified whether your application is approved or rejected
-
3
Choose a currency pair. Trading in forex is conducted in pairs. Beginners typically start with major currency pairs. However, those with adequate funds can trade in any currency pair
-
4
Read the quote. Comprehend the bid and ask prices of a currency pair. The bid price is the buying price, and the asking price is the selling price. Understanding these rates is fundamental to successful trades
-
5
Pick a position. Study market trends and select a position. For example, if the INR appears to be strengthening against the USD, buying might be a good idea
Remember that successful Forex trading requires knowledge and experience incrementally gained over time.
FAQs
What are the most profitable currency pairs to trade?
The most profitable currency pairs depend on individual trading strategies. However, some of the most popular and potentially profitable pairs include EUR/USD, USD/JPY, GBP/USD, USD/CAD, AUD/USD, and USD/CHF.
Which cross-currency pairs are legal in India?
Currency trading in India is allowed in seven pairs- USD/INR, EUR/INR, JPY/INR, GBP/INR, EUR/USD, GBP/USD, and USD/JPY.
What is the most popular currency pair to trade?
EUR/USD is the most traded currency pair, constituting approximately 23% of the total trading volume.
What are the top 5 most traded currency pairs?
The top five most traded currency pairs are EUR/USD, USD/JPY, GBP/USD, AUD/USD, and USD/CAD. These pairs are popular due to their high liquidity and the economic strength of their respective countries.
Team that worked on the article
Alamin Morshed is a contributor at Traders Union. He specializes in writing articles for businesses who want to improve their Google search rankings to compete with their competition.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.
Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO).