Forex currency trading

Next step that I would recommend is to get familiar with the common treminology used in Forex trading, strategies for efefctive trading and dealing with emotions issues while trading. I found a nice course where you can learn all the basics of forex trading. I came across it while going through FxDialogue website. This forex course is aimed at the novice and the seasoned trader alike. The course covers all aspects of Forex which involves everything from History of the Forex Market to the role that Psychology plays in trading. The course is organised in 7 sections and will equip you with everything you will need to understand how and why the Forex markets operate and even how to deal with situations that plague the most advanced forex traders. At the end of each section the reader will find a short quiz which will help to consolidate what has been learned. Dont read it all in 1 day. take your time and digest all that you read.

Spread

The difference between the sell quote and the buy quote or the bid and offer price. For example, if EUR/USD quotes read 1.3200/03, the spread is the difference between 1.3200 and 1.3203, or 3 pips. In order to break even on a trade, a position must move in the direction of the trade by an amount equal to the spread.

Pip

The smallest price increment a currency can make. Also known as points. For example, 1 pip = 0.0001 for EUR/USD, or 0.01 for USD/JPY.

Pip Value

The value of a pip. Pip value can be either fixed or variable depending on the currency pair. e.g. The pip value for EUR/USD is always $10 for standard lots, $1 for mini-lots and $0.10 for micro lots.

Lot

The standard unit size of a transaction. Typically, one standard lot is equal to 100,000 units of the base currency, 10,000 units if it's a mini, or 1,000 units if it's a micro. Some dealers offer the ability to trade in any unit size, down to as little as 1 unit.

Heres an example of how Forex trade works: Assume you have a trading account at a broker that requires a 1% margin deposit for every trade. The current quote for EUR/USD is 1.3225/28 and you want to place a market order to buy 1 standard lot of 100,000 Euros at 1.3228, for a total value of US$132,280 (100,000 * $1.3228). The broker requires you to deposit 1% of the total, or $1322.80 to open the trade. At the same time you place a take-profit order at 1.3278, 50 pips above your order price. In taking this trade you expect the Euro to strengthen against the U.S. dollar. As you expected, the Euro strengthens against the U.S. dollar and you take your profit at 1.3278, closing out the trade. As each pip is worth US$10, your total profit for this trade is $500, for a total return of 38%. Please note that the above stateent is an illustration only.

Here is the original page from RBI site which can clear any doubts and need no advice of anyone about ligality of  Forex Trading in India.

We can trade only in currency derivatives like futures(in paring with INR. like USDINR,EURINR,JPYINR,GBPINR), not spot trading like EURUSD...and many more being Indian residents.

Thanks

Click on this link or scroll down.https://www.rbi.org.in/scriptttts/BS_PressReleaseDisplay.aspx?prid=23941

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Date : 21 Feb 2011 RBI Advisory on Overseas Forex Trading through Electronic / Internet Trading Portals

All the Forex Trading is regulated by Financial Service Commission(FSC) of every country. RBI dose not have any access or control over these FSCs.Trading in International forex is 100% Legal and RBI cannot stop this trade as it is not under its jurisdiction. 

Moreover RBI allows investment upto USD 200,000 in Commodities & Equity with International equity & commodity brokers.

Currently I am trading with NordFx In Commodities & Bullions, and till date faced no problem. It is a good firm & work in a legal environment.

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