Attention! - Forex trading is illegal in India!

[findvikas]

My legal process with RBI & FEMA is still pending... lets see how that goes.

 

[cooldudeRE]

My legal process with RBI & FEMA is still pending... lets see how that goes.

i am looking forward to hear from you on this. i must say you are doing a favour to many forex traders like myself by takin trouble & gettin this info. thnx

P.s. I am a full time forex trader but reluctant to increase capital substantially.

 

[desifxtrader]

Nothing stops the argument until you have a document from RBI clearly stating that Funds sent to international accounts for Margin funding is LEGAL. I spoke to Alpari's New Account Head today and he cleared my doubts.
This link only advertise that Alpari got a local branch.. it does not state whether its legal to use Alpari for Margin funding
http://www.business-standard.com/india/news/alpari-launches-forex-trading-platform-in-india/64289/on
What he told me is that we are providing account with as low leverage as 1:1 and allowing client to increase leverage if they like to but he had no word on legality of it. I confirmed if RBI catch you then you are on your own. They are here just for offshore client capturing. They are just marketing guys for Alpari UK and all the funds will be transferred in USD terms and remittance will be sent also in USD terms.
So whomsoever says Alpari is legal... please think again. They are legal if you are trading with 1:1 leverage and I burst out laughing.. he might feel awkward but so was his comment.. who want 1:1 leverage in FX world ? Think again..

Hi,

Thanks for the post. Obviously, it depends upon the individual's discretion if they want to trade Forex or not. If he is willing to start trading, he'll start doing it when the the facilities are available and the broker is within reach (i.e., in country).

First of all, let's do a quick review:

Question: Who this fellow 'Alpari'?

Ans: [As on the website] The Alpari Group is one of the fastest-growing providers of foreign exchange (Forex, FX) online trading services, serving retail and institutional investors. Alpari (UK) was established in 2004 and is authorised and regulated by the Financial Services Authority (FSA). Alpari (US) is registered by the US Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM) and is a member of the National Futures Association (NFA). Alpari Emirates is licensed by the Department of Economic Development, Dubai.

[As per my knowledge] one of the biggest brokers for Forex trading.

Now, when this guy 'Alpari' quietly sneeks into our country (most probably thru the borders), opens up a small 'thela' shop in a remote village (people call it 'Mumbai') of India that too without any legal permission from the Govt., Hmmm, very Bad thing.

Most probably this fellow managed to cheat the Govt., & RBI and didn't come under their radar. May be we should tip the RBI or the Tax dept., here (anyone having their contact numbers?) I was amazed at the press people - how in the hell they managed to catch their news and their intent!!

... who want 1:1 leverage in FX world ...

=> I would. 'coz I'm dumb :rofl: - never used more than 1:5 and I admit that I'm just stupid 'coz I'd never go beyond that level in future. for anyone looking for 1:50 / 100 /500 leverage - best of luck :thumb:

moreover, when my transactions are never over US$ 20k per year, who cares how these guys are handling my money?

Listen friends, my only point is:

"it depends upon the individual's discretion if they want to trade Forex or not although the facilities are available and the broker is within reach."

happy trading

 

[findvikas]

This was NOT the original question of this thread and NOT acceptable to everyone. There are so many things available in country which everyone knows and just because facility is available does not mean you can use them. Its a question of are those facilities legal to use and that was the main question and still unanswered

Now coming to margin... even if you are using 2:1 then you are using margin which is illegal per FEMA & RBI guidelines and that was cleared to me by this guy I spoke to from Alpari.

The reason they exist in India because they are molding the rules... how?

- RBI permit capital transactions abroad
- Alpari provide that, under regulations

- RBI says do not use CC for investments
- Alpari accepts only Bank Transfers

- RBI says do not use margin
- Alpari provide margin as low as 1:1


So they are legal entity in the country because You are not criminal until you commit a crime

Keeping a knife in the pocket is not a crime, hurting someone with that knife is a crime. They are just selling you knifes and if RBI catch you then you are on your own because they are not a Registered FX Broker in India. They are a subsidiary of Alpari UK and entire trading is done in UK based servers so UK rules applies. They will escape from RBI/FEMA without any problem but you and me wont be able to do that.

As you said... it depends upon individual. and if you have to use 1:1 or even 5:1 margin then why not go with Currency Futures which provide even more leverage and is perfectly legal way to go about.

 

[desifxtrader]

This was NOT the original question of this thread and NOT acceptable to everyone.
...
...

The reason they exist in India because they are molding the rules... how?

- RBI permit capital transactions abroad
- Alpari provide that, under regulations

- RBI says do not use CC for investments
- Alpari accepts only Bank Transfers

- RBI says do not use margin
- Alpari provide margin as low as 1:1


So they are legal entity in the country because You are not criminal until you commit a crime

Keeping a knife in the pocket is not a crime, hurting someone with that knife is a crime. They are just selling you knifes and if RBI catch you then you are on your own because they are not a Registered FX Broker in India. They are a subsidiary of Alpari UK and entire trading is done in UK based servers so UK rules applies. They will escape from RBI/FEMA without any problem but you and me wont be able to do that.

- RBI permit capital transactions abroad
- Alpari provide that, under regulations

- RBI says do not use CC for investments
- Alpari accepts only Bank Transfers {Limit of USD 25,000 per calendar year}

- RBI says do not use margin
- Alpari provide margin as low as 1:1

As long as I'm adhering the above three guidelines (I'm not sure about the restrictions on margin), I am not doing anything illegal. So, no worries. In addition, when capital transactions thru wire transfer upto US$25k (amt has been revised recently) is legal AND someone is providing this service, I don't see any reason here to sit by sideline.

Moreover, RBI/FEMA nowhere it specified that:

"Residents of this country is prohibited to trade foreign currencies for the motive of profit"

In addition, in 2009, there were many revisions to the the old acts. Now, a Legal Consultant needs to sit down and revise thru all of these.

Now till the time RBI comes out with new specific & clear-cut acts, I would definitely not sit and catch flies.

This was NOT the original question of this thread and NOT acceptable to everyone.

What was the 'original question of this thread'? and how did you know that it was not acceptable to everyone?

=> in place of everyone, start writing 'I' or 'me' for expressing your views. You are NOT expressing all the members views here but only your own views.

=> 'it was not acceptable to everyone'. I'm here not to appeal everybody. NO. I'm here to express my views & opinions so is all the members of this forum. We're here not to sound/look sweet or please but to present our own thoughts and share info.

happy trading

 

[mitesh manani]

i dont meet many people who say forex trading is illegal but why does this news makes the rounds again and again?

 

[akhi kashyap]

Traditionally Forex traders have based their trading decisions on fundamental analysis which looks at both past and

present political and economic events to predict future movements in currencies.

Fundamental analysis is not easy and requires the trader to have considerable knowledge of political and economic events

and experience in analyzing both. It also requires the trader to work with a hue quantity of data. In addition, there is

considerable disagreement amongst traders over just what political and economic data is important when it comes to

predicting currency movements and, where agreement does exist, there is still often argument over how much weight each

factor in the equation should be given.

Today however traders have the option to abandon fundamental analysis in favor of technical analysis. Many people

believe that technical analysis is nothing more than a modern day extension of fundamental analysis and it is based upon

three principles:

First, many things produce movements in currency prices, including political and economic events, but the effect of

these forces has already been absorbed into a currency's price at any moment in time. In other words, there is no need

to look at the reasons for the movement in a currency price but to simply focus on the price movement itself.

Second, the price of a currency will follow a clearly defined trend which can be seen by examining the patterns which

emerge in the market over time.

 

[findvikas]

In simple words which apply to any Financial market...

Fundamentals are the fuel while technicals are the driver.

 

[desifxtrader]

Traditionally Forex traders have based their trading decisions on fundamental analysis which looks at both past and

present political and economic events to predict future movements in currencies.

Fundamental analysis is not easy and requires the trader to have considerable knowledge of political and economic events

and experience in analyzing both. It also requires the trader to work with a hue quantity of data. In addition, there is

considerable disagreement amongst traders over just what political and economic data is important when it comes to

predicting currency movements and, where agreement does exist, there is still often argument over how much weight each

factor in the equation should be given.

Today however traders have the option to abandon fundamental analysis in favor of technical analysis. Many people

believe that technical analysis is nothing more than a modern day extension of fundamental analysis and it is based upon

three principles:

First, many things produce movements in currency prices, including political and economic events, but the effect of

these forces has already been absorbed into a currency's price at any moment in time. In other words, there is no need

to look at the reasons for the movement in a currency price but to simply focus on the price movement itself.

Second, the price of a currency will follow a clearly defined trend which can be seen by examining the patterns which

emerge in the market over time.

I'd give a 50 - 50 % importance on both. There are n number of occasions on charts that could not be defined/expected with TA. Specially in Forex, we need to be very very much aware of the Fundamental aspects.

here are couple of points we need to ponder upon:

In currencies, trading without the fundamentals is just like standing in the middle of the road with binocular on eyes.

all is well, but I'm quiet not sure why this topic was posted in this thread.

happy trading :lol:

 

[akhi kashyap]

your right desi!