Prakash,
1. RBI has rung the death bell for forex trading in india. Forex trading is not permitted by Indian resident. There is no doubt about it. The 200000 $ liberalized scheme cannot be used for margin trading.
2. Forex is a risky business. So even if you get by the regulators, there is a strong chance that the market can still eat you up (90% accounts are busted).
3. In case you still decide to take the plunge, get an ECN broker. Pay commisions as you trade. Fixed spreads brokers are bucket shops who will finally trade against you.
google "ECN brokers"
4. Get a demo account and trade profitably atleast for 2 months. Trading profitably for two months may take six to one year of demo trading.
5. Dont over leverage your margin. Risk only 2- 5% of the available equity. So if you have a 1000 USD acount, deal only in micro lots which may give you a dollar per pip, but will take away only a dollar, when the market moves against you. Staying as long as possible in the market is the trick.
RBI ruling is nothing new in India.The law was there since nineties regarding forex margin trading.People have been trading under the guise of capital a/c transactions.As there are a lot of loopholes in the law itself,there has never been a crackdown on the violaters ie fx traders.(RBI doesn't want to waste time chasing traders who trade peanuts volume.They would rather chase hassan ali's and big fishes.And once you become a big fish trader who earns more than 200000 $ there are legal means and ways to trade.)
ECN broker doesn't mean an honest broker.There are ECN's who increase the spreads ridiculously upto 15-20 pips,blaming the real market and inter bank prices (whereas there are quite honest MM'S out there,who work on fixed 1 pip or even lesser than that.)End of the day, it is all about profitability and your search for finding a good broker.Deploy your capital with 4-5 brokers and test each platform is the only way to find a good broker.
Demo a/c lacks the emotional connection that can only be created trading with your own funds.Better to go for a cent a/c (offered by many brokers these days)and trade in cents rather than playing demo games.I mean there are people who made millions on a demo but failed miserably when it came to live.
Market cannot be blamed for traders going bust.It is because of poor money management,lack of skills and emotional trading.Market treats the very successful trader to the newbie fairly without any bias or favour.So if one is determined, forex is just another business where success ratio is only 10% as with all the business.
cheers:thumb:
