Forex trading in India

i found a sticky thread is forex illegal in India or not. but unfortunately that thread has be closed which why i making this one.

what i understand is that forex is illegal, people cannot send money to broker from bank account, if found account will be frozen. but what if i make money from online in USD and trade forex using that money? basically money will not be transfer from my bank account. will it be still consider as illegal?

and if i give my money to other people to do the trade like etoro/hotforex pamm etc will it still consider as illegal?

is there any loop hole or condition that from India people can do forex?

Why do you wanna trade spot forex EUR/USD and other? You have very liquid currency futures market its traded on exchange not OTC. What i would give for this as a Europeans to trade on your exchange standart USD/INR futures not this inverse which is traded on SGX,DGCX, CME.

Exactly! I don't understand the obsession with Spot FX. It's a good market, no doubt but there are others as well which are legally allowed to be traded.

Depends on what is prohibited - personal trading or investing in FX. Considering high profitability of certain Hotforex PAMM accounts I wouldn't take off this option from the record and would try even despite of taboo

There are other legal ways to trade spot forex. Find some prop trading firm. Prop trading firms with appropriate registration with RBI can trade intraday any market in the world including forex.

i have no interest to trade by myself. what i understand is that if i trade by myself there is almost 100% chance i will loss my all money. which why i want someone pro will trade for me. like hotforex pamm/etoro has that feature.

@Shantala, i am new at forex. like couple of month. can you tell me more details about prop trading firm?

I'm trying answer all yr questions ... 1 by 1 ...
1. If you earn USD by any mode and if you trade that amount, it is legal. FEMA prohibits resident Indians from converting INR to USD ... If you have earned USD, you can do whatever you want with it ...
2. With the same rule, whether you trade or a fund manager trades on your behalf, it is illegal as you are converting INR to USD ...
3. The one loop hole .... if you can call it a loop hole ... is ... using cash deposits and withdrawals ... That is how I'm trading ... That is how most of the traders I know are trading ...
4. Prop trading is company, which has USD reserves and they hire good traders to manage their accounts. One has to have a live account experience / statement for minimum 6 months and should have explainable and quantifiable strategy.
5. If you want some one else to manage your account, always hire / have some one, with whom you can discuss. With any broker PAM account/s, you might never be in a position to talk to the PF manager.

I hope I answered all your queries ...
Shoot if you have any other doubts ...

@howardroark

1. thank you so much for your reply. i didn't transfer money nor i convert INR to USD for trading. basically i make money from website ads and i want to invest that money to forex. if you are correct i can do forex using that money which is fully legal. can you please provide me any rules page or something so i can be 100% sure?

so lets say from online whatever i make i keep investing and after 10~15 year later from forex my earning become 100K USD. just saying as an example, not hoping to make such kind of money. in that case if i withdraw such amount of money is there any chance i can be in trouble?

3. "using cash deposits and withdrawals" i don't understand that part.

4. is there anyway i can make prop trading company? what requirement do i need?

lastly can i get any of your contact so that i can send you e-mail or something? i cannot see any private message info.

There are some prop firms, which give direct entry with some fees or deposits (without statement or strategy explanation), but to survive, you need a good strategy and experience.

Rest agree and appreciate your to-the-point answer.

@Ikima

Prop trading is for traders. It sounds like you are investor. I do not know any solution for investors who want to invest in forex other than INR pairs.

Hello Howardroark..thanks for all of details....
Could you please also explain how this Cash deposit and Withdraw works ?