Forex Trading not permitted & take care of brokers

#1
Dear Members

As most of you know trading forex for resident Indians is currently not permitted by RBI, there is no LEGAL way round this.

I know it is not a rationale rule but what to do ... rule is a rule.

Lots of people will give you B.S. stories about it being allowed and how the IT Dept. / Bank Officials and RBI dont know anything etc etc ... but in the end if you are caught then the person who told you its allowed will not be there to help you and will not take any responsibility, just remember that.

If you still have any doubt in the RBI press releases (although they are very explicit) please go and try to see RBI PRO for clarification.

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Next point i want to make is you have to be very careful of Forex Brokers even if you are legally allowed to trade (if you have non-resident status or have some foreign citizen trade for you or whatever)

FX is largely unregulated even with the CFTC & NFA and all that. Firstly the NFA & CFTC are largely unlikely to entertain complaints from us Indians (being foreigners) & secondly even US citizens have lost money despite being regulated by these agencies.

Earlier Futures accounts were safe because the broker had to mark to market at the end of each trading day, but then Man financial went bust and account holders lost their deposits and then MF Global went bust and depositors lost their open trade profits plus part of their deposits and recently PFG went bust.

So if even futures accounts are not really safe what are the chanced of Forex accounts being safe? .... so be careful.

Lastly if after reading this & being aware of the very real possibility you could lose your account but you still want to trade I'd urge trade with a bank. ... (not sure if they all of them accept indians)

Or go to a broker who accepts a bank guarantee where you keep 80% of your money in your bank and only deposit 20% of the money with the broker.
This way you at least know that 80% is more or less safe even if the broker goes bust.

If this not possible then trade with very large brokers who are well capitalized and publically listed companies, this is still a risky option and the last one you should consider.

Under any circumstances do not fall for any of the chotta motta brokers as they are largely scams.
 
#2
Please do not confuse. Forex Trading on Oversea's Brokers Like Who are Advertising online, Open Account Online and Transfer funds through Credit card and No Clarity on real address of these Brokerage firm's is banned by RBI. Since these firms will take funds in USD. Most of these online accounts offer 1:400 leverage (It's a big Trap for inveters). The Origin of Quotes (Exchange and Country) is also not clear.
However accounts operated with NSE is legal.
 
#3
Please do not confuse. Forex Trading on Oversea's Brokers Like Who are Advertising online, Open Account Online and Transfer funds through Credit card and No Clarity on real address of these Brokerage firm's is banned by RBI. Since these firms will take funds in USD. Most of these online accounts offer 1:400 leverage (It's a big Trap for inveters). The Origin of Quotes (Exchange and Country) is also not clear.
However accounts operated with NSE is legal.
You are very correct sir :)

However I said "forex trading not permitted" forex is OTC traded, please see this for full details
----->http://en.wikipedia.org/wiki/Foreign_exchange_market

I did not say "currency futures not permitted" currency futures are exchange traded please see this for full details on currency futures ---> http://en.wikipedia.org/wiki/Currency_future

If you are trading through NSE then you are not trading forex but you are trading currency futures. My post is in regard to forex.

Now it maybe possible that currency futures are also OTC traded but I have not come across that, but you clearly mentioned NSE so I'm assuming you mean exchange traded currency futures.

Some prefer currency futures but in my personal opinion at the present time there is nothing to beat the power of forex in this world currency futures do not come close.
 

sangram1705

Well-Known Member
#6
ya,
futures trading carries more risk of heart attacks due to gap up/dn opening. to make things worse we dont have GTC stop loss orders.
sp, should we presume that forex trading is not as risky as futures trading.
 

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