The forex market is full of potentials, but with risks. More and more individuals in India have started showing interest in forex trading these days. Once you decide to start forex trading in India, the first thing you need to do is find the most ideal broker for you and open a trading account. After that, you can fund your account with the minimum deposit and start trading currency pairs. So, first you need to know how to open an account. However, before you get into the guide to forex trading account opening in India, you must first understand what a forex trading account and a demat account are, and the difference between them.
- Demat account – This account dematerialises the assets of investors by converting them from physical format to digital format. You can open this account with zero balance in account. It functions similarly like a bank account. While the money transactions are recorded by a bank account, demo accounts record the purchases and sells of assets.
- Trading account – you can open a trading account with a registered broker. Trading is like a link between your bank account and demat account. A trading account is required to execute transactions. When you purchase assets, you can place the order through this account.
The main difference between these two accounts is, when you purchase assets worth a certain amount, the money gets debited from the trading account and the assets are stored in an electronic format in the demat account. You only need to open a forex trading account to start trading in India.
An Introduction to Demo Account
Demo account is an essential part of risk management, especially for beginners. If you are a newbie and do not know much about trading, then it is normal to make many mistakes in the beginning. These mistakes can cost you to a great extent and your account can be wiped out from a single trade. To deal with this situation, it is always recommended to practise trading in a risk-free environment.
Most online brokers offer the facility of demo accounts these days. A demo account or a practice account is a space where you can trade with virtual money provided by the broker. Apart from the fact that you cannot earn or lose real money, this account resembles a live account in all other aspects. So, you can test the unfamiliar trading platform, as well as new trading strategies on this account. Since you do not have to deal with real money, you can trade without the risks of losing the capital in your trading account. A demo account offers several other benefits like unlimited usage, real market conditions, and access to trading platforms on webtrader.
To open a demo account, follow these steps –
- First, visit the homepage of your broker, and then click on ‘Try Demo’ or ‘Open a Demo Account’.
- Just like live trading account, you will be redirected to an account opening page. Provide personal details to fill in the account opening form here.
- After that, you can just click on ‘Register’ to open your demo account.
Step by Step Guide to Opening a Forex Trading Account in India
So, now you know that you need a forex trading account, the next thing you need to do is find out the best forex broker. Look for these qualities when you are looking for the best forex broker in India:
- Registered and authorised by top-tier financial bodies
- A brilliant goodwill among industry experts
- A high leverage ratio
- Minimum margin requirements
- Segregated account for clients’ funds
- Call and trade facility for clients
- Protection against negative balances
- Access to all currency pairs legally allowed in India
- A high execution speed
Once you have chosen a broker, you can open a trading account easily by following simple steps –
- Visit the Broker: First, visit the official website of your preferred broker. On the homepage, you will come across a button with a phrase like ‘Sign Up’, ‘Start Trading’, ‘Register’, or ‘Open an Account’. To start the account opening procedure, click on the button.
- Submit Details: Once you click on it, you will be redirected to the account opening page, where the broker will provide you with an account opening form, as well as a KYC (Know Your Customer) form. You need to fill up the form with necessary details. Enter personal information like first name and last name, address, contact details like email and mobile number, and more. After that, you can register with the broker.
- ID Verification and KYC: On the next step, it is time to submit your identity proof and residence proof for ID verification. In some cases, you may also need to submit proof of income. As for the documents, you may upload a photocopy of any kind of i-card for identity proof; and any kind of utility bill for residence proof. A PAN card is mandatory to open a trading account. Apart from that, you may submit a passport or an Aadhar card. Usually, the passport is better for the ID verification because the broker can approve it faster. Moreover, sometimes, the proof of residence is not required if passport is submitted. If it is still needed, you may just submit a bank statement. After that, you can opt for a manual or e-KYC verification.
- Activation of Trading Account: After you complete the ID verification process and the KYC verification, it usually takes 3 or 4 days for the trading account to be activated. Once the account is activated, you can deposit money into it and start trading.
Best Forex Brokers in India to Open a Forex Trading Account
Some of the best brokers you can open your account with in India include –
- IG: Founded in 1974, the top-notch online trading provider offers flexible access to reliable execution over an extensive collection of global markets. The broker offers a well-designed trading app so clients can enjoy trading from anywhere and anytime. IG protects its clients’ funds in segregated accounts and the money also remains ring-fenced from its creditors. You may open an account with IG by clicking here.
- eToro: eToro allows its ten million users to trade forex pairs at low spreads starting from pip. The broker also provides high liquidity and flexible leverage up to 1:30. Thanks to the multi-regulated trading platform, clients’ funds are protected. You may start demo trading on its demo account with $100,000 virtual money. Visit eToro’s official website to open a trading account and start trading by clicking here.
- Saxo Bank: Saxo Bank offers ultra-competitive spreads for forex trading, starting from 0.6 pips. The broker comes with top-tier liquidity that provides higher fill-rates, great price improvements, and lesser premature stop-outs. The trading platform offers sophisticated features like news feeds, integrated trade signals, and innovative risk-management tools. You may open a trading account with Saxo Bank by clicking here.
- Interactive Brokers: Interactive Brokers offers deep liquidity and live quotes from the largest forex dealers in the world for its clients. At the same time, the traders are provided with tight spreads and professional forex trading tools. The broker allows its traders to trade with low commissions without any hidden spreads or markups. You may open a trading account with Saxo Bank by clicking here.
- Forex.com: Forex.com offers several types of accounts for its traders including Standard, MetaTrader, DMA, and commission. It is one of leading brokers in the global forex industry that allows its users to trade forex at competitive spreads starting at 0.8 pips. Thanks to leverage trading provided by the platform; traders can gain full exposure with a small minimum deposit. Open an account with Forex.com by clicking here.
After you gain experienced with the demo account, you can follow the steps mentioned in the earlier section to open your live trading account you start trading in India.