What Is Forex Trading for Beginners in India - Strategies, Platform, Meaning, & How to Start

Published on December 24, 2025 | 4 min read

The broader market was trading higher in early deals, with the Nifty Midcap 100 gaining 0.60% and the Nifty Smallcap 100 advancing 0.59%. Image: Shutterstock

When Reliance Industries imports machinery from Germany, it pays euros. When TCS receives payment from American clients, it gets dollars that must be converted to rupees. This constant currency exchange happens in the world's largest financial market, ‘forex’. The term Forex is derived from the combination of the words foreign and exchange.

Today, more and more Indians want to explore Forex, but hesitate because they are not fully aware how it works, what the rules are and whether is it even legal. However, understanding forex trading can open a new world of investment opportunities.

What is Forex Trading?

Like the stock market, Forex is a dynamic market. Here, currency exchange rates keep changing constantly. In Forex trading, you buy and sell currencies to gain profit from exchange rate changes. A trader must simultaneously buy and sell of currencies in pairs like USD/INR (US Dollar/Indian Rupee) or EUR/INR (Euro/Indian Rupee).

Open FREE Demat Account within minutes!

Join now

The Indian Legal Perspective

With all the curiosity around, the first thing to know is that Forex trading is legal in India, but with certain rules. In India, you are allowed to trade only those currency pairs that involve the Indian Rupee. These include USD/INR, EUR/INR, GBP/INR and JPY/INR.

A quick note,

USD is US Dollar
EUR is Euro
GBP is Great British Pound
JPY is Japanese Yen
INR is Indian Rupee

Currency can be traded on both the Indian exchanges, the NSE (National Stock Exchange) and BSE (Bombay Stock Exchange), through SEBI-regulated brokers. (SEBI – Securities and Exchange Board of India)

However, trading in international currency pairs such as EUR/USD or GBP/USD is not allowed for security reasons.

How does it Work?

In forex trading, you buy if you think the base currency will rise in value. Conversely, you sell if you think the base currency will fall. The profit or loss comes from how much the exchange rate changes after you make your trade.

For example, if you think the USD will rise against the INR, you buy USD/INR. If you think the USD will fall, you sell USD/INR.

Forex also offers leverage, letting you control large volumes with small capital. But this multiplies both profits and losses. Hence, risk management is utmost warranted.

How to Trade in Forex

You can trade in forex by applying different strategies, like

Trend following: It means going with the flow. If the dollar keeps getting stronger against the rupee, you buy and hold until the trend changes direction.
Range trading: This works when prices move up and down within a fixed range. You buy low and sell high.
Breakout trading: This is when you buy or sell after the price crosses an important level, expecting it to move strongly in that direction.
News trading: This strategy takes advantage of price movements after big announcements like interest rate decisions or US jobs data.

Remember, be it any strategy, risk management is the most important rule. To be on safe side, never bet more than 1-2% of your money on one trade and always set a stop-loss to limit your losses.

Exchange Trading Hours

On weekdays, Indian currency exchanges operate from 9:00 am to 5:00 pm IST. The afternoon session (1:30 pm to 5:00 pm) witnessed high activity when European markets opened. This time, liquidity and volatility are both high.

This overlap period is ideal for active traders. However, global markets continue after Indian exchanges close, creating overnight gap risk. The best trading window is typically 2:00 PM to 5:00 PM when liquidity is maximum.

Trading Platforms

Open a trading account with SEBI-registered brokers like Upstox. These platforms provide charts, technical indicators, real-time quotes and mobile apps. Also, the brokerage is low, supported by these platforms is good and it uses robust platforms.

Forex trading offers Indian investors opportunities to participate in global currency markets with a robust, regulated framework. By understanding the dynamics of the Forex, by understanding how it works, using the right strategies and abiding by the trading hours, you can start your trading journey here. Remember, like in any trade, disciplined risk management is important.

Focus on getting educated on the basics and continuously update yourself with developments around.

About Author

Pradnya Surana

Sub-Editor

is an engineering and management graduate with 12 years of experience in India’s leading banks. With a natural flair for writing and a passion for all things finance, she reinvented herself as a financial writer. Her work reflects her ability to view the industry from both sides of the table, the financial service provider and the consumer. Experience in fast paced consumer facing roles adds depth, clarity and relevance to her writing.

Read more from Pradnya

About Upstox

Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.