Should you trade USD/INR?

Although forex trading was once a point of contention in many parts of the world, due to some suspect brokers and fraudsters that promoted it as some sort of get-rich-quick scheme or took advantage of novice traders, that is no longer the case. Trading currencies on Indian exchanges is something that has been gaining traction and becoming more prominent in recent years, which explains the growing interest and questions surrounding trading the USD/INR currency pair. It is widely known that trading US Dollars in the USA and many other parts of the world is a common starting point for many, as the USD forms part of the major currency pairs. Therefore, the question of whether or not to trade USD/INR is expected.

While trading decisions should be based on the research you have conducted and your chosen strategy, noting some of the benefits of trading this currency pair could guide your thinking. It is important to note that currency pairs are largely influenced by several factors, such as the countries’ monetary policies, economic conditions, political conditions, exchange rates and external trade activity, amongst many other macro factors. That being said, the bid-ask spreads for the USD/INR are relatively low, which reduces the liquidity risk. Additionally, this particular currency pair is known to be quite liquid, which means that it can be easily bought and sold without having a major impact on its exchange rate. Another benefit of this pair is that it is based on the transparent market mechanism, which is recommended for individual traders who might not necessarily have extensive access to information and insight tools. Moreover, the convenience of being able to trade the USD/INR pair easily through a credible broker or an online trading platform is another drawcard for many.

How to start trading USD/INR

So, if you have done all the necessary research and preparation for starting your trading journey, particularly if you are looking at the USD/INR currency pair, you will be happy to know that although it is not considered one of the major forex pairs, it is listed amongst some of the most profitable. As such, it is also named amongst the most popularly traded currency pairs. When trading the pair in the derivative market, you can purchase currency choices on the Indian Rupee against different currencies, such as the EUR and GBP, which are known as two of the safe-haven currencies. You can purchase a call and put alternatives on the USD/INR pair through your broker or trading platform.

It is important to note that throughout your trading journey, you should prioritise real-time updates on the markets and the various factors that influence the performance of the USD/INR. Depending on the strategy you have opted for, that will determine how you react to market conditions; ideally, taking a more proactive and forward-looking approach to trading is advised. This would mean that you can anticipate any potentially lucrative opportunities and avoid the adverse, however, that is a skill and expertise that traders can learn over time, especially with the right guidance and understanding of the forex market.