Buy & Sell Currency in Zerodha
In our previous article, we have already learned about currency trading and in which currencies you can trade in India. Therefore, today we will cover How to Buy & Sell Currency in Zerodha or What is Zerodha Currency Trading? The first thing to do when you’re going to trade on Zerodha. But before you start trading have you activated the Currency segment or not? To trade in Currency on NSE/BSE your currency segment should be activated then only you can trade in currencies. Before we let you know how you can activate the segment of Currency trading and begin with trading let’s do a recap of Currency Trading.
What is Currency Trading?
As the name suggests currency trading, means you always need to deal in pair of currencies while trading in this market. This market involves participants from around the world. Under the Indian scenario to trade in the currency market, is to take a position on a currency pair. Currently, you can trade in currency derivatives in form of futures or options contracts instead of stocks. Most importantly, the only pair of currencies available for trading in India are USDINR, EURINR, JPYINR, or GBPINR. For instance, the INR/USD rate represents the number of Indian rupees required to buy one US Dollars. If you think the US Dollar price will increase in value against INR, you buy US Dollars with Indian Rupee. In India, futures are the preferred ways of trading in the currency market.
Few things you should know before you kick start your trading in currencies on Zerodha:
- You should be aware of your risk appetite and risk tolerance as it’s key to forex trading so you know to set your limit before you start.
- In India, you can trade in currency pairs only so it’s best to specialize in one currency pair first to understand the dynamics of currency movement. Once you excel then you can unfold other pairs of currencies in your foray.
- Start with a small amount and a small lot. Once you start booking the profits by understanding the movement in prices you can start taking a bigger risk.
- Avoid indulging in overtrading or doubling up positions. When you overtrade you end up paying only to the broker instead of making profits. Secondly, when your position goes wrong you try to average out your position hence you double up your mistakes.
- You need to understand how the currencies move and the factors which determine the currency movement.
How to Activate Currency Segment in Zerodha?
To start currency trade your currency derivative segment should be enabled on your app then only you start with it. Therefore, to activate the segment you need to upload your income proof and follow the same steps:
- Go to the Profile section and click on Manage Tab under Accounts.
- It will redirect to Console Zerodha. After that, choose a segment and tick Currency NSE Exchange. Further, click on the continue button.
- It will ask you to confirm your income range and income proof.
- Accept the terms and conditions and click on the continue button.
- It will take 24-48 hours for your currency segment to activate.
How to Buy & Sell Currency in Zerodha?
Time needed: 1 minute.
Here are the simple steps involved in buying or selling Currency in Zerodha. So let’s get started on “how to buy currency in zerodha“?
- Open the Zerodha App on your device
To start with trading you can use Kite login either on mobile or on desktop as per your convenience.
Key in your Username, Password followed with a Pin.
- Add Contracts to your Watchlist
Type the currency pair name in the universal search bar tab on Kite App. For example, if you type USDINR you will see all available contracts in the dropdown. To add them to a watchlist just click on the sign “+” and it will add to a watchlist.
- Analyze the Key details of the Contract
For currency, the expiry date is usually on a Friday or one day prior if it is a holiday so you need to square off your position before the expiry of the position before 12:30 pm. It’s better to trade in intraday in the currency this market is quite volatile.
- Click on the Buy option
Once you have analyzed the contract, you can click on the Buy option and fill in your order details. It’s better to do intraday trading in currency and in case you like to limit the contract then enter the limit price and swipe to buy. At the bottom of the screen, you can see to buy one lot you need to maintain a margin of 1730 Rs. In a day if the price reaches Rs.74.3 then only it will execute by 5 pm or else it will cancel on its own.
- Similarly, you can place Sell Order:
Fill in your order details and click on a Sell order. You need to choose the quantity, limit price, or market price in case want to buy a contract on the ongoing rate.
- Order Placed
Once you swipe Buy or sell, depending upon the limit price, it will send the order to exchange for execution. By day end, your limit price strike then only the order will execute or else it will stand to cancel.
Hope you like this article to start your journey with the Currency market and we making your life a little easy with this simple & detailed article.
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