Zebu blog

Tag: Forex Market

  • Why The Rupee Is Falling And What It Means For You

    The value of the rupee goes down every day. This year was the first time it went up to 80 against the dollar. Due to several global economic factors, the Rupee has been fluctuating and eventually, it hit a new record low and went past the psychological 80-per-dollar mark.

    What does it mean for a “rupee” to “drop”?

    When the Indian rupee loses value against the dollar on the foreign market, what does it mean for the economy? This means that when India imports from the U.S. or any other country, it will have to pay more because the payment is made in dollars. In other words, less import will cost more.

    India imports a huge amount of things: 20.96% of its GDP. Mineral fuels, oils, electrical equipment, nuclear reactors, mechanical appliances, jewellery, and many other things are among them. Since all of these imports are paid for in dollars, the fall in the value of the Indian rupee against the dollar is having an effect on these industries.

    1. Energy

    Over 85% of India’s oil and 50% of its gas come from outside the country. As the value of the currency goes up, this industry is losing money. The prices of crude (Indian Oil, BPCL, HPCL, RIL, and Nayara) and gas (GAIL and GSPC) may go up for companies that buy them.

    2. FMCG

    About half of the costs come from importing raw materials like crude oil and palm oil derivatives. Businesses are now raising their prices to make up for the higher costs of the things they use.

    3. Technology

    India will buy an average of $56.73 billion worth of electrical and electronic goods from other countries. A huge 40–60% of all input costs, including component costs, come from outside the country. This number goes up to 70–80% for cellphones. Since the value of the dollar has gone up, they may cost more.

    4. Telecom services

    Importing network equipment costs the telecom industry about $6 billion per year. When the rupee falls in value, the cost of imported goods goes up.

    5. Alternative Energy

    Most of India’s solar power projects use imported solar cells and modules. Because of this, the cost of the project will go up. For example, the next bids will have higher tariffs.

    Why is the rupee going down?

    The main reasons for this rupee depreciation are the rise in crude oil prices, the withdrawal of foreign capital from the Indian market, and the regularity of business in India. Early stock market statistics show that foreign institutional investors sold more than they bought on the capital market.

    What difference will it make to you?

    The price of imports will go up because the rupee is losing value. Since the rupee has gone down against the dollar, importers will now have to pay more for the same thing at the same price and amount. Those who wanted to study abroad during this time would have to pay more for tuition. People who live abroad but have family in India will pay more to send money to them because they send more rupees overall. But when the rupee falls, the cost of exports goes down.

  • The Impact Of Inflation On The Forex Market

    The foreign exchange market, or forex, is a very volatile place. Volatility is what makes liquidity on the forex markets. As liquidity goes up, your chances of making money on your investments go up. But inflation is the main thing that is keeping the FX market from going up. This makes things hard for forex traders. Because of this, online currency trading also suffers.

    The rising rate of inflation around the world has caused a major Forex crisis that has messed up all previous financial calculations. The forex market is having a hard time right now because investors are getting scared and moving their money to safer places like fixed-income securities and gold.

    Inflation Across the Board

    When prices go up past a certain point, this is called inflation. This is what happens when a currency tends to lose value. Because of this, prices have gone up. When currencies lose value, the prices of goods slowly go up over time. The rise in commodity prices makes it harder for people to buy things. This is called the “depreciation of capital.” In this situation, online forex trading, which was once a priority for a forex investor, is now a liability. When people can’t buy as much, the market is more likely to get out of balance because the demand for foreign currency drops. When people’s ability to buy things goes down, inflation is more likely to start.

    This is true for both stock markets and FX markets. If you planned to open a demat account because you wanted to make money on the stock market and inflation is taken into account, the same no longer holds true. Some people think that the current situation in the world is just a sign of an upcoming recession. This is backed up by how investors act all over the world, not just in India. Most investors are told to put their money in “safe” things like gold and oil.

    Events around the world and money

    Not only is inflation making things worse, but there are wars happening all over the world, which makes it harder for global currency markets to recover. Investors are more worried than ever because of the conflict between Ukraine and Russia and, more recently, China’s recent military actions on Taiwanese soil that are seen as a provocation. So, fear of a recession caused by events around the world is a big reason why prices are going up. Recently, investors were looking forward to starting online currency trading as a result of the end of a global health crisis. However, more problems came up, and investors stopped trading again. Because everyone is worried about inflation, the expected boom in IPOs has also died down.

    How Inflation Affects Foreign Exchange

    Online forex trading has suffered a lot, just like many other types of business. Forex is an “over-the-counter” digital market where currencies are bought and sold. Since forex is traded in pairs, the value of each currency is judged in relation to the other currency in the pair. The value of a currency is based on how well the economy of the country whose currency it is is doing. When you buy a country’s currency, you are actually buying a piece of that country’s economy. If you think a currency has good prospects, you are more likely to buy it. You won’t invest in a country’s currency if it has inflation, which has happened in a lot of countries in the past few months.

    Various Investments

    Inflation can make it hard to do any kind of financial business, like trading currencies. Even if you can’t trade on Forex right now, you can still open a demat account with Zebu and invest in the stock market, which seems like a good idea.

  • Top Forex Trading Mistakes To Avoid

    India has recently become a popular destination to trade currencies online. More and more people want to profit from changes in currency prices, so they are getting into the currency market. If you want to start doing intraday trading in forex, this post is for you. Here are some of the most common mistakes that both beginners and experts make, along with suggestions for how to avoid them.

    1. Relying on leverage a lot

    There are two things to know about trading with leverage. You may be able to open a big position with a small amount of the transaction’s value. If the deal goes well, using a lot of leverage can help you win a lot more. But if the deal doesn’t go as planned, you could also lose a lot of money.

    To avoid making this mistake, you should always be careful about how much leverage you use. You should only use leverage if you can afford to lose it. In this way, you can protect yourself from large losses a lot.

    2. Ignoring technical indicators of trading

    The daily price changes on the currency market are affected by technical factors. Online forex trading is a sure way to lose money if you don’t know about or pay attention to technical trading indicators.

    To avoid this mistake, base your trades on technical indicators like MACD and candlestick patterns. This will help you predict how prices will move and make the right changes to your holdings.

    3. Trading for revenge

    Losses are a part of investing online that can’t be avoided. This is true even when it comes to the currency market. But when they lose money, a lot of traders give into revenge trading. Revenge trading is the act of trying to make up for losses by increasing trading capital.

    But this is not a good idea. If you give in to your feelings when trading, you will make bad decisions. To avoid this, you should always take a few days off after a loss to heal. In the meantime, think about and reevaluate your losing trade to figure out where you went wrong. Because of this activity, you will get better at trading.

    4. Taking positions before the news comes out

    This is a mistake that a lot of traders, especially new ones, tend to make. They make trades right before important news comes out so they can make money off of the volatility. Most of the time, though, that kind of move doesn’t work.

    During times of high volatility, when you trade forex online, the price changes may come as a surprise. Even if the news is good, the changes in the price of the currency pair might not be right.

    The best way to avoid making this mistake is to avoid trading before any news comes out. Wait until the news event is over and the market has calmed down before making any trades.

    Conclusion

    Before you start a forex transaction, you should always make a plan and stick to it. Put in place the right stop losses as well to lower risks. So, if you want to learn more about FX online trading, you should contact Zebu right away. For forex trading, you need a demat account and a trading account. Both of these can be opened online in just a few minutes.

  • The Common Misconceptions About Currency Trading In India

    Trillions of dollars change hands every day on only one market – the forex market. If you’re interested in trading foreign currency online, this post is for you. Here are 10 of the most common FX trading myths.

    1. It’s easy to trade in forex.

    This is one of the most common misconceptions about forex trading. But it’s just plain false. Foreign exchange trading is hard and requires a lot of market research, planning, and knowledge of how the market works.

    2. It is necessary to predict movement

    Traders who do their FX trading online often make this mistake. They think that if they can predict how the market will move, they can make more money. But it’s really not that easy. Instead of trying to guess what will happen, it’s easier and more accurate to just follow the trend.

    3. You must make a substantial investment.

    One of the good things about the FX market is that you don’t have to spend a lot of money to trade there. In reality, the way the market works is based on the idea of leverage. Leverage is when you put in a small amount of money but can take on positions that are much bigger than what you put in.

    4. Using more leverage is smart.

    In line with what was said before, many traders think that the more leverage they use, the more money they could make. Even though this is true, the same strategy could also fail. For example, if your position doesn’t go as planned, you could lose a lot of money because you have more money at risk.

    5. You must always keep an eye on the market.

    This is another one of the most common mistakes people make when they trade FX online. Even though the market is open all the time, you don’t have to keep an eye on it all the time. Just set aside a certain amount of time every day and use it to keep track of what’s going on.

    6. It’s easy to get rich quickly.

    People often think that trading forex online will make them rich right away. But that’s not the case. To do well and make money, you would have to be very focused and do a lot of research.

    7. The most advanced forex strategies always work

    Even though they have their place and time, complex techniques may not always work. Your goal and the direction of the market should be the main things that tell you what strategy to use.

    8. The forex market is rigged

    If you make a few bad trades, you might start to believe this false idea. But it’s just a myth; there’s no truth to it. Because the forex market is so big, it is impossible for one business or a small group of businesses to control it.

    9. You can use the strategies of other people.

    Trading foreign currencies online is not as easy as it looks. Since traders’ expectations and the way the market is moving now may be different, the strategies that work for one trader may not always work for another. It is always better to come up with and use your own approach instead of copying what others do.

    10. The more trades there are, the better your profits can be.

    You don’t have to do a lot of deals to do online FX trading. If your plan is well thought out and your goal is reasonable, you can make money with just a few trades each month.

    Conclusion

    After the myths about it were busted, you can now join this financial market and start trading FX. To trade in FX, you would need a demat account and a trading account. You can quickly open a trading account and a demat account at Zebu.