What Factors Affect Gold Prices?
Even though the stock market has had a rough few months, gold is still highly valued, especially in India. India is one of the two biggest consumers of gold in the world, along with China. Each year, India uses more than 25% of the world's gold. Demand for jewellery in the country goes up a lot during the wedding and holiday seasons, which often drives up the price of the item. Even if this rise in demand and price for gold is due to this, there are other factors that affect gold prices across the country. In one of its reports, the World Gold Council (WGC) said that income and the price of gold are two important factors that have a long-term, large effect on consumer demand. Some other things that can affect the price of gold are: Inflation Inflation, which is when the prices of goods and services go up, could have a big effect on the price of gold. Most of the time, inflation has a direct effect on the price of gold. Since inflation makes money worth less, the price of gold usually goes up when inflation goes up. This is because when inflation is high, people tend to store their money in gold because they think its value will stay the same over time. This makes the demand for gold go up. So, gold can also be used to protect against inflation. Interest rates Historically, interest rates and gold prices have had the opposite relationship. When interest rates go up, people often prefer to sell gold to make more money. But when interest rates go down, more people decide to buy gold, which drives up both its demand and price. Festive seasons Gold has always been seen as a strategic asset in Indian homes, and it has also become a part of Indian culture. Gold has a special place in the lives of Indian families, from being used in wedding ceremonies to being worn as jewellery on important holidays like Diwali. Gold prices go up during wedding and festival seasons because people want to buy more of it. In 2019, the World Gold Council (WGC) did a study that found that Indian families may have as much as 25,000 tonnes of gold. This makes India the country with the most gold in the world. Pleasant Monsoon Rains Studies show that rural India uses up to 60% of India's total annual gold use, which is thought to be between 800 and 850 tonnes. So, the agricultural market has a lot to do with the demand for gold in the country, and the farmers' incomes depend a lot on how well their crops do. When the monsoon rains are good, there is more demand for gold in the country. This makes farmers, who use about a third of the country's gold, buy gold to build their wealth. Reserves on Treasury Like the central banks of most other countries, the Reserve Bank of India keeps gold reserves along with their money. The price of gold goes up when the RBI starts to buy more gold than it sells. This is because there isn't enough gold and there is more cash coming into the market. A Way to Deal with Uncertainty People often choose to invest in or buy gold as a commodity when the market is volatile. This could be because of a slowing economy or trouble in the government. Gold is seen as a good alternative when other assets lose value because its value stays the same over time. Also, because uncertainty isn't a number, it has more of a psychological effect on gold prices than other factors. Politics and geography India is one of the countries that uses gold the most, so any change in the price of gold on the international market would affect how much it costs there. Investors also see gold as a safe place to put their money during times of political uncertainty or geopolitical unrest. This increases the demand for gold, which drives up its price. During times of crisis, people tend to buy more gold, which makes it a good way to store money. Other types of assets, on the other hand, would often lose value during these times. What the Rupee Does to Gold It is important to understand how the relationship between the rupee and the dollar affects the price of gold in India. Since most physical gold is brought in from other countries, the price of gold in rupees will go up when the rupee falls against the dollar. So, a falling rupee could make India less interested in buying gold. Conclusion: Gold, which is seen as a valuable financial asset, is one of the most popular ways to invest in India. Investors often turn to gold as a safe place to put their money during uncertain times like geopolitical turmoil or trade disputes between countries. But gold prices in the country are also affected by things like inflation, interest rates, and the rupee-dollar exchange rate.
Jul 30, 2022
Everything You Need To Know About Crude Oil Trading In India - Part 2
In continuation with the previous article, we discuss more about the opportunities available in trading crude oil in the commodities market. Demand for crude oil is lower for immediate delivery than for delivery in the future. Investors don't want fast delivery because it's hard to get oil to where it needs to go. Because of this, end users and investors often choose futures contracts. By entering a commodities futures contract, a trader promises to buy or sell a certain amount of crude oil at a certain price on a certain date. An example is the best way to understand the idea of trading in commodities. Example 1: Buying and selling goods to protect against risk Let's say you're a farmer who grows wheat and sells it for 500 rupees per quintal on the market. You make a good profit. Since you have a lot of rice to sell, you need to make sure you won't lose money if the price of wheat drops quickly. To protect yourself from losing money, you can buy a futures contract to sell the wheat at Rs. 500 per quintal at a later date. This is known as "hedging." Example 2: Trading goods for the sake of speculation Let's say, for now, that you are a trader who wants to trade crude oil futures. You are optimistic about crude oil (meaning you think that crude oil prices will increase in the future). A futures contract for crude oil has 100 barrels and costs Rs. 3,00,000 (Rs. 3,000 per barrel), but you don't have to pay the full amount to buy it. There must be a 5% margin, which costs Rs. 15,000. Think about a rise in the price of crude oil to Rs. 3,500 per barrel. In this case, if you spend Rs. 3,000, you might make Rs. 500 per barrel and Rs. 50000 in total. As a result, trading commodities gives traders a lot of power. The commodities market is another place where it might be profitable for crude oil prices to go down around the world. For example, if you bought an oil futures contract on December 1 with a strike price of Rs. 4520, the price of a barrel of oil dropped to Rs. 4500 But if the sale was for 10,000 barrels, you could still sell the futures for Rs. 4520 and make a profit of Rs. 100 per barrel, or a net profit of Rs. 10 lakh (10,000 barrels x 100). In order to trade oil futures, a trader must find the right exchange for the oil benchmark he or she wants to use. Oil benchmarks:The benchmark price for crude oil is used by both buyers and sellers as a standard. The three most important oil benchmarks around the world are the West Texas Intermediate (WTI), the Brent Blend, and the Dubai Crude. Exchanges: In India, oil futures are traded at the Multi Commodity Exchange, which is also known as MCX. On the MCX, crude oil is one of the commodities that is traded the most. 8500 barrels of oil, worth Rs 3000 crores, are often traded on the exchange every day. In FY19, close to 32% of the MCX's over Rs. 66 lakh crores in income came from crude oil. Every day, crude oil futures worth more than Rs. 3,000 crore are traded on the MCX. On the MCX, there are two kinds of crude oil futures: Brent crude (Main) - 100 barrels Brent crude (Mini) - 10 barrels Crude oil micro is more popular among dealers because the lot sizes are smaller and the required margin is lower. Can an individual investor buy and sell oil futures? There's no question that you only need a small amount of money to start, and the higher leverage gives you the best chance of making more money. But oil futures are not only easy to buy and sell, but they are also very volatile, which makes it hard to guess how prices will change. If your broker works with commodities and is connected to the MCX or NCDEX, you can talk to them about trading crude oil futures. It's better to start out trading with professionals and then gradually go it alone. To get started with trading with crude, open your demat account with Zebu today.
Jul 29, 2022
Everything You Need To Know About Crude Oil Trading In India - Part 1
Crude oil is one of the best commodities to trade in India because it is always in demand on the world market. When the price of crude oil goes up or down, it has big effects worldwide. Because of this, crude oil is a popular choice on all commodity markets, both for short-term and long-term traders. India and China are the two countries that use the most crude oil in the world. According to a study done every year by the International Energy Agency, India's demand for crude oil will catch up to China's by 2024. Since there are so many trades in crude oil futures, there is more liquidity. If you want to learn how to trade oil futures or other commodities, this guide is a good place to start. What is crude oil? Crude oil is natural petroleum that has not been refined. It is a fossil fuel made up of deposits of hydrocarbons and organic materials. Two things are driving up the need for crude oil: By refining crude oil, goods like gasoline, kerosene, and diesel, which are in high demand, can be made. It is also used to make steel, fertilisers, and polymers. Crude oil is a fossil fuel that can't be made again. Because of this, it is limited and can't be replaced. Some important facts about the crude oil market Compared to other things, crude oil is more volatile and has longer-lasting trends. But unless you own an oil company like the Indian Oil Corporation (IOC), ONGC, BPCL, etc., trading in crude oil futures is usually done more for speculation than delivery. It's important to know the following things about the crude oil market if you want to trade with oil in a smart way: Crude oil is one of the things that is traded the most all over the world. Since crude oil is used to make a lot of things, when the price of this commodity changes, so do the prices of those things. Oil prices are likely to change a lot more often than most other prices, which makes the oil market especially unstable. But this volatility opens up trading opportunities and makes day trading more profitable. The price of crude oil as a commodity is affected by the following important factors: Just like with other goods, the rules of supply and demand affect the price of crude oil. Costs of production, storage space, and interest rates all have an effect on crude oil prices in a way that makes storage space less important. Recently, the price of oil has been pushed down even more by a rare combination of high and steady demand. OPEC declarations: The Organization of Petroleum Exporting Countries, or OPEC, is made up of the countries that produce the most oil in the world. Some things that OPEC says could change what investors expect and cause crude oil prices to change in the short term. The value of the US dollar: The US is one of the most important countries in the trade of crude oil around the world. So, the current value of the dollar has a big effect on how much crude oil is worth in total. Politics, natural disasters, oil supply lines, and other things in oil-producing areas like the Middle East can also affect prices. More about all of that in the next part.
Jul 28, 2022
Everything You Need To Know About Thematic Mutual Funds - Part 2
A thematic fund's portfolio is made up of stocks from companies in different industries that have something to do with the theme of the fund. Some investors might not know how each of these industries is growing. You can decide if certain sectors can help you make a lot of money if you know enough about them and how they relate to the subject of the fund. So, thematic funds are a good choice for investors who like to keep up with the news and are good at researching a wide range of industries. Investors can decide if they want to put their money into a certain topic by keeping an eye on a lot of places and getting useful information. 4. Things to think about before putting money into theme-based funds Investment Goals: Before buying these funds, you should be sure of what you want to do with them. If you want the best return on your theme fund investment, you should invest for more than five years. It's not hard to see why. Any business needs enough time to reach its full potential. So, when you put money into these funds, you should have long-term goals in mind, like retiring early, paying for your child's college, etc. Investment Risks: The benefits of investing in theme funds may seem appealing, but it's important to know the risks that come with it. It is a very dangerous way to go. Because of this, people who have never invested before are told not to buy themed funds. Let's look at the main risks that come with these funds: Semi-Diverse Portfolio: Compared to sectoral funds, which don't offer any variety, a theme fund's portfolio is a bit more diverse. It does, however, offer fewer ways to spread out your investments than other equity funds, like multi-cap funds, whose portfolios include securities from many different industries. Since these equity funds don't have a theme, it's less likely that all the stocks will fall at the same time than it is with thematic funds. Some themes could take longer to develop than expected. Even if some of us can see that a theme has a lot of potential in the near future, say in the next four or five years, our predictions are likely to be wrong. It might take longer than we thought. There were a lot of brand-new funds with themes, and many investors hoped to make money from them. Even though infrastructure has been a topic for more than ten years, there hasn't been much progress. When investing in themed funds, an investor may have to wait up to 20 years to see a profit. There is a risk of time with theme funds. Expense Ratio: You need to be honest about the costs that cut into your profits. For managing the thematic funds you want to invest in, Asset Management Companies (AMC) will charge you a fee called an expense ratio. This fee is mostly used to pay for the fund's overhead costs, such as the salary of the fund manager and marketing costs. The fee is charged once a year. 5. Taxation of Thematic Funds What matters are the profits after taxes. You should know how taxes work with that kind of money. The capital gains you made when you sold your theme fund are taxed based on how long you held on to it. If you sell your investments within a year, the profits are considered short-term capital gains (STCG), and you have to pay 15% tax on them. Long-Term Capital Gain Tax (LTCG): Gains from any investment held for more than a year are considered Long-Term Capital Gains and are taxed (LTCG). Gains of up to Rs. 1 lakh are not taxed in a fiscal year. Gains of more than Rs. 1 lakh are taxed at 10%. These are the important things to know about Thematic mutual funds. To start investing in them, open your demat account with Zebu today.
Jul 27, 2022
Everything You Need To Know About Thematic Mutual Funds - Part 1
Each mutual fund is based on an asset that brings in money. Large-cap funds' underlying assets are the stocks of some of India's biggest companies based on market capitalization. In a similar way, thematic funds are made up of stocks of companies that all have something in common with a certain theme. For example, a fund with an ESG theme will invest in companies from different industries that have done well in terms of the environment, society, and the way the company is run (from technology to financial services to FMCG to Consumer Durables). Because of this, thematic funds are different from traditional investment strategies like market capitalization (large-cap, mid-cap, small-cap), style (value & growth), and sectoral investing (pharma, technology, infrastructure). As long as it has something to do with the topic, it invests in many different industries and market values. SEBI also says that 80% of a company's total assets must be invested in stocks and securities related to stocks of a certain theme. 1. What are the pros of investing in thematic funds? More options for diversification than sectoral funds. When you invest in a sector fund, your portfolio is limited to that sector, so you don't have any other options for diversification. Your portfolio will suffer if the sector is doing badly for any reason. Thematic funds, on the other hand, invest based on a theme and may include stocks from companies in different industries. This gives you a bit of diversity. For example, think about a fund whose main focus is on manufacturing. This fund puts its money into a wide range of engineering, chemical, and construction businesses. So, even if businesses in one area aren't doing well at a certain time, businesses in other areas will keep your portfolio from falling apart in a big way. 2.Returns that beat the market If the investor chooses the right theme to invest in, thematic funds may produce amazing returns. Still, we need to realise that getting the theme right is harder than it seems. It requires that you keep an eye on the things you're interested in and pay attention to the news and headlines all the time. If, after all your hard work, you really nail the topic, thematic funds could pay off in a big way for you. 3. Who is a good fit for thematic funds? Investors with a high risk tolerance: Thematic funds are one of the high-riskmutual funds. When a portfolio is put together with a theme in mind, it limits the kinds of investments that can be made. It would only be able to put money into companies with shares in that area. So your portfolio has a little bit of everything. If for some reason this theme doesn't come true, there is a big chance of losses. So, these ETFs should only be bought by investors who can handle high risk. Investors Who Want Long-Term Returns: It might take a while for a subject to reach its full potential. For example, we've known since the early 1990s that software and internet technologies had a lot of potential. But now, 20 years later, we can really see how these ideas work in the real world. So, it takes time and hard work to turn these topics into profitable investments. If you're an investor who wants to make money over the long term, thematic funds may be a good choice for you. People who are just starting out with investing are told not to put all of their money into themed funds right away.
Jul 26, 2022
The Different Types Of Mutual Funds
There are several distinct types of mutual fund schemes available today, each designed to meet the specific requirements of a particular group of investors. The majority of mutual funds fall into one of three categories. Equity Funds, often called Growth Funds These investments focus mostly on equity, often known as shares of various corporations. The accumulation of wealth or an increase in value for the investment is the key goal. They have the potential to provide a bigger return, and as a result, the investments in them should be held for a longer period of time. These are some examples: "Large Cap" funds are funds that invest largely in businesses that are already quite large and well established. "Mid Cap funds" are investment vehicles that focus on mid-sized businesses. funds that invest mostly in enterprises of a medium-sized size. "Small Cap" funds are funds that invest in firms that are not very large. "Multi Cap" funds invest in a variety of different-sized firms, including both large and small ones. "Sector" funds are funds that invest in businesses that are all part of the same "sector" of the economy. For e.g. Technology funds that do not invest in any businesses other than those related to technology "Thematic" funds are funds that invest in a certain industry or sector. For e.g. Infrastructure funds that invest in businesses that would profit from the expansion of the infrastructure sector are called infrastructure investment funds. Tax-Saving Funds Funds of Income or Fixed Income from Bonds or Fixed Sources These are investments that are made in Fixed Income Securities, such as Government Securities or Bonds, Commercial Papers and Debentures, Bank Certificates of Deposit, and Money Market instruments such as Treasury Bills, Commercial Paper, and so on. These investments are less risky than others and are good options for anyone looking to generate income. Some examples are liquid funds, short-term funds, floating rate funds, dynamic bond funds, gilt funds, and corporate debt funds, among others. Hybrid Funds These make investments in both equities and fixed income, giving investors the opportunity to benefit from the potential for growth as well as the generation of income. Some examples include pension plans, child plans, and monthly income plans, as well as aggressive balanced funds and conservative balanced funds. Other examples include these types of plans and others.
Jul 25, 2022
What Is NAV And How Is It Calculated?
If you have never invested in a mutual fund before, you might want to know what NAV stands for. NAV, which stands for "net asset value," is a term for how much each unit of a mutual fund costs. The NAV is calculated every day based on the closing prices of all the securities that the different mutual fund schemes own. Unlike share prices, which change often during trading hours, the NAV is based on the closing prices of all the securities. The expenses of a mutual fund scheme, such as fund management, administration, distribution, etc., are charged in proportion to the scheme's assets and are reflected in the NAV. How do you figure out NAV? Once you know what NAV is, you should be curious about how it is decided. A mutual fund company (AMC) asks people to join a new scheme through a "new fund offering" (NFO). In an NFO, each unit of a plan costs Rs 10. Let's say that during the NFO, different investors give Rs 1,000 crores to the AMC. The fixed issue price of Rs 10 for NFO subscribers means that the AMC gives investors units based on how much money was raised. In this example, Rs 1 trillion was raised through the NFO, and Rs 10 was set as the NAV. Because of this, the AMC issues 100 billion units (1,000 billion rupees / 10 rupees NAV) and gives them to investors in proportion to how much they have invested. So, if you gave Rs 1 lakh to this NFO, you would get 10,000 units in return. So, you now know how NAV is calculated. Let's look at this in more detail. According to the program mandate, the Rs 1,000 crores raised in the NFO are invested in a variety of assets. The market value of these assets changes every day. Let's also say that the next day, the value of the scheme's portfolio of assets goes up from Rs 1000 crore to Rs 1020 crore. For now, let's forget about the costs of the plan to keep things simple. The plan's NAV will be Rs. 10.2. (Rs 1,020 billion divided by 100 billion outstanding units) Your original Rs. 1 lakh NFO investment is now worth Rs. (10,000 units x Rs 10.20 NAV). With the NAV for the day, investors can buy or sell units in an open-ended mutual fund scheme at any time. If there is no exit load, investors can sell their shares for the same price as when they bought them (exit load is a charge applied by the scheme for redemptions within a certain specified period). In other words, NAV stands for the price at which investors can buy or sell units of a mutual fund. What does the net value of an asset mean for investors? Does the NAV really matter? NAV is the only thing that decides how many units you get for your investment amount. As an investor, you should care more about the value of your investment than the number of units you own. The growth of a scheme's NAV is more important than the NAV itself. That is, return should be more important than NAV. The role of a fund's NAV in how well it does Some investors think that NFOs are cheap because they are sold at a NAV of Rs. 10. The NAV of a mutual fund unit is based on the value of the securities it owns and the total amount of money it has made since the beginning of the scheme. Even though two different mutual fund schemes may have the exact same portfolio of securities, they might have different NAVs but the intrinsic value of both schemes will be the same. So, the NAV of a mutual fund scheme is not a good way to measure how well that scheme has done. Before choosing an investment, an investor should always think about how well the scheme has done in the past and how much it costs overall, among other things. Conclusion We've talked about what NAV means and how to figure it out. The NAV is only used to figure out how many units will be given to your investments. It doesn't matter what the NAV was when you bought the units as much as how much their value has grown. The growth in NAV is much more important than NAV. With this information about NAV, you should be able to make better decisions about how to invest.
Jul 24, 2022
What Is A New Fund Offer In Mutual Funds?
An asset management company sets up a new mutual fund using a New Fund Offer (NFO). The way the New Fund Offer works In a new fund offer, you only have a small window of time to sign up for the mutual fund plan. Investors can buy units of the mutual fund scheme and subscribe to the NFO at a certain price during the set time. This is usually sold for Rs. 10. After the term is over, investors will be able to buy fund units at the set price. In general, subscribers to NFOs have been able to make a lot more money after being listed. Why is the NFO such a great thing? Through an NFO, the fund house asks the public for money so it can buy securities like stocks, bonds, and other financial instruments on the market. Because NFO is a new product, it costs less than the funds that are already on the market. They are like initial public offerings (IPOs), in which shares are sold to the public before being listed on a stock market. Also, the many marketing strategies used to promote them make it an opportunity that is too good to pass up. Sometimes you have to use your smarts and common sense before picking one. When to put money into a New Fund Offer? When the markets are at their best, most investors look for ways to invest in mutual funds. They want to get into the investment market, whether it's for gold or real estate, because they think it will continue to grow. But they also choose investments that make money but don't cost as much. Asset management companies (AMCs) try to make money off of this way of thinking on the part of investors. This explains why people are more interested in NFOs that seem to cost less. Investors decide that NFOs are a good way to put their money to work and sign up for them. So, the fund companies might be able to reach their goal of increasing their Assets Under Management (AUM). Things investors should think about The credibility of the fund house Investors who want to put money into NFOs must do a lot of research on the fund house. Make sure that the fund house has been in the mutual fund business for a long time, preferably between five and ten years. You can use it to look at how the fund house has done during ups and downs in the market. If the fund firm has a good track record, the NFO could do what it says it will do. Funding Goals In the fund's goals, things like the asset mix, level of risk, expected returns, and liquidity are all laid out. It helps you figure out if the NFO is possible. An NFO must give a detailed explanation of the investment process it will use for the time frame given. Simply put, it means that people who want to invest in the fund should read the offer document to learn more about how the fund management plans to use their money. If investors can't figure out what the NFO's goals are, this shows that there are problems with the way they do things. The theme of the new fund offer There are a lot of mutual fund programs in the Indian mutual fund industry. So, if you come across an NFO, you should read the fine print carefully to figure out what the fund is about. The investment topic needs to be long-lasting and different from what is already on there. But it's usually not a good idea if you find out that the new fund offer is just a copy of a tactic that has already been used. If you're interested in an NFO, it's a good idea to look at past returns. The offer agreement might or might not say anything about this. You can look at the fund based on a rate of return that you think it will get. If you have already put money into the fund, you might want to look at it every three years for the first three years. To figure out the trend of returns, you can compare the performance of the mutual fund to that of the index and peer funds. Risk involved Putting money into NFOs could be risky. NFOs don't have a track record of how well they've done, unlike existing funds, where it's easy to check the asset allocation and risks. Also, you won't know how the manager of the fund plans to use your money. If there were no benchmarks or measurements, it would be hard to predict how well the fund would do. It can be hard to know what happens to the fund, whether it succeeds or fails. Investment cost The total cost of the investment is one of the things that affect how much money you could make from it. Even though there is no entry load, you may have to pay an exit load if you want to cash in your units before the term ends. If the lock-in period is longer than your investment horizon, the exit loads may change how well your investment does. The expense ratio is another important factor. This is the fee that the fund house charges you every year to manage your money. It is best to find out if the ratio of expenses is less than or the same as what SEBI wants. The minimum cost of a subscription Most NFOs tell investors how much they need to put down before they can join. It could be anywhere between 500 and 5,000 rupees. As an investor, this could be the most important thing you use to narrow down your choices. If the minimum cost of a subscription is more than you can afford, you might want to look at your other options. In this case, you might want to choose a systematic investment plan (SIP), which is cheaper and easier to use and is part of a high-performing scheme that is already in place. Investment Horizon NFOs also have lock-in periods of between three and five years. You will be expected to maintain your investment for the whole term in such circumstances. Make sure your goals and time frame for investing match up with your investments. If you joined a mutual fund scheme, it's possible that you won't be able to cash in your units before they mature. In rare cases, you could also be charged a "pre-exit cost" or "exit load" for the same thing. If your chosen NFO lasts longer than your investment time frame, you might want to look at other options. Zebu makes it easy and paperless to invest in mutual funds without a lot of hassle. To get started today, please get in touch with us.
Jul 23, 2022
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.
Jul 22, 2022
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.
Jul 21, 2022
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.
Jul 20, 2022
Things You Should Know About The Currency Market In India
Indians know a lot about the equity and stock markets in their country. But the currency market in India is confusing to a lot of people. Understanding the basics of the Indian currency markets is important if you want to make money trading forex online. Before you do any kind of investing, you should learn how it works. In the same way that you should be careful when you first start trading on the currency markets, you should also be patient when you are learning how to trade on the stock market. You might feel nervous at first since the concept of trading with currency can be new to you. But there are some basic things you should know about the markets and how they work that can help you start investing. You might learn more from real-life situations than from any book. Because trading currencies isn't as common in India as it is in other parts of the world, there are five things you should know. 1. Is currency trading legal in India? In India, online forex trading has not become as popular as other types of investments. The main reason investors don't trade currencies is because the Reserve Bank of India puts limits on currency trading. They find that traditional equity trading, which starts when you open a demat account, is easy to understand and easy to do. But trading currencies in India is not as hard as it might seem at first. The Indian Rupee must be used as the base currency in all trades for the Reserve Bank of India to let people trade on the Forex market. The Reserve Bank of India has added GBP-USD, EUR-USD, and USD-JPY to the list of assets that can be traded. These are all cross-currency pairings. 2. Know what the different Indian currency markets are. If you want to trade currencies in India, you might not need to open a demat account. Still, you'll need a Forex trading account, which could be linked to a bank account. After you've done this, you can trade on two main types of currency markets. They include both spot markets and futures markets. Due to the limits on currency trading in India and the low profits that derivatives used in currency trading offer, investors choose to put their money on the futures market. 3. What factors affect the Indian Foreign Exchange Markets? Forex trading online is not for the cautious trader. You need to be aware of the risks because changes in currency and the economy could affect other countries. Currency prices change because of a number of geopolitical factors and events. Central banks, on the other hand, often have an effect on the Forex markets. Central banks use a variety of tools to do this, such as those that affect monetary policies, those that change the rules of the exchange regime, and those that affect currency markets. The Reserve Bank of India, which is the country's central bank, is very important to the way currency markets work. It does this whenever it needs to, keeping the Indian Rupee from losing value in the process. 4. Sign up to trade currency in India SEBI, which stands for the Securities and Exchange Board of India, is in charge of keeping an eye on the middlemen who work in the Indian foreign exchange market. If you want to trade currencies, you have to sign up with a broker that SEBI has given permission to be regulated. Brokers who are allowed to trade in currencies by SEBI must have a current licence from SEBI. 5. Trading on the Indian Foreign Exchange Market Once you have signed up with a SEBI-approved Forex broker and put money into your account, you can start trading on the currency market using the Forex online trading platforms that your broker offers. You can be successful in trading by using a number of different strategies. But if you want to trade something, it's best to start with small trades, especially in places like India, where the currency market is still growing. If you would like to get started with currency trading, open an account with Zebu today and get started now.
Jul 19, 2022