Online Forex trading has become a significant source of income for many people, ranging from traditional employees in 9-5 jobs to work-at-home parents and people in between jobs.

The Futures market (which is not deliverable) and the OTC market are the two platforms (Over the Counter). The market of futures is dominated by exchanges such as the BSE, and  NSE, MCX, while the OTC market is dominated by the banks.

• What are OTC Trades?

Trading of an official exchange that takes place between a buyer and a seller outside is known as over-the-counter (OTC) trades.

OTC derivatives allow traders to tailor the parameters of the contracts they trade, allowing them to go beyond basic futures products. 

Traders usually work through a network of dealers who negotiate these agreements one-on-one. 

OTC trading may put both parties at risk of counterparty default if they do not employ the services of a clearinghouse, despite the fact that it gives more freedom and potentially reduced trading costs.

• How is the direction decided?

The Reserve Bank of India interferes in both of the markets to reduce extreme volatility and foreign currency buildup. 

The direction of the market is determined by inflows and outflows.

Interest rates, economic performance, policies of the central bank’s actions are pursued by the central government. The policies that are pursued by other central banks are the Fed, BoE, and ECB.

The political situation in the country, the movement of the dollar index, the important economic data from the US, UK, and Eurozone, the value of oil and commodities, and all other important events taking place in the country determine the longer-term direction.

Conclusion:

Online Forex trading is getting more and more popular with each passing day. However, it is important to know that there are risks associated with every investment. People who are aware of the risks of forex trading online are more likely to make smart decisions about their investments.