Successful trading requires deep knowledge of the financial markets and well-developed skills in working with dedicated trading tools. However, another factor impacts trading outcomes even more: psychology. Formed by cultural codes and communal traditions, mental differences can affect traders’ perspectives on risks and strategies. In this article, Kar Yong Ang, a financial market analyst at Octa, summarises the impact of cultural differences between India and the Middle East on Forex traders’ behaviours and approaches.
Numerous differences exist in the cultural and behavioural landscapes of India and the Middle East. Below are some distinct cultural characteristics that have a profound impact on trading. This summary can be helpful to traders who want to enhance their strengths or work on their weaknesses.
Risk tolerance and ambitions
In India, people are inclined to choose long-term, steady growth over ambitious but risky ventures. This is why, more often than not, Indian traders opt for conservative trading strategies, minimising their risks and investing in time-proven instruments like gold, real estate, and mutual funds. In India, traders are less exposed to the attraction of highly volatile assets that ride with the hype tide.
In the Middle East, traders often opt for more ambitious trading decisions involving higher risk. The region is famous worldwide for its futuristic development projects carried out with lightning speed and fuelled by profits from natural resources. This highly dynamic environment, full of accelerated progress and innovation, drives the mentality of local traders, urging them towards more aggressive strategies and shorter timeframes.
Regardless of risk appetite, Octa, a global financial broker, connects traders with the financial markets by offering them full transparency of all financial operations in combination with some of the best conditions on the market.
Patience and self-discipline
For the ancient Indian school of thought, patience is a cardinal virtue. It comes as no surprise that Indian traders are more likely than not to successfully negotiate even the most difficult periods in the financial markets. Even when price fluctuations reach extreme levels and asset volatility is over the top, many Indian traders manage to stay in control of their emotions and continue trading as usual. This approach has its downside: by playing it too safe, traders can miss the profits coming their way.
When it comes to important decisions, Indian families often make them together. Alternatively, the elder family members have the last word on the issues regarding investment and spending. This is another reason why Indian traders are prone to careful, highly premeditated behaviours in trading and rarely chase high profits if they involve an uncomfortable degree of risk.
In the Middle East, despite the highly ambitious approach adopted by many traders, their actual behaviours in the financial markets are restrained by the religious limitations imposed by the Islamic tradition. Namely, most Muslim traders prefer to adhere to the Halal trading principles.
Halal trading is usually defined by three key aspects: no usury (or riba), no gambling (or maysir), and no uncertainty (or gharar). Some brokers offer dedicated Halal accounts for traders who want to meet all these criteria. For example, Octa, a global financial broker since 2011, has Forex trading accounts whose features are compliant with these rules and thus 100% halal.
Provided Halal trading rules are observed, Middle Eastern traders tend to focus on shorter timeframes and more volatile assets while following their strategies and keeping self-discipline regardless of market conditions.
It is worth noting that some Middle Eastern countries like the UAE and Saudi Arabia have dedicated national programs to support financial market activities, creating an enabling environment for local traders.
Innovation and technology
Despite their mentality being deeply rooted in tradition, Indian traders are early adopters when it comes to applying modern technology in trading. The local trading scene is widely exposed to various advanced solutions based on AI technology and robo-advisers. This willingness to embrace the new methods makes the local scene more flexible and adaptive since Indian traders seem ready to meet whatever comes their way regarding innovation and radical change.
Middle Eastern traders’ interest in modern trading technologies is mainly driven by their growing interest in the Forex and cryptocurrency markets. Many traders in the region now use advanced tools such as algorithmic trading, mobile trading apps, and AI-based analytics to enhance their trading strategies. Additionally, the rise of digital assets and the adoption of blockchain technology have further fueled interest in cryptocurrencies, making the local trading scene one of the most vibrant in the world.
Conclusion:
While Indian traders appreciate stable and incremental growth, their Middle Eastern counterparts often choose riskier trades and quicker results. Regardless of your trading style and temperament, Forex trading remains an accessible pursuit that can provide a supplementary source of income if you keep your emotions under lock and key and have the required knowledge and skills to navigate market fluctuations.
