Learn Trading — Answers for Pakistan's Traders
Clear, sourced answers to the questions traders in Pakistan ask most: is forex legal, is crypto halal, how to invest in PSX, KMI-30 and more — in English and Urdu.
Pakistan Stock Exchange
What are bonus shares and right shares on PSX?
Bonus shares are extra shares a company gives existing shareholders free of charge, created by converting reserves into share capital — a 10% bonus gives one new share for every…
What is a CDC account and how does it protect my shares?
The Central Depository Company of Pakistan (CDC) holds PSX shares electronically. Most investors have a CDC sub-account opened through their broker; shares in it are in your name…
What are ETFs and which ones trade on PSX?
An exchange-traded fund (ETF) is a fund that holds a basket of shares tracking an index and trades on the exchange like a single share. PSX's first ETFs launched in 2020 — the…
How do I apply for an IPO on the Pakistan Stock Exchange?
You can apply for a PSX IPO online through PSX's e-IPO system or through your broker or bank during the public subscription period. You need a CNIC, a CDC account (or sub-account…
How do I read a company's financial statements as a PSX investor?
Start with three statements in the company's quarterly or annual report. The income statement shows sales, costs and profit (and EPS). The balance sheet shows what the company…
How do State Bank interest rate decisions affect PSX shares?
When the State Bank of Pakistan cuts its policy rate, bank deposits, T-bills and money-market funds pay less, so money tends to move into shares and companies' borrowing costs…
What is the Margin Trading System (MTS) on PSX?
The Margin Trading System (MTS) and margin financing let PSX investors buy shares with partly borrowed money. They are run through the National Clearing Company of Pakistan…
What are the Pakistan Stock Exchange trading hours?
The Pakistan Stock Exchange's regular market runs Monday to Thursday from 9:32 am to 3:30 pm Pakistan time, after a pre-open session from 9:15 am. On Friday trading is split into…
What is the P/E ratio and how do I use it for PSX stocks?
The price-to-earnings (P/E) ratio is a share's price divided by its earnings per share (EPS). A P/E of 6 means investors pay Rs 6 for every rupee of annual profit. It is the most…
Should I invest in mutual funds or buy PSX shares directly?
Mutual funds pool many investors' money and a licensed asset manager invests it, so you get diversification and professional management for a fee. Buying PSX shares directly…
How do dividends work on the Pakistan Stock Exchange?
A PSX company announces a dividend with its results, quoted as a percentage of the share's face value (usually Rs 10) or in rupees per share. Shareholders on the company's…
How can overseas Pakistanis invest through a Roshan Digital Account?
A Roshan Digital Account (RDA) is a bank account that non-resident Pakistanis open online from abroad with a Pakistani bank, in foreign currency or rupees. From it you can invest…
What is the KSE-100 index?
The KSE-100 is the main benchmark index of the Pakistan Stock Exchange. It tracks 100 listed companies weighted by free-float market capitalisation: the largest company from each…
How do I start investing in the Pakistan Stock Exchange (PSX)?
To invest in the Pakistan Stock Exchange, open an account with an SECP-licensed PSX broker (a TREC holder), complete KYC with your CNIC and bank details, and the broker opens a…
What is the KMI-30 index?
The KMI-30 is the Pakistan Stock Exchange's index of 30 Shariah-compliant companies, chosen by free-float market capitalisation and liquidity after passing Shariah screening for…
Trading basics
How does inflation affect my savings in Pakistan, and how can I protect them?
Inflation reduces what your money can buy. With Pakistan's inflation at about 10.3% in September 2026, Rs 100,000 kept in cash loses roughly Rs 10,000 of purchasing power in a…
What are Naya Pakistan Certificates and how do they work?
Naya Pakistan Certificates (NPCs) are Government of Pakistan savings certificates sold mainly through Roshan Digital Accounts to non-resident investors. They come in US dollars,…
What is rupee-cost averaging or a monthly investment plan (SIP)?
Rupee-cost averaging means investing the same amount at regular intervals — for example Rs 10,000 on the 5th of every month — regardless of price. You automatically buy more…
How should a beginner in Pakistan start trading?
Start with a regulated market — PSX shares through an SECP-licensed broker, or PMEX futures — rather than offshore apps. Learn the basics (how orders, charts and risk work),…
What is futures trading and how does it work?
A futures contract is an agreement to buy or sell an asset at a fixed price on a future date. Traders put up only a margin deposit, so futures are leveraged: small price moves…
What is options trading and how do calls and puts work?
An option is a contract that gives the buyer the right, but not the obligation, to buy (call) or sell (put) an asset at a fixed strike price before or on an expiry date. The…
What is the difference between swing trading and scalping?
Swing trading means holding positions for several days to a few weeks to catch one price "swing" in a trend, using daily or 4-hour charts. Scalping means taking many very small,…
What is day trading, and can you day trade on the Pakistan Stock Exchange?
Day trading means buying and selling within the same trading day, closing every position before the market shuts so nothing is held overnight. On the Pakistan Stock Exchange you…
Technical analysis
How do I use TradingView for charting, including PSX stocks?
TradingView is a web and mobile charting platform. Search a symbol (PSX shares use the "PSX:" prefix, for example PSX:OGDC), choose a chart type and time frame, add a few…
What are smart money concepts (SMC) and do they work?
Smart Money Concepts (SMC) is a trading vocabulary popularised by the "Inner Circle Trader" (ICT) videos. It claims large institutions leave footprints on charts — order blocks,…
What are candlestick patterns and how do you read them?
A candlestick shows four prices for one period — open, high, low and close. The body spans open to close and the wicks show the extremes, so one candle reveals who controlled…
What is Fibonacci retracement and how do you use it in trading?
Fibonacci retracement is a charting tool that divides a price move into ratios — mainly 23.6%, 38.2%, 50%, 61.8% and 78.6% — to estimate where a pullback might pause before the…
What is a moving average and how do traders use it?
A moving average is the average closing price over a set number of periods, recalculated each period so it "moves" with the chart. It smooths out noise to show the direction of…
What is the RSI indicator and how do you use it?
The Relative Strength Index (RSI) is a momentum indicator, created by J. Welles Wilder in 1978, that compares the size of recent gains with recent losses on a scale from 0 to…
What are support and resistance levels, and how do you draw them?
Support is a price area where buying has repeatedly stopped a decline; resistance is an area where selling has repeatedly stopped a rise. They work because many traders remember…
Crypto
How do I keep my crypto safe?
Keep only trading amounts on exchanges and long-term holdings in a wallet you control. Write your seed phrase on paper, store it offline in a safe place and never type it into a…
What is Ethereum and how is it different from Bitcoin?
Ethereum is a public blockchain that runs programs called smart contracts, which power stablecoins, decentralised exchanges, NFTs and other apps. Its currency, ether (ETH), pays…
What is USDT and is it safe to hold?
USDT (Tether) is a stablecoin: a crypto token designed to stay worth one US dollar, issued by the company Tether and backed mainly by US Treasury bills. It is the largest…
How do I buy USDT in Pakistan safely?
Most Pakistanis buy USDT through the peer-to-peer (P2P) market of an exchange that holds a PVARA No-Objection Certificate, paying the seller by bank transfer, JazzCash or…
What is Bitcoin and how does it work?
Bitcoin is a digital currency that runs on a public network of computers instead of a bank or government. Transactions are recorded on a shared ledger called the blockchain, and…
Is crypto legal in Pakistan?
Yes — owning and trading cryptocurrency is not illegal in Pakistan. The Virtual Assets Act, 2026 made the Pakistan Virtual Assets Regulatory Authority (PVARA) the permanent…
Forex
What are forex and gold trading hours in Pakistan time?
The forex market trades 24 hours a day from Monday morning to Saturday morning Pakistan time. Activity is highest when the London session (opening about 12:00–1:00 pm PKT)…
What is the difference between MT4 and MT5?
MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are trading platforms made by MetaQuotes and offered by brokers. MT4, from 2005, was built for forex and remains popular for its…
What is a pip and how do lot sizes work in forex and gold?
A pip is the standard unit of price movement in forex — 0.0001 for most pairs and 0.01 for yen pairs. A standard lot is 100,000 units of the base currency, a mini lot 10,000 and…
How do prop firms and funded trading accounts work for Pakistani traders?
A prop firm sells you an evaluation ("challenge") for a fee. If you hit a profit target without breaking its loss limits, you get a "funded account" and keep a share of profits,…
How is the dollar rate in Pakistan decided?
Pakistan has a market-based exchange rate: banks trade dollars with each other in the interbank market, and that rate moves with the supply of dollars (exports, remittances, IMF…
What is forex trading and how does it work?
Forex (foreign exchange) trading means buying one currency and selling another at the same time, hoping the exchange rate moves in your favour. Currencies trade in pairs such as…
Halal or haram
Is an Islamic swap-free forex account halal?
An Islamic or swap-free account removes the overnight interest (swap) that brokers normally charge or pay on positions held past the daily rollover. It does not change the other…
What is sukuk and how can I invest in it in Pakistan?
Sukuk are Islamic investment certificates that give holders a share in a real asset or project — for example rent from a government building under an Ijara structure — instead of…
How is zakat calculated on shares, mutual funds and crypto?
Zakat is due at 2.5% on investment assets you have owned for a lunar year once your total zakatable wealth exceeds the nisab. Scholars commonly apply it to the market value of…
Is investing in the share market (PSX) halal or haram?
Most scholars, including Mufti Taqi Usmani, hold that buying shares is halal when the company's main business is permissible, you object to any interest it deals in, you purify…
Is crypto trading halal or haram?
Scholars disagree. In June 2026 Jamia Darul Uloom Karachi, in a fatwa signed by Mufti Taqi Usmani and five other scholars, ruled that buying and selling cryptocurrencies —…
Is forex trading halal or haram?
Exchanging one currency for another is halal when both amounts change hands on the spot (taqabud) with no interest. Typical online forex trading is different: it uses leverage,…
Risk management
Can you really earn money from trading online in Pakistan?
Some people do earn money from trading, but they are a small minority. Large studies of retail traders in Brazil, Taiwan, India and the US consistently find that most lose money…
What is diversification and how should I diversify my investments in Pakistan?
Diversification means spreading your money across different investments — asset classes, sectors, companies and currencies — so that a loss in one does not wipe you out. A…
How do I set a stop-loss and decide how much to buy?
Decide first how much of your account you are willing to lose on one trade — many traders use 1%. Place the stop-loss where your trade idea is proven wrong, not at a random…
What is trading psychology, and how do you control emotions when trading?
Trading psychology is how emotions and mental biases affect trading decisions. Most damage comes from a few predictable patterns: holding losers too long and selling winners too…
What is leverage in trading, and why is it risky?
Leverage means trading a position larger than the money in your account, using the broker's or exchange's funds. With 1:100 leverage, Rs 10,000 controls a Rs 1,000,000 position,…
Rules & regulation
Is binary options trading legal or halal in Pakistan?
Binary options platforms are not authorised in Pakistan. In April 2025 the SECP warned that offshore platforms offering options and other trading without approval are illegal,…
How can I avoid trading and investment scams in Pakistan?
Deal only with platforms licensed by the SECP, PMEX or PVARA, and verify the licence on the regulator's own website — never through a link the seller sends. Walk away from anyone…
What is PMEX and what can you trade on it?
PMEX, the Pakistan Mercantile Exchange, is Pakistan's only futures exchange regulated by the SECP. Through a registered PMEX broker you can trade futures on gold (including…
Is forex trading legal in Pakistan?
Forex trading is legal in Pakistan when it goes through regulated channels: banks and exchange companies licensed by the State Bank of Pakistan (SBP), and SECP-regulated venues…
Gold
How is the gold price per tola calculated in Pakistan?
Take the international gold price in dollars per troy ounce, add the local premium (dealers have cited about $20 per ounce), convert ounces to tolas (1 tola = 11.664 g, 1 ounce =…
How does gold trading work in Pakistan?
In Pakistan you can own gold physically (bars, coins or jewellery bought from a jeweller), trade rupee-priced gold futures on the SECP-regulated PMEX, or speculate on XAUUSD…