There’s no argument that the Forex market is the biggest financial market in the world. Currently, you can even learn how to make money on forex without trading if you don’t have any capital or you’re not willing to risk your finances.
In Nigeria, Forex trading has gradually become huge as more people move into this market space. This market has spurred economic growth for the Nigerian economy and you may be tempted to ask “Is Forex Trading in Nigeria that easy”?
Well, this article will answer the question by giving a complete breakdown of Forex Trading in Nigeria. Essentially, you will learn about the market, trading platforms, advantages, and disadvantages, etc.
What is Forex Trading?
Forex trading is basically the process of changing one currency into another for the purpose of trading. These exchange usually happens in pairs as they can be used to execute international transactions easily.
With the high volume of exchanges going on every day and exchange rates dwindling, it opened up space wherein people can make money by exchanging high-value currencies for low-value currencies.
But a lot of people in the forex market don’t make by trading alone, they use trading derivatives which allows them to make speculations on the movement of price. And for every correct prediction, they gain and vice versa.
Is Forex Trading Legal in Nigeria?
A lot of people in Nigeria have not researched about the forex market so they can make a lot of assumptions. Conversations about this market are esoteric, hence, a lot of people are not convinced about the prospects of the market.
Forex Trading is legal in Nigeria. The Nigerian Government acknowledges the stock exchange market, so this makes trading on the market acceptable and legal.
How Much do I Need to Start Trading Forex in Nigeria?
A lot of Forex Brokers don’t require you deposit any money at all to start trading. Instead, some of them give you an incentive of $20 to practice your trading on their platform – the $20 is usually for practice and cannot be used to trade.
Due to high currency exchange levels affecting Nigeria, you need about $100 to start serious forex trading. Brokers usually advise you to invest about $200 in order to get a stronger headstart.
What is the Best Time to Trade Forex in Nigeria?
Every market has its peak periods. The Forex market is no exception in this regard as trading when there is a high volume and liquidity remains the best time to trade.
In Nigerian time, this usually falls between 2 pm and 10 pm which is the overlap between London and New York. At this time, more people are awake and the market is bubbling with activity. And as a Nigerian, you can trade within these hours after returning from your daily job.
How Do I Make Money with Forex in Nigeria?
Making money on the Forex market is actually the reason a lot of people venture into the Forex market. However, when you enter the right vehicle, you can increase your income steadily.
The most popular money making strategy on the Forex market in Nigeria would be the binary options which allows you trade in all or nothing pattern. When you use a binary option, you usually get the yes and no scenario and you need the currency pair to stay above a certain level in a day to win.
Shorting is also another good strategy that involves you shorting overpriced currencies. When you successfully, short term you profit and vice versa.
How To Start Forex Trading in Nigeria
Getting started in the Forex market as a Nigerian doesn’t require a strong will. Well, let me warn you that a strong will doesn’t guarantee you will make lots of money. Your losses will accrue when you don’t follow a standard process.
It’s unwise to gamble with your money on this market – you can lose thousands of dollars in seconds. As a beginner, you should never trade on the market without using a stop loss; it can be detrimental as a lot can happen in an hour.
Although you can make use of a stop loss to help cut your losses, the best help you can get would be to adopt a winning formula. And while you can derive this formula from an already established trader, you can also learn from your personal experience.
Generally, to start trading Forex in Nigeria you need:
Strong Internet Connection – An internet connection guarantees that you will get to exchange foreign currencies while keeping a sharp eye on the market trend.
In Nigeria, the internet can be unreliable and frustratingly slow. There are actually ways to access the internet without a cable and that is helpful.
Device – A lot of professionals would advise you use devices instead of a device. A device can focus on only one signal but different devices help you pay attention to each simultaneously.
Trading Capital – You can’t bump into the forex market with no cash. It’s just walking into a grocery and picking materials that you can’t purchase. A good trading capital always determine how smoothly your transactions will go.
Account with Trusted Broker – A trusted broker has to help you set up an account with which you can trade easily and legally. So, you need to pay a broker to help you.
What are the Nigerian Forex Trading Strategies?
When you trade on the Nigerian Forex market, you need to know a few trading strategies to help you. They include:
Positional Trading
This is a form of long-term trend trading. In this strategy, traders are seeking wide shifts in the price of a currency pair. Strong knowledge of market fundamentals and the structure of the individual currency you’re trading will help you with this style.
Swing Trading
Swing positions are highly profitable short term moves. Their traders possess constructive knowledge of fundamental macroeconomics behind a currency pair. With this knowledge, they can make loads of money.
Day Trading
This is popular among a lot of forex traders. Day traders can’t deal with the overnight moves that occur from time to time. In the forex market, it doesn’t affect so much due to trading hours.
Who are the Best Online Forex Brokers in Nigeria?
The quality and offering of the broker you choose will determine the difference in your trading strategy. In Nigeria, there are a good number of Forex broker agencies and their offerings. They include:
| Broker | Account Minimum | Pairs Offered |
| FXTM | $750 | N/A |
| FOREX.com | €100 of Select Base Currency | 80+ |
| AVATRADE | €100 | 50+ |
| ETORO | $50 | 47 |
Forex Trading in Nigeria | Pros & Cons
Forex Trading in Nigeria has its pros and cons. Let’s quickly identify them.
| Pros | Cons |
| Low transaction costs | Brokerage |
| 24-Hour Market | High Risk Factor |
| High Liquidity | Social Trading |
| Great Profit Potential | Presence of Scammers |
Conclusion
When you look at the Forex market, you either see an opportunity to make a lot of money or an ocean that will drown your resources. While you choose a side, it’s imperative you know a lot of people have made money and still make money on this market.
When you want to trade forex in Nigeria, you need to find a trusted broker. So, I advise you devote a lot of your time to find the broker that will spin your wheel into fortune on this market.
With a great broker, a winning strategy, and the right capital, you can comfortably profit from the forex market.
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