How to Start Forex Trading in Nigeria for – Beginners Guide
Around the early 2000s, Forex trading in Nigeria started to gain relevance, now it’s now one of the most popular ways to build wealth in Nigeria, which is one of the fastest-growing forex trading nations in the world. With the country doing an estimated daily trading volume of ₦300-450 million.
The Forex Market is the largest trading market in the world (larger than all the stock markets in the world combined together) and has an average turnover of US$6.5 trillion on a daily basis around the world.
Forex trading or Foreign exchange trading can offer a path to financial freedom for anyone willing to learn the skills and behaviours required to be a successful forex trader.
For those who are new or have a limited idea of what forex trading is, it is simply a way for investors to exchange several national currencies against one another and make money off the margins.
If you’re looking to trade forex in Nigeria, we will be talking about everything you need to know. So sit tight and come along.
Is forex trading legal in Nigeria?
Forex trading in Nigeria is unregulated so it isn’t illegal or banned in Nigeria. So it is very legal to trade Forex in Nigeria as long as your trading does not break Nigerian money-laundering laws. That’s why you need to use legit forex brokers in Nigeria and make sure you’re trading for yourself alone.
Is Forex Trading Profitable in Nigeria? how to make money from forex trading in nigeria
Yes, forex trading in Nigeria has been profitable for a lot of people. However, these are forex traders that are very skilled, knowledgeable about markets. While forex trading can be very lucrative, it is not a get-rich-quick scheme. Many people have made a lot of money from forex trading in Nigeria, a lot more have also lost money.
But if you take time to correctly learn the fundamentals of forex trading, you can become rich from trading because forex trading can be a profitable venture for anyone with the right level of skills and capital.
A lot of the people who lose money from forex trading in Nigeria do so because they either don’t learn the fundamentals well enough or they carry the wrong mindset with them. Some of them think they can make easy money trading forex with minimal investments. It doesn’t work that way. Not for investing anyway.
To profitably trade forex; you’ll need to invest time and focus on learning the required skills. Learn the basics. There are a ton of resources out there like Youtube, ebooks and even courses. Then you need to gain some experience by trading using a demo account (account with fake money) and develop your trading strategies. After you’re sure that these strategies work, you can go ahead and open a live account and start trading with your money. You also need a significant amount of capital to open positions where you don’t over leverage.
How much do you need to start trading forex in Nigeria? What is the Minimum amount to start?
To begin your forex trading journey will require at least $100. It is important to know that while some forex brokers might tell you you can start trading forex in Nigeria with a lesser amount. You want to have enough capital to trade that gives you just about enough leverage to reach your goals.
How to start Forex Trading in Nigeria & Everything you Need to Know
For beginners who want to go into forex trading, it is important that you have enough knowledge about forex and what it means to trade forex. So we will explain the important terms in forex trading so you can start building up your knowledge. It is important that you expose yourself to more Forex educational material so you can cut out beginner mistakes.
Some important forex trading vocabulary is:
Forex: Foreign Exchange
Forex trading: trading (Buying & Selling) currencies for profit-making.
Forex Market: This is an over-the-counter (OTC) market where forex traders place their trades on currencies, 24 hours a day, for 5 days a week from Monday through Friday. A lot of stakeholders like investors, institutions, banks, and retail traders are involved in the Forex Market. Trading activities are conducted through the “Interbank Market” which allows you to execute trades.
Currency Pairs: This is a quotation of the exchange rate for two different currencies traded in the Forex market. When you place an order for a currency pair, the first listed currency or base currency is bought while the second listed currency in a currency pair or quote currency is sold.
Base currency: This currency always appears first in a currency pair, it is the currency that the trader is currently holding.
Quote currency: This is the second currency in a pair, it is the currency that the trader will purchase.
Bid/Ask Price: The Bid price is the price at which the broker is willing to buy the base currency while the asking (ask) price is the price that the broker will ask the trader in exchange for buying the quote currency of choice.
Spread: This is the difference between the bid price and the ask price, it’s usually charged by the broker as payment for rendering services. This difference is expressed in pips. Spreads can either be floating or variable spreads and they change with market conditions. Fixed spreads are determined by the broker.
Pip: this means ‘Percentage in Point’. It is the smallest measurable value of currency movements and the smallest increment that a price can move. One pip is equal to 1/100th of the base currency of the trader.
Demo Account: A demo account is a risk-free platform that mimics live trading conditions, without risking actual capital. It is used by traders to practice forex trading before putting in real capital in a live trading environment