The Nigerian economy is one of the best in the African continent; there are lots of business opportunities online and offline for anyone to invest. One of the profitable businesses to invest in is the forex trading business.
Before now, forex trading was exclusively reserved by the banks together with other financial organizations.
Financial institutions including commercial banks use the money of their clients to invest in the foreign exchange and they make lots of profits from their trades. However, that time has changed, you can invest in forex in Nigeria with a little capital of $100.
In this article, we will provide you with information on how to invest in FX trading in Nigeria. Before we provide you with information on how to start a successful forex trading business, permit us to give you a piece of brief information about Forex.
What is Forex?
FX or Forex stands for ‘Foreign exchange’; it is a business that involves the buying and selling of currencies. Currencies are pitched against one another and traded on the foreign exchange market. In the FX market, the exchange rates of currencies are not equal, you can either make a loss or a profit after placing a trade.
Most times, the currency exchange rate is influenced and can change in response to the global economic meltdown, news etc.
For instance, issues such as US-Iran Conflict, CoronaVirus, US Immigration Travel Ban, Commonwealth of Nations etc can affect the exchange rates of currencies in the FX market.
As an investor, you need to understand how the forex market works. If you don’t understand this, you may lose your trading capital before you realize it.
Just like the cryptocurrency market, the foreign exchange market is extremely volatile. The prices of currencies are not fixed or static, rather, they change from time to time.
Trading Forex In Nigeria
Here are some important factors to consider before trading forex in Nigeria. We recommend you to check them out if you are passionate about trading forex in Nigeria.
Get Forex Education
As a beginner, it’s recommended that you get some education on how to trade forex. The role of education in forex trading cannot be underestimated either can it be overemphasized. Educating and enlightening yourself should be the first step to take before making an initial investment.
There are lots of forex trading institutes where you can learn how to trade currencies. Alternatively, if you cannot afford the charges of these forex trading institutes, you can get online courses and learn forex trading from YouTube, Udemy etc.
Get A Demo Account
After acquiring forex education, get a demo account to practice what you’ve learned. Virtually all forex brokerage companies offer demo accounts to beginners to learn how to trade foreign currencies. Usually, these accounts are loaded with virtual funds for you to trade.
The demo account is strictly created for practice and training purposes. If you should make profits from your trades, you will not be able to withdraw it.
Open An Account With A Forex Broker
The third and most important step is to open an account with a forex broker. There are lots of forex brokers on the internet, however, not all of them are genuine. For this reason, you must identify a reputable forex broker to trade with.
Before opening an account with any broker, ensure that the broker is regulated by the regulatory agencies such as CySEC. A reliable and transparent company is known for its customer support and regulation.
Another way to pick a good forex broker is to try out their demo account before opening a real trading account. The forex broker provides you (the forex trader) with the platform to trade forex online. Examples of reputable forex brokers are;
After opening a live trading account, you will have to fund your account to trade forex. Your forex broker should offer various payment methods such as payment via Bitcoin/digital currencies, credit/debit cards, Neteller, Skrill, Webmoney, PayPal etc for account deposit.
Moreover, since your earnings will be in the foreign denomination (USD or EUR), you can need to have a domiciliary account to withdraw your profits.
However, it is not compulsory to have a domiciliary account. Some brokers like HotForex allow you to open the Naira trading account, that is, you can fund your trading account and withdraw your profits in the Nigerian Naira currency denomination.
Although forex trading and cryptocurrency trading is yet t be regulated in Nigeria, it doesn’t mean that it is illegal to trade forex in Nigeria. Ensure that you choose a reputable and reliable broker who will pay your profits to you without stories.
Forex trading is more than placing bids for the rise or fall of a currency. The psychology aspect of trading should be taken into cognizance.
As an investor, you should know when to trade and when not to trade. Also, do not be too greedy to make money, forex is not a get-rich-quick-scheme.
Ignore brokers who woo you with promises of mouthwatering profits, learning forex will make you a successful trader in the long run.