If you have ever exchanged money, you can consider yourself a forex market participant. But it is hardly the reason that brought you here, isn’t it? As the economic crisis develops, more and more people feel uncertain about having a single source of income. This is when forex might sound like an exciting venture. If you are thinking about trying yourself in currency trading, this article is for you. Here, we talk about the pros and cons of forex and provide recommendations on the initial steps one should take to begin trading in Nigeria.
- Forex trading is the exchange of currencies aimed at profiting from currency rate differences.
- Forex trading is legal in Nigeria and gains more popularity over time due to its high-profit potential.
- To begin trading forex, one needs to sign up with a broker, open a trading account, and make a deposit.
- It is advised to try trading on a demo account before investing real money.
- Profitable trading stands on three pillars: understanding of trends, reliable strategy, and discipline.
Is Forex Trading Legal in Nigeria?
No law in Nigeria prohibits currency trading. Anyone willing to earn in the forex market can do so. But be aware that this market isn’t regulated, and the responsibility for the security of your funds lies upon you. This is why we advise you choose the broker wisely. There are numerous Forex brokers in Nigeria, but unfortunately, many of them are fraudulent firms. To avoid the danger of falling prey to malicious organizations, spend some time checking your potential broker. Do the following:
Read reviews on independent platforms.There are a few sites that can help you choose a broker, including Trustpilot and others. Obviously, there is no service in the world with solely positive reviews, but reading opinions from both sides will form a general idea of who you’re dealing with.
Study the broker’s trading conditions.One of the ways to distinguish a real broker from a scammer is to learn the trading conditions. Reputable brokerage firms will never promise you will become a millionaire overnight. So be skeptical about platforms that offer conditions that are just "too good to be true."
Check licenses.Not all brokers without a license are scams, and conversely, not all licensed brokers provide impeccable service to their clients. But in general, licensed institutions are considered more secure.
When Can I Trade Forex in Nigeria?
One of the benefits of forex compared to other markets is its round-the-clock availability. Forex market is open five days a week, Monday through Friday. To be more specific, it opens on Sunday at 10:00 pm and closes on Friday at 10:00 pm (GMT+1). If you trade USD, mind that the most active hours for trading American currency start around 1:00 pm (GMT+1). This is when the US dollar price is especially volatile.
How Much Money do I Need to Start Trading in Nigeria?
The entry deposit requirements vary from broker to broker. For example, you can start trading with Justforex with only a $1 deposit. Although this size of an investment doesn’t promise impressive returns, it is a good starting point for those who have no experience in trading. Risking little money on your initial trades will limit possible losses while helping you understand how the market works.
The more experience you gain, the more confident you will feel in your trading decisions. As you practice, you can gradually increase your investment and reap the benefit of your trades. Just remember that there are no traders that don’t experience losses from time to time. The secret of success lies in covering those losses with much more significant gains.
Related topics: Can You Make a Living Trading Forex?
How are Currencies Traded?
Currencies are traded in pairs, for example, EUR/USD. The first currency pair is a base currency, which you can either buy or sell. The second currency reflects the price of one unit of the base currency. If EUR/USD = 1.19011, it means that to buy (or sell) one euro (base currency), you will pay 1.19011 American dollars (quoted currency).
The price of a currency is constantly fluctuating. As you look at the chart in a trading terminal, the price of a currency pair goes up and down, and the numbers are changing every second. The minimum change in a price that can occur is 1 pip (the last symbol of a quote) – 1.19012.
As a trader, you want to buy the currency pair at its lowest price and sell it when the price gets to the highest level. The price difference between these two points when you enter and exit a trade will make your income. To determine the best time to open and close a trade, professionals refer to price charts (technical analysis) and economic news (fundamental data).
For example, you read the news that says the European Union will impose strict quarantine measures, and many businesses will be temporarily closed. This means that the EU economy will endure losses, and subsequently, its currency will drop in price. On the other hand, the US shows a consistent recovery from the crisis, and its economic data is optimistic. This makes you believe that there is a profit potential in going long (buying) EUR/USD. You refer to technical indicators to confirm your assumptions and open a trade.
You define conditions when you need to exit the trade. For example, it may be when the price reaches a certain level. If your prediction is correct, you get a profit when the trade is closed. If the price goes against your plan, you will lose some money. When opening a trade, you can set a stop-loss to minimize possible losses.
We recommend you read about price action and learn a simple and effective trading strategy for beginners.
How To Open a Trading Account In Nigeria?
In only a couple of steps, you can easily open a trading account on Justforex. To do so, follow the link and fill in the registration form. Once you open/download the actual trading platform, you can sign in using the password from your email. Well done! Now you can make a deposit and place your first trade.
If you are completely new to trading, you can as well open a demo account. Teaching accounts allow newbies to learn trading eliminating the possibility of any loss. Being an easy learning route of forex trading for beginners, they offer a free trading experience with virtual funds, real-time market conditions, and all the same instruments available on a regular account. As you complete a few successful trades and backtest your strategy, open a regular account and start making real money.
Before you place your first trade, make sure to understand the basic terms associated with forex. If you are not familiar with currency pairs, read our brief overview on how to read currency quotes. It also advised gaining some knowledge of trading strategies. To enhance your understanding of price trends, you can follow up on our daily analytical forecasts by subscribing to daily forecast and market overview newsletters.
If you are ready to jump at the new opportunities and start building your future today, open a trading account on Justforex.
Opening New Financial Doors
Justforex offers advantageous trading conditions, including low spreads, 0% withdrawal fee, and a team of support working round the clock to ensure you have the most comfortable trading experience. We care about each of our customers. This is why we offer an option to open an Islamic Swap-free account for our Muslim clients. Millions of traders have already benefited from trading with us. Will you be next?