Nigeria has one of the fastest-growing economies in Africa and over the last decade or so, it has managed to achieve some tremendous growth in its economy. This has led to a situation where the attention of the world and the businesses are turning towards the country with major companies also looking to launch and grow their business in the country.
When the prosperity of a country increases, so do the opportunities. People start looking for means and ways to make use of their savings and start investing them in avenues that are likely to give them better returns than what the banks offer. In such a situation, they invariably turn to trade and many of them turn to forex trading as well. Forex trading in Nigeria has been growing over the last few years and it appears as though it is only a matter of time before a lot of brokers enter the country and we will be seeing explosive growth in the coming years.
Forex Trading in Nigeria – The Basics
There is no need to worry about how to start forex trading in Nigeria. The basics of trading in Nigeria is the same as it is anywhere in the world. In a way, that is the specialty of trading which is that you can trade from whichever region you want to, on whatever instrument that you are comfortable with and if you are bored or have had enough, then you can always walk away. That’s the beauty and the freedom that trading provides you which you will simply not be able to find anywhere in any business.
As with any kind of trading, make sure that you study a lot and acquire a lot of trading skills through learning when you start. Spend a lot of time learning and watching the markets and do not be in a hurry. Patience is a key skill not only when you start out but also through the trading career of any trader and it is better to learn the skill as early and as soon as possible. Once the learning is done, switch to demo account trading and find a trading strategy that suits your style. Trade it and see if it’s profitable consistently on your demo account. If it isn’t, go back to your drawing board and find out where you went wrong and continue with your study and see how can correct your mistakes and become a better trader. Keep repeating this process till you become confident and consistent with your profits. That is the time for you to switch to a real account. This is what not only Nigerian forex traders but traders anywhere in the world should be doing.
What are the Best Forex Brokers in Nigeria?
Once you have figured out how to start forex trading in Nigeria, the next job would be to find the right broker to trade with. While it is always advisable to trade with a broker whose office is nearby or at least within the country so that you can have local support at times when you need it, that advice may not work very well in Nigeria. The country is still in the growth mode and hence not many brokers have physical offices in the country and they do not know much about forex trading in Nigeria.
The only broker so far to have an office in Nigeria is FXTM and they are a pretty decent broker where you can open your account. You need to remember that you have to start with a small account to ensure that you trade well even with a real account. Trading with a real account is entirely different from trading with a demo account and so you must get the feel of trading with a real account before you increase the funds in your account. Many accounts lose money when trading even though the trader might have done well in the demo account. Likewise, trading CFDs is always quite risky and is known to blow up accounts and so you need to be very careful about it.
There are also other forex trading brokers in Nigeria like Avatrade, Pepperstone, etc who also welcome traders from Nigeria and try and provide them with good offers but they don’t have a presence in Nigeria and their funding and withdrawal methods are not very straightforward making it difficult for traders to get their money in and out of such brokers. On the other hand, it is learned that FXTM offers some very good funding and withdrawal methods where the Nigerian traders can directly do so from their banks which makes it convenient for them. This list of brokers should be the best forex trading platforms in Nigeria where you can trade confidently.
Can You Legally Trade Forex in Nigeria?
As in most other countries, it is ok to trade as long as you do it on a personal basis. Once you have crossed the stage of ‘is forex trading profitable in Nigeria’ and begin to make profits, then it would be treated as an income for you and then you will be charged tax for that but as long as you keep proper accounts and pay your taxes on time, you should be fine with trading in the country.
But trading isn’t the only way to make money, you can also do forex trading in Nigeria as long as you are good and confident. This not only earns you a good income, but it also gives you some solid satisfaction that you are helping others to trade as well and this should boost your self-esteem and also make you feel proud. There are many other ways to make some good money through forex trading and training all of which are legal but they will also be taxed.
Best Time to Trade Forex in Nigeria
This is also one of the very big advantages of trading in Nigeria which top forex traders in Nigeria would vouch for. The fact is that Nigeria local time is one hour ahead of London which means that when the foreign exchange pairs are in high volatility in London when the markets open, that will also be the right time for the successful forex traders in Nigeria to be awake and ready after having had a nice breakfast. Not many regions in the world have this advantage as people in some regions have to wake up at crazy times just so that they are around at times of volatility but the traders in this region have no such problems.
On the other hand, It is only evening time for the traders here when the US market opens and this is again a huge advantage for them as they can finish all their work and be back home and ready when the US markets and the associated volatility begins. They get the best of both worlds as they get to trade both the London session as well as the US session during their working hours and they don’t need to be tired or burn their midnight oil to trade during such times, as people in many other regions of the world would have to.
The Role of Forex Brokers and Leverage
The forex brokers and the leverage offered by them have always been contentious topics among successful Nigerian forex traders. The reason is that leverage can be a double-edged sword which the successful Nigerian forex traders would tell you. While on the one hand, leverage can help you to quickly multiple your funds, it can also blow up your account even more quickly. Many traders, especially those who are just starting with their trading, do not realize the risks involved and hence choose to go for brokers who offer them very high leverage in the hope of making some quick money.
While this may work for a short period of time, sooner or later the leverage is likely to start biting back and the trader would lose his account. So, there is indeed an ongoing discussion on whether high leverage is good or bad with one group saying that the decision should be left to the traders themselves and if they are fine with the risk of losing their accounts, they should be allowed to take that risk as they are individuals and mature as well and they should know what is good or bad for them in the long run. Keeping this in mind, some brokers offer some high leverage while other brokers do not want to share that risk with the traders and hence they do not allow high leverage on their accounts.
What Payment Options are Available to Nigerian Forex Traders?
The available payment options vary from broker to broker. While there are some good brokers like FXTM with not only physical offices in Nigeria but also have some native methods of payment for the traders in the country. The traders can wire their funds directly from their bank accounts to the broker and they can begin trading and this is one of the most famous deposit methods as far as Nigerian traders are concerned. Likewise, the withdrawal can also be done in the same manner, and the reason why the traders love this is simple. The method is fast and also gives a lot of trust to the traders as all that they need to do is have a bank account and the rest of the operations are pretty much simple.
Other brokers offer other payment methods like credit cards as well but again, Noegria is a developing market both in terms of forex trading as well as payment systems and it might still take a few years for the traders to get a wide variety of payments methods for themselves. Till that time, the traders have to be content with the limited options that are available at this point and manage their trading within that. The Nigerian forex market still has not matured as yet and this presents a risk as well as an opportunity for those that are open to making full use of their time. If you don’t feel confident, then you can undertake forex trading training in Nigeria.
There are many opportunities in the world and so the same holds good for forex trading as well. What is key is that the trader should not lose money in the market and you should consider whether you understand the risks and the returns that are involved. Always ensure that you risk only that money that you can afford to lose, nothing more and nothing less should be risked while trading. This is a key lesson that any trader should keep in mind and especially if you are in a developing country like Nigeria where money is hard to come by and there are lots of people who still struggle to make a decent living.
Such situations can sometimes lead to desperation and hence this should be avoided at all costs and each challenge that is presented to the traders should be treated as an opportunity to learn and grow and get even more skilled and ready to face the further challenges that lie ahead. If you have this mind, then anyone can be successful in forex trading not only in Nigeria but anywhere in the world as well.