The question on how to start forex trading business happens to be one of the frequently asked questions which I have received from my audience.
Most of the internet folks who are passionate about making money online have identified forex trading as a lucrative business which will bring returns on investment.
Forex Trading In Nigeria has been received warmly from the newbies, beginners, dummies, prospective and professional forex traders in the country.
The forex market is a large market in which more than $4 billion dollars are being traded by different forex traders and forex brokerage companies all over the world (but very few people understand this).
The Nigerian forex market is a promising industry which can be one of the best in Africa as the future unfolds. It is important for you to know about the history of forex trading and the growth of forex trading in Nigeria; this would enable you to understand how you can start forex trading and understand the different currencies traded on different forex trading platforms.
One of the important dates in the history of forex trading was the creation of the gold standard monetary system, which took place in 1875.
In July 1944, the Bretton Woods system oversaw the formation of the United States Dollar (USD) replacing the gold standard monetary system to become a primary reserve currency; a method of fixed exchange rates; and the formation of three international agencies to oversee economic activities, which include: the International Monetary Fund (IMF), the International Bank for Reconstruction and Development, and, the General Agreement on Tariffs and Trade (GATT).
Ever since the beginning of the human race, people have been making use of a currency or a medium of exchange to get items. It should be noted that the development of the forex trading industry started in 1971 after the Bretton Woods accord which enabled national fiat currencies to float freely and the exchange control removed.
Right now, the forex market is not just practised in one country but it is a global market which operates 24 hours a day throughout the entire 7 days of the week.
The Advent of Internet Democratized Forex Trading
Right before the wide use of the internet, forex trading was already on board but only big banks and established financial institutions were able to participate and trade in the forex market to purchase different currencies for processing monetary transactions, making foreign investments and exporting & importing goods.
With the existence of numerous online trading platforms and forex brokers, the use of the internet has made it easy for anyone to trade on the forex market with ease.
What Is Forex Trading?
Forex trading refers to the process of trading (buying and selling) various currencies of different countries according to the exchange rate.
Forex trading can also be likened to an online or internet currency exchange trade which involves the buying and selling of the currencies of different countries via internet forex platforms.
The term “Forex” is a combination of two English words namely; ‘Foreign Exchange’. Basically, this implies that forex trading is all about trading foreign currencies by its exchange rate.
The foreign exchange market (forex market) is an over-the-counter (OTC) or a global decentralized market which was created and designed for the trading of different foreign currencies.
It is pertinent to know that the activity of the forex market determines the foreign exchange rate of any country’s currency. Forex deals with all aspects of buying, selling, trading and exchanging of currencies at determined or current prices.
The foreign exchange market which is known as (FX, Forex or Currency market) is the largest market in the world in terms of trading volume (I emphasized that more than $4 billion dollars of different currencies are bought and sold in the FX market, this is why the forex market is a multi-trillion dollar industry).
Note that there are inequalities in the foreign exchange rates in the forex market as some currency rates are higher that of others; therefore, making a profit or loss from forex trading is usually calculated based on the economic state of the different countries at that particular point in time.
The exchange rates of currencies also change from time to time; the exchange rate of foreign currencies isn’t fixed but are subject to change.
Just like cryptocurrencies and digital currencies, the forex market is volatile due to is constant change and unpredictable nature (forex cannot be accurately predicted).
When the currency goes up in your favour, you get to make a profit from your trade but if it happens to go down against you, you make a loss.
Evolution of Forex Trading (How Forex Trading Business Started)
Before the internet made forex available for all, it was only banks and reputable companies that participated in forex trading. As at that time, forex wasn’t available to individuals; and if any individual was able to engage in forex trading, such person would be seen as a wealthy individual.
Before now, forex trading business was done by banks only. Many banks make use of customers funds to trade forex and they get to make millions of naira, dollars and other currencies just by exchanging and trading the currencies of different countries.
Now, the internet has changed the entire system. You can spot a high-school or a secondary school student who trades forex on the MetaTrader 4 (MT4) forex trading platform with his android phone.
As far as the internet is involved, a forex trader can speculate, trade, hedge, and trade foreign currencies from the home, office or any location. Forex is growing and we have more individuals and small retail investors which make up a significant figure in the global forex market.
Even now, it is very possible to start forex trading with less than $100 start-up capital as there are many forex brokerage companies which have forex trading accounts with an initial minimum deposit of $10, which seems to be cheap and fair for prospective forex traders.
Is Forex Trading A Profitable Business In Nigeria?
Certainly, as a matter of fact, forex trading in Nigeria is a profitable business venture for individuals, investors, and entrepreneurs. The hype behind forex trading is behind the reason why forex in Nigeria is growing at an alarming rate.
So many individuals and prospective forex traders are making a research about forex trading and this is the reason why you see many adverts and publicity from forex trading companies and forex brokers looking for clients & customers who will patronize their services and make use of their forex trading platform to trade currencies.
Forex trading is one of the hottest businesses to do to make money in Nigeria if done in the right way. Forex is not a scam neither is it a new money-making opportunity; it has remained in existence over since the creation of the internet as traders get to trade and speculate on currencies such as USD, CHF, JPF, GBP, EUR.
Forex trading is profitable, besides, there is no limit to which you can achieve and earn with your forex trading account even if you are a part-time forex trader or a full-time forex trader.
Tips For Starting Forex Trading Business In Nigeria
There are certain factors which you have to consider when starting a forex trading business in Nigeria. One of them which you shouldn’t underrate is by getting good forex materials and education before you start trading and to be aware of the risks in forex trading.
Before starting out, you must be aware of certain terminologies such as leverage, pips, scalping etc. You must also be are of the scams in the market.
Although forex is a lucrative way of making money online, some online platforms were created by cybercriminals and scammers to defraud people of their money.
This is why you must be careful when picking the different forex brokers you find on the internet. With new forex brokers opening offices and making advertisements on a daily basis, you must understand that not all the forex brokers that are regulated are legit or genuine. I strongly advise you to settle with a reputable or an established forex broker before making an investment.
Even if you intend to use a new forex broker or any other broker which is not established but has irresistible offers, ensure that you make your research before you open a trading account with them.
Also, before starting out a forex trader, I strictly recommend you to start with a demo account as a beginner before investing and trading on a real forex trading account.
With a demo account, you are provided with virtual funds to trade, through this way, you get to know how to trade and manage your finances.
Starting out with a demo account loaded with virtual funds would help the newbies because it is one of the tips for forex trading for beginners.
You must be ready to invest in the forex business. However, you are not forced to invest more than what you can lose.
Most forex brokers have different trading account types; some have a minimum opening deposit of $10, $50, $100, $500 or even $1000. You are to make your research and check the type of trading accounts which suits you and is affordable for you.
Seriously minded forex traders must be ready to invest to start forex trading. If you do not have money for forex trading, you can look for forex brokerage companies that offer no-deposit bonus accounts. A good example of this is the SuperForex No Deposit Bonus account.
5 Steps To Start Forex Trading In Nigeria
Before you can start your forex trading business investment as a beginner, there are some key principles which you must take. This article guide gives you 6 steps on how to start forex trading investment in Nigeria.
1. Get Forex Trading Knowledge & Technical Know-How
I won’t stop emphasizing on the need for beginners to acquire the knowledge of how the forex market works. As a newbie in the forex market, you should be able to know when to place a trade, when to end a trade, the forex trading signals.
Also, you should know the forex currency pairs and also, you should know how to read the charts if you are serious about getting started as an FX trader and making money from forex trading.
Do not be afraid to pay some money to attend forex training and seminars; this would enable you to get knowledge from the professional traders.
If you are a greedy type, you may lose your money when trading forex. Although, nobody would tell you this secret as a beginner in forex trading business.
One of the reasons why forex traders make losses from their trades is because they are greedy and desperate to make money from forex.
Besides, you are reading this post because you overheard that forex is a profitable business venture or you read in the media that Forex can turn you into an overnight millionaire.
Before you start thinking of the millions awaiting you in forex, ensure that you take your time to learn the trade, practice more and never stop making research for forex materials or new techniques of trading forex.
Forex trading in Nigeria is more than just trading without having any knowledge of what you are doing. After observing some forex newbies and beginners, I have come to the conclusion that they like to play or trade-in every currency pair.
This isn’t bad, but I advise forex traders to specialize on 2 or 3 currency pair to know how best the currencies react to one another.
The more time you spend in specializing on a few currency pairs, the more you discover that you have learned from it and gained massive experience from it.
The six (6) major currency pairs which are commonly used for forex trading are;
- EUR/USD – Euro/U.S. Dollar
- USD/CHF – U.S. Dollar/Swiss Franc
- USD/JPY – U.S. Dollar/Japanese Yen
- USD/CAD – U.S. Dollar/Canadian Dollar
- GBP/USD – Great British Pound/U.S. Dollar
- AUD/USD – Australia / United States
These are the major currency pairs traded on the forex market. There are other currency pairs like; EUR/NZD, EUR/SEK, GBP/AUD, NZD/CAD, NZD/CHF and many more.
2. Get Forex Trading Tools And Materials
You will also need to have forex trading tools and forex materials to get started as a new forex trader. Although, this isn’t necessary or compulsory for all forex traders.
But, I deem it fit for forex traders (especially the beginners) to get forex trading materials such as videos, webinars, eBooks which will help them grow in the forex trading business.
A forex trading tool like Autochartist enables forex traders to monitor and examine thousands of financial instruments for 24 hours of every day.
As a beginner, no one would ever tell you this but I’m actually doing you the favour of bringing it up to your notice. The cool thing about this is that the Autochartist forex trading tool notifies forex traders of forex pattern formations.
This tool is not entirely free, but it is free for the first 30 days of use, after that, you would have to pay to use it. Forex traders can get this tool by downloading it on a Meta Trader 4 (MT4) forex trading platform.
Another tool for new forex traders is Powerstats. This tool helps forex traders by giving them statistics, reports, and information on forex trading instruments before they can make any trade.
This tool helps to minimize risks and it gives an assessment of the volatility on forex trading accounts. The Admiral Markets forex broker provides the Powerstats forex trading tool to its clients for free.
3. Open A Forex Trading Account With Any Forex Brokerage Company
Forex brokerage companies also referred to as forex brokers are channels for forex traders to trade in the foreign exchange market. With the aid of the forex brokers, it is possible for people to trade forex online.
Do not select or choose any forex brokers because other people are using them; forex brokers serve as middlemen between the sellers and the buyers in the foreign exchange market and this is why it is important for you to select a good forex broker when starting out as a forex trader.
Exceptional Qualities of a Good Forex Broker
The following are the qualities found in a good forex brokerage company. A good forex broker must;
- Have reliable customer support.
- Accept forex traders from your country.
- Be reliable and trusted.
- Have different methods of making payment.
- Have a license and it must be registered and regulated.
- Accept payments method which is supported in your country.
- Have an office and location.
- Be ready to support and help its clients to make a profit.
- Would not extort money from its clients.
- Should offer incentives and bonuses for its clients.
- Should be transparent and ensure the safety of clients funds.
Your prosperity and success as a forex trader are tied to your forex broker. Also, your success in forex trading contributes to the success of your forex broker.
Forex brokers view its clients as a partner and they try to offer help to ensure that their clients make profits from their trades. There are different forex brokers in Nigeria for you to pick from and start forex trading in Nigeria.
Many foreign forex brokers are making their way into Nigeria to open offices and get clients in the country. Some of the forex companies in Nigeria are FBS, JustForex, ForexTime, InstaForex, FxPro, Alpari etc
From time to time, we have reviews on different forex brokers on this blog, you can search this blog to read reviews and get forex trading tips.
3. Fund Your Forex Trading Account
Crediting your forex trading account is an important step which you must take in starting the forex trading business. Without funding your account, trading cannot take place unless you are using a demo account.
To start live forex trading, you must fund your account. Funding your account can be done through any payment methods provided by the forex broker. Popular payment methods offered by forex brokers for account funding include;
- Credit/debit cards.
- Direct Bank Deposit.
- Wire transfer.
- Western Union
- E-wallets (Skrill, Paypal, WebMoney, Neteller)
- Crypto wallets such as BitPay and MyBitWallet.
As a beginner, you should not start forex trading with a huge sum of money unless you have gained experience or unless you have enough cash to spend. I’ll advise you to start small even if you have enough money to invest in it.
You can start forex trading with $50 or $100 (depending on your finances), after that, you can fund your account with much money and make your way to the top.
4. Setup A Domiciliary Account
Another step you must take to start forex trading in Nigeria is to open a domiciliary bank account.
A domiciliary account is not like your local or domestic bank account in which the currency denomination is the Nigerian Naira, in the case of a domiciliary account, the currency denomination is a foreign currency such as Euro, Yen, Pounds but the US Dollar is preferable.
The domiciliary account can be used to withdraw your forex profit earnings or to fund/deposit your forex trading account. You can open a domiciliary bank account in any bank in Nigeria and meet their requirements.
However, if you wouldn’t like to operate with a domiciliary account due to the poor exchange rate of the Naira to the Dollar, you can use a Naira bank account to funds your trading account.
The HotForex forex broker allows you to make deposits in the Nigerian naira denomination and withdraw your profits in Naira.
5. Forex Trading Device & Internet
You should have a stable and fast internet connection because this is necessary to trade in the forex market.
A slow internet network or a poor laptop would not be convenient for you to close your trades and this can be disastrous if it takes time to do that (especially when you are losing.
Also, it is recommended that you get a high-performing laptop when starting forex trading in Nigeria. You can use your laptop or computer system for forex trading on the MetaTrader 4 (MT4) forex trading platform.
If you do not have a laptop as a forex trading learner or beginner, you can download or get the MetaTrader 4 (MT4) forex trading platform on the Google Play store.
The forex market is open for 24hours/day and it moves constantly like a clock; this is why you may not enjoy your trades or even lose your trades if you use a crappy laptop or computer system.
Most people lose their forex trades not just because they are unlucky but because of inefficient trading devices and tools for forex trading. If you have followed all these steps, you are good to start forex trading in Nigeria.
Best Time To Start Forex Trading In Nigeria
I have seen people ask me of the “what is the best time to trade forex in Nigeria?” Although forex trading in Nigeria may be interesting, there is no best time to trade forex in Nigeria.
The reason for making this statement is that forex is a highly liquid market. Just like cryptocurrencies like the Bitcoins, Ethereum, Litecoin etc the forex market is also volatile and the prices of most forex currency pairs fluctuate at almost every point in time.
At times, the prices of some highly volatile forex pairs change so fast that when you open trade on your forex trading platform and close it after some minutes, you would get a significant amount of profit which was gained by using substantial leverage.
All you need to start forex trading in Nigeria is a forex brokerage account with any forex broker and a fast/stable internet connection. A real forex trading account is connected to the live forex market with the use of the internet.
For instance, a forex trader can start forex trading in Nigeria and open a live forex trading account with a deposit of $200 and that Nigerian forex trader can trade with a 100:1 leverage and make a profit of up to $200,000 due to leveraged trading.
Another method of trading in the forex market is to speculate currency prices; in this way, you get to buy a particular currency and sell another currency.
For instance, if you have bought the EUR/USD and if the rate of the EURO (EUR) goes up against the U.S dollar, you would gain and make some profit from the price difference.
Aside from speculating on currencies, you can also trade in the foreign exchange market to hedge your investments in stock markets.
Also, you can use a method known as the “carry trade” by playing the interest rate difference between 2 currencies and earn your profit from the currency swap differences.
In conclusion, most small retail forex traders can start forex trading in Nigeria with technical analysis. If you are enthusiastic and serious about the forex trading business, you should have invested your time to understand how the global economy works in the forex industry works.
For example, you must understand the basic fundamental indicators of an economy such as the interest rates, production level, employment rates and the role of the Central bank in regulating economic problems such as inflation, deflation etc.
Once you have known these and gotten familiarized with these key points, you would gain an upper hand over other beginners in the forex trading business.
The more time you spend on forex, the more experience you get as a forex trader. When you might have accumulated enough experience for forex trading, you would find out that there is more than a single way to make a profit from the foreign exchange market.
Your success and profit as a forex trader depend on your trading skills and experience. As a serious forex trader, make sure that you invest something substantial before you can make a reasonable profit.
Also, I advise that you should not invest more than what you can lose. I know successful forex traders who started just like you (who is reading his post), they took a move and today, they are making thousands of dollars from forex trading.
I wish you all the best of luck as you start forex trading in Nigeria. Endeavour to visit this site to read more forex trading tips, forex broker reviews and other investment opportunities and methods by which you can use to make money in Nigeria.