If you are a Nigerian investor, foreign exchange investment otherwise known as Forex can be a way to amass great wealth. It has to do with predicting the rise and fall of currencies. Of recent, forex investment has become popular in Nigeria, with a record high of about #450 million trade volume. However, it is imperative to note that investing in forex requires you to have detailed information about the highs and lows. Therefore, if you are a beginner forex trader, this article will come in handy to provide answers to some likely questions you might ask.
What is forex trading?
Foreign exchange, also known a forex or FX trading, is a means through which traders and investors from around the world buy and sell currencies. This is done in an ‘interbank market’ which we call also call a forex market. Currencies are traded in this market 24/7.
Is Forex Trading Legal in Nigeria
Forex trading is a legitimate business in Nigeria. It has been around for a very long time. In fact, it is registered under the Foreign Exchange Act of 1995. However, to fulfill the law, you must ensure that you trade with a licensed broker, and you must trade by yourself. If you are not sure about the legitimacy of your broker, ensure to do some research. This will help you ensure you aren’t in the hand of swindlers and also help answer questions on what you are to do and not.
Is Forex Just Gambling?
The majority of people are of the opinion that forex is no different from gambling. This is because they think that since you are taking sides with the price of a currency pair to go up or down, you are essentially gambling. Well, rookies or inexperienced traders can be forgiven for this mindset. Therefore, to answer the original question, we’d say forex isn’t gambling. This is because a lot of financial organizations invest loads of funds into the forex market and they make profits. So, we can be sure that they are not betting their large sums of money at random.
How do I become a forex trader in Nigeria?
Forex trading can be done from anywhere and by anyone in Nigeria. All you have to do is ensure that you have a good laptop, internet connection, and an excellent trading strategy. In addition, here a few things you need to get started as a beginner.
Sign up with a Forex Broker:
This is a necessity. Before you can trade, you need to register an account with any forex broker of your choice. The forex broker is your link to the market. However, it is important to double-check the broker’s legitimacy before choosing to trade with them.
Start trading with demo accounts:
After signing up with a broker of your choice, the next thing is to start trading. But it is advisable not to start trading directly on a live account. This is because as a beginner, your real money would be at risk. We, therefore, advise using a demo account. This will help you learn how trading works and also a means to develop an excellent strategy.
Fund your Account:
After you must have learned the rudiments of trading, the next thing to do is to fund your account. This you can do by using a 3rd party bank, a debit card, or a credit card.
Download your trading platform (If applicable):
Some brokers have their own trading platforms, while others do not. Either way, ensure to download a trading software that will serve as an interface to invest.
What is the best time to trade Forex in Nigeria?
Knowing what time to trade is one of the important criteria to success in the forex market. This helps you target the time when liquidity is on the high for some currency pairs such as USD, GPB and EUR. Therefore, the advisable time to trade as a Nigerian investor is during the opening hours of the London session to early New York session hours. This is usually 8:00am and 5:00pm respectively in Nigeria.
Forex trading is a very profitable investment if done the right way. As a beginner, it is important to arm yourself with detailed information about how the forex market works before investing. We however do hope that this article will serve you as a guide in your forex investment journey.