Forex trading in Nigeria isn’t complicated at all.
This article is a crash course on what you need to know about forex trading.
I’ll show you how you can make money from forex trading and then share with you a clear path to forex trading for beginners in Nigeria.
Forex trade investment is probably the easiest way for any Nigerian to dip their feet in investment. The cost of entry is low; all you need is a laptop, internet, and as low as 5$ to invest in forex.
As the fastest growing economy in Africa, Nigeria has the most retail forex traders in Africa.
So, you are not alone, and if you can learn how to trade right, forex trading can meet your wildest dreams.
So let’s get started.
Forex Trading in Nigeria – A beginners guide.
What Is Forex Trading All About?
For complete beginners (people who know almost nothing about forex trading), take a few minutes to peruse through the answers to your curious questions about forex trading.
What is forex trading?
Forex trading is the buying and selling of currencies of two countries to make a profit.
Forex trading is basically an exchange of one country’s currency for another.
And that is where we get the word FOREX – FOR-reign EX-change
How forex trading works in Nigeria?
Let’s say you are traveling to the US or want to buy shoes online and need US dollars. You would walk to a Bureaux de change (BDC) in a street corner or a bank to exchange your Naira for US dollars.
What you’ve done is forex trading.
The kind of forex trading I am introducing to you is no different from what you did at the BDC, only that you are doing it online, and now you have access to more than 100 currencies to exchange.
The motivation this time is not to buy that shoe but to make money from the difference between the buying rate and selling rate. We’ll revisit this when we look at how to make money from forex trading.
How to begin forex trading in Nigeria.
There are two ways to start forex trading in Nigeria;
1.As an investor
The easiest way to begin forex trading in Nigeria is by becoming an investor.
As an investor, you don’t need to learn how to trade. Instead, you deposit your money with a forex broker with a copy trading platform that allows verified traders to trade with your money, earning you passive income.
What you need for forex trade investment in Nigeria.
- You need a reputable and regulated forex broker that has social or copy trading.
To save yourself from the MBA forex scam scenarios, you must be careful with whom you partner with for forex trade investment.
- Download a forex investment platform from the broker to your phone.
- Copy successful traders
To learn how to pick the best traders to copy or invest with, check out my in-depth guide on copy trading.
- Profit – make money.
2.As a trader
To start trading forex in Nigeria as a trader, you need to;
- Get a Computer or a laptop or a smartphone
Unlike walking to the BDC, this Forex trading is an online business.
For that, you need a device that can access the internet.
A good desktop computer or laptop or even a good android or iOS smartphone will work. Though I advise a bit of caution trading with the phone
Your computer should be fast; I recommend a Mac or a PC with at least a Core i3 processor and more than 4GB RAM.
- Purchase an Internet connection
You need a good internet connection to access place trades.
Today’s internet has improved that even the standard 3G and 4G connections on your phones are fast enough to execute trades instantly.
- Signup to a Forex broker
Forex brokers connect you to liquidity providers – the big banks that facilitate financial transactions in the global foreign exchange market.
If you have more than $1Million, you can skip forex brokers altogether and access the big banks directly.
But for most of us retail traders, we can’t skip forex brokers.
Because forex brokers in Nigeria play such a critical role in your success as a trader, it is crucial to choose your forex broker wisely.
When you signup, as a beginner, open a free demo/practice account with any of the above brokers.
You will use this practice account to learn forex trading.
- Learn forex trading
So you have your device, a good internet connection, and have an account with a trusted forex broker. What next?
I know the temptation is to start trading immediately. Don’t.
First, learn how to trade forex.
Forex trading fools many to believe it is so easy, but facts show that over 90% of retail traders lose their investments.
That means that 9 of the people who tell you they trade forex have lost or will lose all their capital.
That is why it is imperative to learn forex trading the right way.
What’s important to know are the basics of trading (easy), learn the platform (very easy), learn chart patterns (reasonably easy), and learn to manage risks (complex).
With practice, learn and master trading psychology (very hard), become disciplined (Very, very hard).
All the forex brokers I recommend have decent forex trading courses that will equip you with all the knowledge you need to learn how to trade forex.
I tend to avoid paid courses because you can get almost all the knowledge for free from the internet. Instead, follow the above guide to structure your education.
Google and Youtube alone can teach you how to trade forex.
Only after you have mastered trading on a free demo/practice account should you move on to trading on a live account with real money.
- Start trading and make money
Abeg! Don’t start live trading until you have learned how to trade.
Live trading is a rollercoaster ride without seat belts if you don’t know how to trade.
But when you are ready, deposit a fraction of the money you want to invest in forex with your broker.
When you are consistently profitable, over a while, say, three months to 12 months, you can increase your capital.
At this point, you will be minting the money from forex trading.
Better still, get a feel of live trading with free money from some forex brokers.
You can get the feel of live trading with the free money from forex no deposit brokers in Nigeria give. It is real money, you trade it, and you can withdraw the profits.
How to make money from forex trading in Nigeria
Earlier, under how to start forex trading in Nigeria, I gave you an idea, albeit in passing, of how to make money from forex trading.
As a social investor, making money depends on the traders you chose to invest with. You deposit, the trader trades, he makes a profit, you make money. Simple.
As a trader, this is how you make money. Assuming you’ve gone through every task in the section above on how to begin forex trading in Nigeria, opened an account with our recommended forex brokers for Nigerians, learned how to trade forex, deposited your money.
The concept is easy to understand.
Your broker will have several trading instruments.
Under the forex instruments, your broker may have tens, even hundreds of currency pairs.
Say you want to trade the EURO against the US Dollar.
This you will see in your platform written as EURUSD or EUR/USD
Two currencies written like this are called a currency pair. Which could be GBPJPY – (British Pound vs. Japanese Yen) or USDCAD (US Dollar vs. Canadian dollar).
So how do you make money?
Assume (for whatever reason) you believe the EUR will become strong and the USD is going to weaken.
As a trader, you would want to buy the EUR and sell the USD. Then, you would place a buy order.
You would then hold it up to a point you believe (for whatever reason) that the EUR strength is winding up.
An example would drive the point home.
Assume you are staring at the chart above.
Price drops, and around 1.21125, you think (for whatever reason) that the EUR will become strong.
So you place a buy order at 1.21125
You are right; the Euro strengthens against the US dollar.
When the price shoots to 1.21765, you decide (for whatever reason) that it is time to exit.
Within the two hours you held the trade, the EUR would have gained (1.21765 – 1.21125) by 0.0064.
In terms of pips, it would have moved from where you bought to your exit by 64 PIPs (A PIP is a percentage in point – it’s a measure of a currency change.)
Assuming you entered the trade with a standard lot size; 64 PIPs equate to $640
That’s how you make money from forex trading.
Simply put, you make money in forex trading by buying an instrument at a low price and selling it at a higher price. Or selling an instrument at a high price and buying it at a low price.
You should be asking yourself how do you know when to enter and when to exit a trade? For how long should you hold the trade?
It is in answering these questions that you learn to become a successful and profitable forex trader.
Your trader education will give almost all the theoretical information you need to answer these questions.
But, what makes you successful is your humility to learn and practice what you learn.
The truth about forex trading every beginner needs to know.
It will do you justice to know the truth about forex trading.
Forex trading is a paradox.
It is easy to make money if you know what you are doing or are lucky, and it is hard (impossible) if you are just messing around.
If we are honest, 90% of retail traders are messing around.
Most traders think because it is easy to click the buy and sell button, they can make money just like that, so they dive in blind. The result is losing everything they deposit.
Here is essential advice beginners and pros alike need to heed about forex trading.
Lower your expectations – with $100; forex trading can undoubtedly get you a Ferrari to blast at pedestrians and a beach house. But it is asking too much from $100.
The pressure to turn the $100 to $1,000,000 will undoubtedly cause you to risk beyond your tolerance, eventually causing you to lose your money.
Think long term – the easiest way to lower your expectations is by adopting a long-term mental framework. Think long-term.
Ignore the stories of folks who got to $100,000 with a $100 deposit within one month. (Many’ve done it)
Traders who achieve such mean feats have years of experience and lady luck on their back.
Think of a doctor. How many years did it take them to achieve the success they enjoy now?
Seven years in medical school, one year for the compulsory housemanship programme, don’t forget the one-year pre-primary education, six years primary, three years junior secondary, and three years senior secondary.
It will take a doctor another 10-15 years to earn 1,000,000+ NGN a month.
So, why do we traders expect to earn 1,000,000 within one week of learning what forex trading means? Greed. Stupidity.
How much money can you make from forex trading in Nigeria?
What we are lucky to have as traders is the power of compounding.
To that, Albert Einstein said, “Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”
This is what compounding looks like.
After 12 months of trading, this is what you could earn if you deposit $200. You risk 1% of your account balance and earn 3% of your account balance daily.
In the first month, with your $200 deposit, your daily profit would be $6, but at the end of the 12 months, your daily profit would be $4,000
That is the power of compounding.
But you can only get there after you’ve learned how to trade, only if you think long term.
A guiding principle to thinking long term is.
Don’t trade with money you can’t lose – don’t trade with your rent or loan money. The pressure to make money will drive you nuts. You will make all the trading mistakes in the book.
Last thoughts on forex trading in Nigeria for beginners
I must say, choosing forex trading in Nigeria is a great decision.
You can trade your money or have someone else trade your money by investing with copy trading platform.
Now back up that decision by walking the right path to success.
What you need to become a forex trader in Nigeria is;
- A good computer or laptop or smartphone,
- A good internet connection.
- A reputable forex broker
- Solid forex trading knowledge
- Capital to start trading
When you have all the five requirements above, with a proper mindset of thinking long term, you will make a lot of money to fulfill your wildest dreams.
But before you go, I know you know a couple of friends, colleagues, and family interested in learning how to trade forex.
If any bit of this article helped you, do me a favor and share this article with your friends. Email it, share it on Twitter, or post it on Facebook and any other social media platform.
Trust me, lots of people lose money in forex trading because they don’t know the right way to start trading forex.
This article, like I believe has helped you, will help others.
Sharing is caring.
To your success.