Forex trading in Nigeria has become more accessible in the past few years. The country has seen rapid economic growth, which resulted in higher incomes for Nigerian citizens despite some of the remaining post-2014 economic issues.
This article will be useful for novice traders who live in Nigeria and for those who are only getting started. Read on to find out which approach to learning is better, why you need to have a profitable trading strategy and which one is the most effective, and how to choose a reliable Forex broker.
Current Financial Situation in Nigeria
Nigeria is the most populous country in Africa and the seventh-most populous country in the world, with an estimated population of 206 million. The World Population Prospects predicts that by 2050, Nigeria will become the third most populated country in the world. More than one-third of Nigerian citizens are young people - about 62 percent are below the age 25 years.
The gross domestic product per capita has increased from $352 in 2001 to $2,250.00 projected by the end of 2020 – which amounts to about 540%. This is a good indication of Nigeria's expanding economy.
Despite the fact that Nigeria is a relatively prosperous African country, most Nigerian citizens would agree that it may not always be easy to fend for oneself here. That's where the opportunities for additional income come into play. Forex trading is becoming more and more popular in Nigeria. Even though Forex traders in Nigeria are believed to comprise as much as $1.25 million daily turnover on average, very few global Forex brokers have their presence in Nigeria. That's why Nigerian traders need some good advice and guidance. You can find all of that in this article.
How to Start Trading Forex in Nigeria
The general requirements for a Nigerian trader are the same as for any other novice trader. You need to have a computer or a mobile device, a stable Internet connection, initial capital (we'll touch upon the topic of how much exactly later) and a trading account with a reliable Forex broker. The stability of Internet connection and power supply has become considerably higher in recent years, especially in urban areas, which has significantly reduced the risk of interruptions in the trading process. However, this doesn't mean that traders in Nigeria should blindly place orders, expecting everything to be fine. You should never ignore stop loss levels - to be on the safe side and prevent massive losses in the event of a lost connection and power shortages.
Later in this article, we will discuss the details of how to set up your Forex trading. At this point, we would like to note that there's no point in even getting started until you have a solid trading strategy and until you are psychologically prepared to open your first trade. Of course, your trading success doesn't depend on your positive mindset alone, but the lack of it can harm your judgment and the ability to build a profitable trading strategy. Moreover, the absence of a solid trading strategy makes Forex trading look more like gambling when you start "guessing," not trading and making strategic decisions. As a result, you risk wiping out your entire account.
The most effective trading strategy which has proven itself over the years is trading with the trend or trend trading. It means that you enter the market only when there's a strong and clear trend. Another rule of thumb is cutting the losing trades short and letting your profitable trades run. However, even if you have a working trading strategy, you should be ready to fail as well. Unsuccessful trades are inevitable. It's part of the process. By keeping risk levels at bay and sticking to money management rules, a smart Forex trader can ensure his "survival" during the periods of drawdowns and win back his losses when the market turns profitable again.
It is important to understand that Forex trading isn't a quick and easy money source. It requires special knowledge, self-discipline, patience and dedication.
How Much do I Need to Start Trading Forex in Nigeria?
Some Forex and CFD brokers don't have any minimum initial deposit requirements and will allow you to start with as little as $10. But that's in theory. The problem is that if you're going to use leverage in your trading (and with this little capital, you basically have no other choice), it doesn't make any sense to get started with less than $100 or its equivalent because it will hardly cover the margin required by your broker for opening a trade. Besides, most Forex brokers don't accept deposits directly in Nigerian Naira, so be ready to lose some money on currency conversion as well. As you can see, even $100 can be problematic, so we highly recommend considering an initial deposit starting from $500.
What is The Best Time to Trade in Nigeria?
One advantage of Forex trading that can be enjoyed by everyone living in Nigeria is the time zone. Nigeria is one hour ahead of London, the global hub for currency trading.
The best time to trade Forex is when the market is the most active, i.e., demonstrates the highest volatility and trading volumes. Research shows that the greatest liquidity in the Forex market occurs at the intersection of the London and New York trading sessions. Trading remains relatively active until the New York session closes. Luckily, this means that the best time to trade Forex is between 2 pm and 10 pm Nigerian time. These are rather convenient hours for most Nigerian traders. You can easily stay awake during this period. You don't have to sit through night trading. Most of this time falls after regular business hours, meaning that Nigerians don't need to sacrifice their normal jobs to day trade Forex successfully. They can easily catch peak market hours and make a good profit.
If you want to make money trading Forex, you will need the services of a broker. For example, you can rely on the services of the regulated broker AMarkets, which offers protection of up to $20,000 for traders' accounts.
AMarkets offers a wide range of trading assets to invest in: Forex, stocks, cryptocurrencies and commodities.
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