The forex market is a global platform where currencies can be exchanged, even the Nigerian Naira, regardless of whether it is for business, travel, or leisure. Every exchange rate is determined by various factors such as the overall economic situation in Nigeria, news releases, and so on. This involves keeping up-to-date with economic news and events that could affect currency prices. You should also monitor your trades and adjust your strategy as necessary. It is important to stay disciplined and not let your emotions cloud your judgment. Fundamental analysis involves evaluating economic indicators, such as interest rates, GDP growth, and inflation data, to forecast currency movements.
Forex trading in Nigeria: pros and cons
- Fundamental analysis also factors in geopolitical events and news to determine the price movements of a currency.
- If you predict the EUR will fall and USD will rise in value, it means you predict that the EUR/USD exchange rate figure will reduce.
- A proper approach towards Forex trading can turn out to be key to financial growth.
- In 2020, the global forex market was worth over $2 quadrillion USD — a truly staggering number.
- This is less of an issue in the forex market because it trades 24 hours a day.
- At Forextrading.NG our ultimate aim is to help you choose the best broker for your trading needs.
The accessible, decentralized nature of the forex market connects investors around the world, and Nigeria is 1 of the countries taking full advantage of the market. A recent report from Dailyfx, a leading forex research firm, tells us that forex attracts upwardly mobile Nigerians looking for stable, consistent investments. If you are looking to trade on the forex market in Nigeria, here is what you need to know. We have only selected brokers that Cloud stocks are regulated & offer both Mobile app & web trading platforms. There are many different strategies that are followed by successful forex traders. But most of them fall into 2 categories which are ‘Technical Analysis’ and ‘Fundamental Analysis’.
Currency diversification
Trading techniques can easily be developed using the trend lines that can be seen on a line chart. Price breakouts or trend shifts may be detected using the information contained provided in a trend line, for example. ️ Between 7 pm and 2 am (GMT) when the Tokyo and Sydney exchanges operate.
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Nigerian traders must always use a stop-loss on every transaction they open to avoid significant losses in Forex trading. When the price reaches a certain level, a stop-loss order will automatically terminate the transaction. Mobile trading platforms have become extremely popular in Lagos as it allows Nigerian traders to remain updated on their trading while they travel. Investors who have a long-term view of currency markets may maintain holdings for months or even years at a time.
Market Resources
Tight spreads are preferred as they minimize trading costs, allowing traders to retain more of their profits. By leveraging the educational materials, reliable platforms, and trusted brokers available, Nigerian traders can confidently enter the Forex market and aim for success. Forex in Nigeria has grown significantly in recent years as more traders embrace the potential of making money from currency movements.
However, this is not the way it always turns out, with most traders experiencing significant losses at this point. Even though it seems clear, a large proportion of new traders fall victim to Forex trading scams or deal with unlicensed brokers despite this fact. Anyone claiming to be a “Forex expert” on social media should be avoided if there is no proof backing this claim. A down candle is coloured red or black, while an up candle is coloured green or white and signifies a time of rising prices.
Our team spends thousands of hours per annum researching brokers and gathering information about them to help investors all over the world to choose reliable companies and to avoid fraudsters. Indeed, the curating, sourcing, and organization of this process requires substantial financial investment by Tradersunion.com, which the website earns in the form of advertising payments. There are two types of advertising services on the website — direct advertising or partner (broker) participation programs.
But that does not mean the trade will definitely be profitable, you could get stopped out. Adjust your position size based on the risk & pips you need to risk for this stop loss. You can place a sell order when the currency is at a higher price and then when the value falls significantly, you can buy it back at lower price, thus realizing your profit. The short position can be taken when you believe the price of the currency will fall in the upcoming period. If the present price of EUR/USD is 1.10 & you think that it would fall to 1.0 in the near future then you can place a sell order in the marker. You buy the currency at a low price, and once it reaches a higher value, you can then sell off the currency, thus making your profit.
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- But there are foreign forex brokers like HF Markets, Exness & others that accept traders who are based in Nigeria.
- For each currency pair, the current rate of exchange between the two currencies is represented by the two currencies in the pair.
- Many people wonder where forex trading is done but actually there is no physical office location.
- When choosing which currency pair to trade, you should understand the volatility & the factors which move that pair.
- Today, forex trading is seen as a viable income source for many Nigerians.
- With proper education and infrastructure, Nigeria has the potential to become a leading forex trading hub in Africa.
In this guide we will learn how forex trading works & the platforms that accept Nigerian traders, and how to avoid offshore high-risk brokerages. Swing traders often rely on a mix of fundamental and technical analysis to identify entry and exit points. Key tools include trendlines, Fibonacci retracements, and economic indicators. Beginners can benefit from swing trading by focusing on well-analyzed trades and maintaining a disciplined approach to risk management.
If you’re a patient trader who doesn’t care about small, short-term chart moves, this type of trading may be for you. You’ll need to have a good knowledge of market fundamentals and the infrastructure of the individual currency you’re trading. We have compiled the list of best forex brokers for Nigerian traders based on 9 factors. Forex trading can now be done by anyone in Nigeria, anytime, from home or anywhere through the internet. All transactions in the forex market are based on the purchase of one currency for the sale of another currency. So you are trading or exchanging the 2 currencies simultaneously for one another, hence known as ‘currency pairs’.
The liquidity & volume are lower than majors, so trading opportunities may be lower than with majors. My decision follows a close inspection of recent economic fx choice review news and data from the US, including growth reports, employment statistics, and minutes from recent Federal Reserve policy meetings. Picking a popular currency cross like this means I have the benefit of deep liquidity and potential price volatility.
➡️ Risk-Reward Ratio – For every dollar invested, the risk/reward ratio illustrates how much money an investor stands to gain or lose. When evaluating The Daily Trading Coach an investment’s expected returns and risk, many investors use risk/reward ratios to do so. Igor is an experienced finance professional with expertise across various domains, including banking, financial analysis, trading, marketing, and business development. Over the course of his career spanning more than 18 years, he has acquired a diverse skill set that encompasses a wide range of responsibilities. As an author at Traders Union, he leverages his extensive knowledge and experience to create valuable content for the trading community. Yes, Forex trading is legal in Nigeria, but traders should operate through brokers registered with international regulatory bodies to ensure safety and transparency.
This exempts Muslims from overnight fees, and it also provides them with their own trading conditions that are suited to their trading objectives and needs. This material ranges from live education to videos as well as webinars and tutorials. 👉 Until you feel confident enough to start trading with real money, you can simply set up a demo or practice account and put your trading skills to the test utilizing such accounts. 👉 Even though it has vastly improved in recent years, you may still come across some shady forex brokers. Check to determine whether a broker is regulated before working with them.
