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Forex trading involves the purchase and sale of currencies in order to make a profit. Forex market allows traders to place trades on the market. This is an over-the counter market that allows currency traders to trade. This platform is for institutions, banks, retail traders, and investors.
Foreign Exchange Market is one of the most important trading markets. It has an average daily turnover of US$6.5 trillion. This is more than all of the stock exchanges in the world. The “Interbank Market”, which allows trading activities to be conducted 24 hours a day and for 5 days a semaine, Monday through Friday, is used.
Experts consider Africa to be the world’s fastest-growing middle class. Nigeria is the leader of this continent. Modern Africa is marked by a rising interest in retail investment opportunities and a boom in consumer spending.
Investors around the globe can access the forex market’s decentralized, accessible nature. Nigeria is one of the countries that has taken full advantage of this market. Dailyfx, a top forex research company, recently reported that forex is attracting upwardly mobile Nigerians who are looking for consistent, stable investments. Here are the facts if you want to trade on Nigeria’s forex market.
You can trade forex online from Nigeria. You will need a computer, an internet connection, a good trading strategy, and a minimum of N50,000 to trade forex online.
Sign up with a Forex broker. There are many scam and good brokers.
Forex traders are skilled in many strategies. Most of these strategies fall under two categories: ‘Technical Analysis’ and ‘Fundamental Analysis’.
Technical analysis involves studying chart patterns, currency trends, indicators, and other data. The technical analysis and chart patterns are used to place the order. The fundamental analysis focuses on trading based upon Economic outlook for a currency that could be affected by news events such as GDP, Unemployment data, etc.
Start with low capital: Forex brokers have very low minimum deposits and very high leverage. It is recommended that you start trading with at least N50,000 capital and never risk more than 5 percent of your capital for any single trade. Trades with too little capital are risky as you will likely use high leverage to make your money. This could result in huge losses and you may lose all of your capital in one trade.
Large Trading Volume: The Forex market has the largest daily trading volume at close to 6.6 Trillion dollars. It is very liquid and you can place large orders and close them without worrying about price volatility (unless there are major events). You should be able open and close your positions at whatever price you desire in most cases.
You can buy or sell forex. To make a profit, you can open both a short and long position. You can either buy the currency and go long if you feel it is rising. If you feel that a currency has been performing poorly, you can either sell it or go short.
Forex trading is open 24 hours a day, five days a week. This trading period is longer than traditional stock exchanges, which allows you to place orders and close them during restricted trading hours. Forex allows you to place and close trades at any time during the week, rather than waiting for markets to open. Our guide to the best time to trade forex is Nigerian. Profits are greater during certain hours.
Forex trading offers currency options: This is another major advantage. You can trade in many currencies around the globe. You can trade in the major currencies like USD and EUR, as well as more exotic currencies like TRY and MXN. CFD trading is also offered by most forex brokers on a variety of asset classes such as Commodities, Metals and Indices.
High risk with leverage: Most Forex brokers offer high leverage. This can be as high as 1:1000 in some cases. With just $1 of trading capital, you can trade $1000 worth (1 Micro Lot) on the market. However, trading capital is at great risk of being depleted very quickly if you make a bad trade. Let’s take an example: You deposit $100 to your trading account and use 1:1000 leverage to buy a 1-lot trade on EUR/USD. If the price moves just 10 pips in your favor, then you could lose all of your capital. The spread at the forex broker for the instrument you trade is 1 pip. This means that your position is already in 10% drawdown. You should always practice risk management and never trade more than 5% of your trading account. Forex leverage should not exceed 1:30. Major regulators such as ASIC and FCA have restricted leverage on Forex & CFDs. However, forex brokers operating in Nigeria can offer extremely high leverage, as high as 1:2000 at Exness. It is important to regulate your leverage and not trade Forex with more than 1:30 leverage.
Avoid bad brokers: Many forex brokers are opaque and not regulated by any Top Tier regulation. They may also show Offshore regulation to inform customers they are regulated. Avoid brokers that promote forex as a way to get rich quick. You should choose a broker with years of experience, good reviews, and transparent in dealing with any issues. A reliable Forex broker will have multiple top-tier regulatory bodies, low fees, and quick withdrawal options for traders in Nigeria.
Risk of Volatility These factors are not easily controlled. It is important to be alert for any changes in the market before you place or close a trade. Also, make sure to have stop loss limits to limit losses in the event of a bad event. You could lose all of your capital, or even become negative due to price movements of currency pairs. It is important to be aware of this risk.
Emotional stress: Forex trading can be very stressful. If you don’t follow good risk management, one bad trade can lead to big losses. It can be extremely difficult to deal with losses. If you’re considering forex trading as a profession, this can cause you stress.
To trade forex in Nigeria, you don’t need a double Ph.D. You will need to have a burning desire for success and great discipline.
Forex trading online is easy and not complicated. There are many reasons that beginners think it is.
Inexperienced forex traders in Nigeria are most likely to believe this because of the hype surrounding online Forex trading.
Don’t believe all the hype. Forex trading can be learned quickly and you will soon become a successful trader.
There is only one thing to remember if you’re serious about learning how to trade forex. Forex trading is not a quick way to make money. You will fare better than many forex traders in Nigeria if you are patient and don’t rush into things.
There are tons of resources to help you get started. Here’s a list of top places to learn more about forex trading.