FOREX IN NIGERIA

What is Forex？

It is a financial marketplace where buyers and sellers of foreign exchange can transact. The largest market in the world is forex. Forex had an average daily turnover of $6.6 trillion in April 2019, up from $5.5 trillion three years earlier, according to the Triennial Central Bank Survey. On weekdays, forex can be traded in the world 24 hours a day without the interference of a centralized authority.

Nigeria reportedly has the fastest-growing middle class in Africa and has both the continent's largest population and economy. Nigerians are becoming increasingly interested in FX as a result of the country's consumer boom.

Is Forex legal and regulated in Nigeria？

Any Nigerian citizen who uses their own money to trade on the forex market is allowed to do so. Although there are no specific legal requirements for Forex traders in Nigeria, it is crucial to keep in mind that all residents of Nigeria should pay their taxes. Instances where the trader's account funds are held abroad and the Forex broker is registered in a different nation fall under this category. In Nigeria, 10% capital gains tax is typically due on all gross earnings made by forex dealers.

A few years ago, there were rumors that the Association of Online Forex Trading Agents had been founded in Nigeria. But nothing has been heard from the group since.

For Nigerian forex dealers, the lack of rules might be advantageous in several ways. Brokers, for instance, are not constrained in what they can provide to traders. Regulators in other nations can restrict the amount of leverage brokers can give or forbid trading in CFDs (contracts for differences). Brokers in Nigeria are free to offer CFD trading and leverage up to 1:1,000. Additionally, the absence of rules may entice many brokers to Nigeria, which might lead to increased competition and improved trading conditions.

Problems Forex traders may face

Trading in the Forex market has its own risks that potential traders should be aware of. Here are some potential difficulties a novice trader can encounter:

One of the major issues a Forex trader faced is dishonest brokers and con artists. Look for a trustworthy broker, especially one that is registered in a nation with a regulated foreign exchange market.

Another key issue that many new Forex traders have is a lack of knowledge and expertise. Before you begin trading on the Forex market yourself, learn as much as you can about it. Before putting real money at risk on a live account, practice trading on a demo account. When we talk about how to begin trading forex, you can learn more about what a demo account is.

Losing all available funds: Trading foreign exchange is a very risky endeavor with a high likelihood of failure. Only money that you are willing to lose should be invested in the forex market.

Blindly adopting the trading tactics of other traders entails listening to advice you discover online without studying it, utilizing robots and expert advisers without understanding how they operate, and employing strategies you find online, in a book, etc. without comprehending how and why they operate.

Poor risk management – You must be aware of the risks associated with each trade you make and decide if the potential reward justifies the risk. You should only risk a set (ideally modest) portion of your total money on each trade, and you should learn what a stop-loss is and how to use it to reduce risk.

Overtrading: educate yourself on when to trade and when to stay away from it. Every Forex trader needs to understand that they shouldn't trade for the sake of trading. Only trade when you are reasonably positive that the market is moving in your favor.

How to begin forex trading in Nigeria

The steps indicated below must be followed in order to begin trading forex:

Make sure you have a reliable and quick Internet connection because you need one to trade forex. Although you can trade Forex regardless of the speed of your Internet connection in theory, you can get into instances where you need to react quickly in actuality. You do not want to lose money or miss out on a great chance because of a slow or unstable Internet connection.

Learn about Forex; at the absolute least, have the fundamentals down before you start trading. But you need to know a lot more than the fundamentals to be a great trader.

Select a reputable broker who offers terms that are agreeable to you. You need to find a broker with a strong reputation. On the broker's website, review the terms and conditions. One reason to be wary of the broker is if certain crucial details are missing or seem hazy. internet reviews to read. Verify the broker's registration with the regulatory bodies in the nations where the foreign exchange industry is controlled. You might also simply pick the broker that appeals to you the most from the list of reputable brokers at the conclusion of this article.

Open an account with the broker of your choice by visiting the broker's website and completing the account opening form.

Get a trading platform downloaded: To trade on Forex, you need software. The two most popular trading platforms are MetaTrader 4 and MetaTrader 5, however you should ask your broker which platforms are available.

Start trading; make an effort to be prudent and wise, but do not anticipate winning every trade. In reality, you stand a good possibility of losing money if you're a novice trader. Do not give up! Analyze your errors and try to determine what went wrong.

Change your approach if necessary or select a new one. Don't forget that talking to other traders, getting their advice, and exchanging ideas can be quite helpful. Forex traders can communicate in a variety of online spaces, including our forum.