Making Money From Forex Trading In Nigeria

More and more Nigerians between the ages of 21 to 35 years are becoming interested in additional sources of income. Making money online has been extremely popular in recent days. There’s an endless number of ways to make some cash on the Internet. We believe that online trading is one of the best ways to generate income online, especially in the light of continuing coronavirus pandemic. People are urged to stay at home and observe social distancing. Nigeria is not an exception. That’s where online trading comes in. You don’t need to go to the office. You can trade from anywhere in the world.  All you need is a stable Internet connection and a laptop or a smartphone. In fact, you can choose any device to your liking. You can also choose any market - stock market, cryptocurrency market, or foreign exchange market. The foreign exchange market (Forex) is one of the most popular among retail traders. It has the greatest liquidity, which means that there are more trading opportunities. Absolutely anyone can become a Forex trader and make a decent profit online. Besides, you don’t have to make trading your full-time job. You can create your own schedule and adjust it accordingly. That’s what makes Forex trading so appealing too.

But let’s figure out what exactly the Forex is. Foreign exchange (Forex, FX) trading is when you buy or sell foreign currency or other financial instrument expecting it to rise or fall in price in the future so that you can make a profit from these currency swings. In the forex market, currency units are quoted as currency pairs. So you trade one currency against the other. Since the foreign exchange rates are constantly changing, you need to look for the right moment to enter and exit the market. 

One of the greatest advantages of Forex trading is that it doesn’t involve any complicated paperwork. You don’t need any license to perform trading transactions. All you need is just a bit of general knowledge about the market and finance. In this article, we’ll be sharing some tips on how to get started. Read on to find out how to make money online from Forex trading in Nigeria. Now, let’s get down to business. What are the exact steps you need to make?

• Step 1. Study trader slang

  Before you try your hand at real trading, we suggest that you learn some basic Forex terminology. Before placing your first, do some research and make sure you obtain at least some general knowledge of the subject. You can look for some online trading courses, designed specifically for novice traders. You can also seek advice from professional traders on various forums. Also, there’s a bunch of YouTube channels devoted to trading. They can offer some great insights and useful tips. We can’t stress it enough - it is essential that you learn basic FX terms and concepts. If you want to make money from trading, do your “homework” first.

  Forex is the largest and extremely liquid over-the-counter market. About $5 trillion is circulating here every day. Trading is carried out around the clock, 5 days a week. All trading operations are conducted through the interbank market, either transacted directly between large financial institutions, or via brokerage companies that execute trades for their clients.

• Step 2. Find a reliable Forex broker

  Now that we’ve touched upon the topic of brokerage firms, let’s figure out how to find a trustworthy broker. As an independent trader, you can access the Forex market only via the brokerage company. That’s why it is essential to find a decent broker with favorable trading conditions and low spreads, that offers different types of trading accounts and has a wide selection of trading instruments. The speed of order execution, the absence of slippage, and requotes are also of great importance (by the way, make sure you google these Forex terms too). Look for a broker with professional and friendly customer support. Paying attention which training educational materials it offers. It’s preferable that the brokerage company has its own analytical department. This way, you’ll be getting professional analytical reviews and market analysis on a daily basis. It may all seem pretty overwhelming at the beginning. At least now you know which criteria you should consider when choosing a broker.

  The forex market is extremely competitive. You can spend hours scrolling through abundantly available brokers. Be ready to invest some time, it’s worth it. Your future trading success depends highly on which broker you partner with. Compare different FX brokers, browse through broker reviews on the internet, paying special attention to brokers that operate in Nigeria. Study each broker’s policies, their regulation and decide which broker suits your goals best.

• Step 3. Start with a demo account

  To become proficient or skillful at any activity you need to practice it. Now that you’ve learned Forex terms it’s high time for you to start applying this knowledge. To get the trading experience you need to trade. It’s pretty obvious. But what if you are not ready to risk your own money yet? This is where a demo account “comes to the rescue”.

  A demo account is a training account that allows you to hone your trading skills and backtest your trading strategy. When you open a demo account, you’re given virtual funds that you can use in your trading. The demo account is connected to a regular trading platform used by other traders. It provides real-time quotes and market data. So, there’s no particular difference between live trading and demo trading. Except that you don’t make real money with a demo account. But it does allow you to identify weak spots in your trading, to figure out your temperament and what type of trader you are so that you will be able to pick your trading style accordingly. Almost every reputable broker offers a demo account nowadays. So, once you learn Forex basics and choose a reliable broker, open a demo account and try your hand at virtual trading.

• Step 4: Learn how to analyze market trends

  As we’ve said before, currencies are normally traded in pairs. You simultaneously buy one currency and sell it against the other. To make correct market forecasts, you need to be able to analyze market trends and price movements. For that, you will need to dig a bit deeper and learn some technical and fundamental analysis basics. These are the two main types of analysis used by professional Forex traders. Technical analysis involves studying the basic chart patterns such as support and resistance levels, trendlines, and various indicators. Technical analysis allows you to follow the price in the retrospective and see how it behaves in a particular situation. Fundamental analysis involves the study of macroeconomic and political events since they can greatly affect the asset price.

  Check the market news on a regular basis. At first, focus on major currency pairs only (the ones with the US dollar) and stay away from cross currency pairs for now.

• Step 5: It’s time to switch to live trading

  After you try yourself at trading on a demo account, move on to live trading. We bet you are ready to get a taste of live trading and can’t to start making real cash. While it may seem easy in theory - you just ‘buy low’ and ‘sell high’, successful trading is actually more than that. It’s not just buying when the price goes up and selling when the price drops.

  Successful traders often take a highly technical approach to their trading. Even if you don’t think of yourself as a technical trader, you still shouldn’t ignore the charts. Besides, most brokers offer their clients access to various pattern recognition and analytical services that give Forex signals and allow novice traders to find the right market entry points. 

Summing up

You can get started in the Forex market by following the steps we shared in this article. Remember, patience and self-discipline are key. Before you invest your own money, make sure you get the basic knowledge of the market and obtain some trading experience on a demo account.

Don't let greed and other negative emotions take control of your actions. Before opening any trade, know precisely where you will close this position. Consider both positive and negative trading outcomes. Some traders see that the price moves in the desired direction and forget about their original price targets. They become greedy, hoping that the price will keep moving in their favor and they'd make even more money. Don't make this mistake. Always set your Take Profit and Stop Loss limit orders. They will allow you to lock in your profits and avoid losses.

Well, it's time to wrap up. In this article, we've shared some practical steps and tips on how to start earning money from Forex. Practice makes perfect. Apply this knowledge to make your first steps towards becoming a successful trader. We wish you the best of luck!