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Why you should consider making money through forex trading in Nigeria

Olumide Adesina by Olumide Adesina
March 16, 2023
in Currencies, Exclusives, Markets, Spotlight
Using Forex trading as income in Nigeria
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Nigeria has experienced a rise in forex trading over the past several years, much like many other nations around the world. This is mainly because investors are looking to diversify their portfolios and trade in overseas markets. 

OTC FX trading reached $7.5 trillion per day in April 2022, up 14% from $6.6 trillion three years earlier. Indeed, forex has transcended being just something that only financial and investing experts engage in. In this article, we will be looking at a few reasons why investors are choosing forex.  

In the meantime, note that currency trading requires extensive research, knowledge, and monitoring. Make sure you get independent financial advice before putting your money at risk. 

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Budget-friendly: Unlike many other investment options, forex trading is quite cost-effective. This implies that novice investors or those wishing to dabble in FX can do so without overspending or taking unnecessary risks. 

Choice of currency: You may have access to dozens of currencies and currency pairings to invest in, depending on the platform you use. You can choose from developing market currencies in addition to the more significant ones, including the American dollar and the British pound, which are the most often used. 

The Canadian dollar, Japanese Yen, Rupee, and Krona are just a few examples of reliable emerging market currencies you can invest in. Another factor contributing to Nigerian investors’ love of FX is the fact that they frequently search for chances outside of the euro. 

Various trading techniques: The availability of a variety of trading tactics is another factor contributing to forex’s enormous popularity in Nigeria. Forex allows you greater control over your investment than stocks, which require you to buy, wait for a profit, and then sell. 

Scalping: Scalping is a well-liked but time-consuming trading approach. Gains in foreign exchange occur when the currency you purchased gains value relative to the currency you used to purchase it. Because of how minute these movements can be, scalping is practised. Scalp traders sell when they notice a small increase, but they do so frequently, which results in substantial gains over time. 

Short term trading: What you think it is, day trading is exactly what it is. Day trading is taking a position in the early morning and holding it open for a few hours or the full day before closing it. Day trading is popular despite being challenging to master since it is more unpredictable and frequently involves more money. 

Long-term market positioning: By far, the most often used approach among regular investors is position trading. It entails holding onto your position for a few weeks or months in the hopes of making more gains. Given that strong currencies frequently trend upward, the longer you wait, the greater your returns will typically be. 

The markets are always open while trading forex, which is a significant advantage. Forex never sleeps, so you may trade whenever you want. In contrast to something like stocks, where you must wait for the bell to sound for the floors to open to do anything. 

It is impossible to control a market: The concept of a few whales owning most of an investment makes many investors nervous or completely turned off. This is because those whales effectively control the market, which means they may determine whether you make money or not. 

But, because there is so much liquidity in the FX market, being a whale is all but impossible. 

Forex trading risks: Little changes in the market can have a large effect. Most FX trading products have significant leverage. Even when you only contribute a small portion of the trade’s total value upfront, you are still liable for the entire sum. 

Exchange rates fluctuate a much. Even in relatively brief bursts of time, they have the propensity to move around a lot. Significant investing risks exist since currency fluctuations could work against you and result in a loss of funds. 

The currency markets are quite challenging to forecast. Exchange rates are affected by several different factors. 

The effectiveness of risk management methods is limited. Your losses will only be limited by stop-loss orders. You could also pay a higher price to have your stop-loss order guaranteed. 


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Tags: Forex trading
Olumide Adesina

Olumide Adesina

Olumide Adesina is a financial market writer, analyst and investment trader. Message Olumide on Twitter @Olumidecapital

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Comments 4

  1. PHIL says:
    March 16, 2023 at 6:55 pm

    MY PROBLEM IS COLLATING SATURDAY RESULT WITHOUT BIVAS ACCREDITATION MAJORLY IN LAGOS. LABOUR AND OTHER PARTIES SHOULD PREPARE FOR THIS……this should be escalated pls

    Reply
  2. res non verba says:
    March 16, 2023 at 9:38 pm

    Forex trading is a highly speculative and risky venture, and many individual investors lose money in the market. In fact, statistics show that the majority of retail forex traders tend to lose money over the long run.

    According to a study by the National Futures Association (NFA) in the United States, which looked at forex accounts of retail traders from 2007 to 2016, around 73% of forex traders lost money in each quarter of the study period. Another study by French regulator Autorité des Marchés Financiers (AMF) found that between 2009 and 2012, 89% of retail forex traders in France lost money.

    So please, don’t misinform individual investors please…

    Reply
  3. babaztee says:
    March 18, 2023 at 9:23 pm

    regardless of the general perception on retail traders, one can profitably trade forex and make profit on regular basis. Profitable forex traders know when to enter the market, exit or stay away. Novice traders must trade whenever they come to the market, the reason for losses.

    Successful Forex trading requires building skills – technical and money management skills, accepting losses when it happens and never to react to the market.

    You can consistently make profit in Forex trading when you have mastered your emotions and play the game according to the rules. Patience is another key to making money in forex. How many traders can wait for days for price to reach your zone of entry?

    Reply
    • res non verba says:
      March 24, 2023 at 12:52 pm

      Seems like you’ve simply highlighted the difference retail gambling vs institutional investing…At no point did you mention the use of informed decision-making and analysis of fundamentals—underlying economic, financial, and political factors that affect currency prices. This includes evaluating factors such as government policies, trade balances, and geopolitical events which is what institutional investors leverage instead of market psychology

      Reply

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