How Much Do I Need To Start Forex Trading In Nigeria- Foreign Exchange trade fondly called Forex is a kind of trade that involves buying and selling of currencies with the sole aim of making profits. Forex is a very sensitive and kind of risky trade. It is either you make profit or incur loss. People have lost their money in the trade while some have proceeded to get wealthy with Forex.
The question on the heart of many that want to get involved in the trade is ; how much do I need to start Forex trading in Nigeria. Everyone wants to play safe, because its either a win or lose situation . In this post, we would show you how much you can invest as a beginner in Forex trading in Nigeria. And if you are already experienced in the trade, there are also helpful tips to guide you from making loses as you continue Forex trading in Nigeria.
How Much Do I Need To Begin Forex Trading In Nigeria
Really, you don’t need to have any money to start forex trading in Nigeria. Forex has a model called the Demo account. With demo account, you can be involved in forex trading in Nigeria without incurring any cost. But the question I want to ask you is this: Why do you want to start forex trading in Nigeria? To catch fun or to make some money? Forex can be a game or business, its up to you. If you are out to start forex trading in Nigeria because you want to make profit, then here are some tips on how much you will need to start out.
1. Start with what you have
There is no particular amount required to start Forex trading in Nigeria. The amount of profit you want to make will determine how much you will invest in it. The more profit you want , the more risk you will have to take.
2. Style of trading
The amount of money needed to start Forex trading in Nigeria depends on style of trading. People trading in forex for a short duration usually prefer to invest small amounts while those trading for a long time usually invest more and allow their profits to accumulate.
3. Level of risk
It is another factor that determines how much you should invest in forex. Whenever, forex market is down, it is those with small accounts that their account gets wiped off. So, experienced brokers usually play safe by trading with moderate amounts of money.
What To Do When A Small Amount Is To Be Used For Forex Trading In Nigeria
There is really no much safety net when using a small amount of money for forex trading in Nigeria. For example, if as a trader, your account has a $500 margin requirement and you lose $600, you wont be able to access the account until when you put more money. Small account is prone to negative uncertainties. Also small accounts is limited to specific marketplace and trading techniques. Large accounts can be operated on all marketplace.
Here is how to safely trade with small accounts:
Take advantage of leverage
Leverage allows traders with small account. In this method, the trade’s margin need is reduced.
Be conservative with your trading
As a trader with small account, you should trade conservatively. Your risks should be well calculated and evaluated before taking them.
Apply the 1% Risk rule
When you trade with a 1% risk rule, your account is protected against unexpected losses. Many traders (both small and large account holders).
What Will It Cost To Run Forex Trading In Nigeria
Aside your deposit fees which you would be using as your start up trade, there are some other cost you will be incurring as you get involved in Forex trading in Nigeria.
Spread
This is one of the expenses you would be incurring in forex trading in Nigeria. Spread is usually the difference between the ask and bid prices for a currency pair. Your spread is determined by:
- Market condition
- Whether your broker charges floating or fixed
- Size of your account
Commission
This depends on your total trading volume. A fee is levied for traded lot.
Inactivity fees
Many brokers charge inactivity fee. If you don’t meet up with a minimum trading volume e.g 10 deals in 3 months.
Slippage
It is another cost you may incur in Forex trading. It is simply a price disparity between what was on the screen shortly before making a transaction and the price at which the deal was carried out.
Overnight Rollover Cost
This cost come up with your transaction is more than one day
Deposit and withdrawal charges
Whenever you make deposit and withdrawal, you will be charged some fees.
Currency conversion fees
When you trade in other currencies or make withdrawal or deposit in another currency, you will be charged some fees.
For the benefit of people that just want to get into Forex trading, I will give a little introduction into the Forex trade in the following paragraphs.
What Is Forex Trading
Forex trading simply involves buying and selling of currencies with the goal of making profits. It is an over-the-counter market where investors trade currencies, investors, institutions, bank and retails/ traders are popular personalities you find in the forex market . Forex is the largest trading market in the world with an average daily turn over of 6.5 trillion.
How To Begin Forex Trading In Nigeria
Here is what you Need To Start Forex Trading In Nigeria
- A good laptop
- A stable internet connection
- Good trading strategy
- Starting capital (minimum of 50,000 naira)
How To Start Forex Trading In Nigeria
You need to find a reliable forex broker .
Examples of such forex brokers include FXTM, XM, Forex, Exnesis, Hot forex, Forex. com, FxPro, Oanda, etc.
Start with a demo account
As a beginner, it is advisable you start forex trading in Nigeria with a demo account. With a demo account, you will be able to master tactics and strategies you will need to succeed in Forex trading in Nigeria.
If you start out with a live account, your money may be at serious risk. So it is advisable that after locating a forex broker, you start learning the trade with demo account ( as a newbie in forex trading in Nigeria).
What to learn on demo account?
- Trading strategies
- Mastering the trade
- Knowing and understand what works for you under different market conditions
Create a live account
After mastering forex trade, you can go ahead to create a live account. Your account will be verified after which you can now fund the live account.
Start trading
After funding your account, the next step is to start trading. There are two positions you can take in the forex market:
- Long position
- Short position
Long position: When you buy a currency pair with an aspiration that it will rise in value in the nearest future
Short position: When you place a sell order because you believe a currency will fall in value in the coming days
Close trading
You need to close trade in order to realise profit or loss made. The movement of the currency pair you are trading in will determine if you will be making profit or running at loss at the close of the trade.
Last Word
Forex trading in Nigeria can be a risky one, but you can make it a calculated risk. If you play by the rules and you are not being greedy, your losses would be minimal, that is if you incur any.
Frequently Asked Questions
Can I get rich with Forex?
It is actually possible to get rich with Forex. However , it is a gradual process. Forex is never a get-rich-quick scheme.
Who is the most successful Forex trader in Nigeria?
- Uche Paragon
- Bade Ajidahun Afioluwa
- Blessing Ezeako
- Chinedu Onuoha Patrick Ogagbor
- Benjamin Ilesani Ajimoko
- Sandile Shezi
Why do a lot of Forex traders lose money?
Over trading is one major reason many forex traders keep losing money. Over trading means trading too big or too often. Over trading could be caused by market addictions, high profit goals, insufficient capitalization, etc.
Is Forex a profitable trade in Nigeria?
Forex is actually profitable, however it is a high risk trade. It involves lots of betting and guess work. This is why you really need to master it through the demo account before venturing into the real trade.
Can I trade Forex as a Nigerian?
Yes. In fact, Nigeria is one of the leading countries in the world taking advantage of forex?
Reference
- https: // forexbroker. ng – 7 Most Successful Forex Traders- Nigeria Edition
- https: // admiralmarkets. com- Top 9 reasons why Forex traders fail and lose money
- www. pulse. ng- How much do you need to start trading Forex?
- www. forexbroker. ng -How much money do you need to trade forex in Nigeria?
- www. forextrading. ng – Forex Trading in Nigeria- The ultimate guide for beginners
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