Forex Trading in Nigeria

An exciting market with enormous money making potential, Forex trading is extremely popular all over the globe. You can make money trading forex even if you do not have a Wall Street experience. You can access forex trading and make money via online brokers anywhere in the world as long as you have Internet connection. However, it is important to know what restrictions (if any) are placed on forex trading in your country. This article will explore forex regulations in Nigeria and provide a short guide to what Nigerians should consider when choosing a forex broker.

Unlike some other countries, forex industry in Nigeria is not over-regulated. It enjoys a truly free market economy environment. According to the Central Bank of Nigeria, everyone can participate in foreign exchange trading as long as the trading is conducted via a bank or a broker. There is no specific registration required for forex brokers who want to operate in Nigeria, therefore many well- known brokers accept Nigerian customers.

It is impossible to underestimate the importance of doing the due diligence when selecting a forex broker. One should look for reputable brokers with at least several years of market experience and check the conditions offered to see if they suit your trading needs and meet your trading goals. Check the currency pairs offered and the spreads. Lower spreads mean higher profit for you. Professional brokers always offer low spreads on majors: less than 2 pips on EURUSD, the most popular currency pair.

Using a market maker allows you to choose the best conditions for trading, to use the quotes available, and enter large transactions with a minimal initial outlay. Usually, you are able to buy/sell currency contracts equal to $100,000 with only $1000 used as a margin, in other words, use the 1:100 leverage. However, some brokers provide leverage of up to 1:500. Higher leverage is riskier, but it gives greater trading flexibility and increases potential profit.

One should also pay attention to country-specific nuances. In addition to the general rules described above, every Nigerian trader should pay attention to the following:

Check Customer Support Hours

You obviously do not want to be in a situation when you need help and you are unable to get it. You want to receive quality help and attention from your broker whenever you need it, even if you are in a different time-zone. Your best option is to sign up with a broker that has support staff available to help you anytime you have a question or a problem. Remember: services provided by reputable brokers are backed by free 24-hour support on weekdays, when the market is open. Check if they offer Skype, ICQ, online chat support in addition to basic phone and email support.

Check Payment Options available to Nigerians

Most forex brokers accept deposits by bank wires and credit cards. In addition to that, many brokers will allow you to fund your trading account via PayPal, Moneybookers, and various e-currencies, such as Liberty Reserve, pecunix, c-gold, etc. With so many funding options available, you may think that any broker will be convenient for a Nigerian trader. You are mistaken. First of all, you would be surprised at how many brokers accepting credit cards will not allow Nigerian traders to use cards for account funding. Secondly, Nigerians either simply do not have access to some payment options offered by a broker (PayPal, for example) or find them expensive to use (international bank wire).

If you are in Nigeria, your best bet is to find a forex broker accepting e-currencies for deposits. It is faster (even instant with some brokers) and cheaper than bank wires. If you want to use your credit card, make sure you ask your broker in advance if they accept credit cards from Nigerians.

Get information about the fees involved: ask if you will be charged a fee for funding your account and for getting the funds out. Find out how long it usually takes to fund your trading account and to process your withdrawal request. Ask if there’s a minimum amount required to make a withdrawal.

Education

The size and volatility of forex market provides excellent opportunities for making profits, however one should always remember about the risk factor when entering the foreign exchange market and understand the importance of forex education. You need a broker providing free educational tools, economic calendar, real-time exchange rates, forex market analysis, charts, and forecasts. Many brokers will allow you to sign up for free online seminars, also called “webinars”, and some may even hold free educational seminars in your country.