23/10/ · The African country, Nigeria, has a very pulsating economy, and the main contributors to this success are gigantic oil reserves and a wealth of natural blogger.com the past years, this country has improved access to global capital markets, and there is a serious demand for forex. The presence of forex has led several international brokers to create a representation in Nigeria 05/05/ · How to trade the Forex Market in Nigeria. Let me give you a brief explanation of how you will buy or sell currency pairs in the Forex market. Just follow this procedure; 1: Determine if the price of a currency pair will rise or fall. If it will rise, you will buy it, but if it will fall, you will sell blogger.comted Reading Time: 5 mins How can you start trading forex in Nigeria? You would need to choose a forex broker & then signup on their platform to trade. There are s of Forex trading platforms that accept traders from blogger.comted Reading Time: 4 mins
Forex Trading in Nigeria for Beginners (Complete Guide) | blogger.com
Retail Forex Trading via online CFD brokers is not illegal in Nigeria, but it is still unregulated. You can trade forex via foreign regulated forex brokers in Nigeria like Hotforex, Exness etc. In this guide we cover all the basics of forex trading for beginner traders in Nigeria. You should carefully read this guide to learn the risks of CFD trading before you start, especially if you are a beginner trader. Here are our best rated forex brokers for Nigerian traders. Reading this full guide would take about 30 minutes.
Are you interested in the economics of a country? Possess knowledge on factors affecting the GDP of a nation on a micro as well as macro-economic level? In that case, trading in the forex markets can be an option for you as a trader.
Forex markets involve the highest volume of trading with the use of margin. Forex trading involves buying and selling of a currency pair, each currency pair has a numerator and a denominator, how to trade in the nigeria forex market. Generally, the stronger or less volatile currency takes the position of quote currency and vice-versa. Forex trading has its uses starting from retail investors, pension funds, global banks, governments, and major corporations.
Forex Markets are used heavily to hedge and is a key component in different derivative products. For example: If a retailer has payments to be received in a foreign currency and are expecting that the FX pair value will go south in a couple of months, how to trade in the nigeria forex market, they usually buy FX contracts to lock in the FX rates and get guaranteed amounts at the mentioned payment dates.
We will learn more about the usage and market mechanism of Forex Markets in later parts of this guide. If it were a country, that would have been the 3rd largest country after China! For example, if you want to visit Europe, being a Nigerian, you will need Euro dollars to purchase, travel or even to stay in Europe. This is facilitated usually by a Bank who can convert the NGN held by the traveler to EUR dollar at the FX rate on the given date.
This is applicable vice-versa too. There are many non-residents across every country, to send funds to their loved ones back at home, international currency markets come to the aid. In fact, remittances in the year was close to billion USD, how to trade in the nigeria forex market, such is the importance of forex exchange FX markets. These are just few examples of FX markets usage, there are plenty more. Forex market can be termed as one of the oldest existing markets, at least its existence is supposed to date back years ago, how to trade in the nigeria forex market.
Greeks and Egyptians started to trade silver and gold coins based on their actual weight and size. This was one of the key moments for Forex market history, as currencies were freely traded to stabilize currencies across the world. This how to trade in the nigeria forex market spread across the entire world. Forex Trading firms had grown exponentially and continued to grow in the UK. Today the most traded currencies are USD, EUR, JPY, and GBP arranged with highest to lowest volume.
Important historical events for FX Markets would include the Bretton Woods conference held in It was a group of 44 countries coming together to decide that USD would be the back of the present-day FX markets and gold can be valued in USD terms. At that point in time 1 ounce of gold was agreed at USD 35, today it trades at around USD ! Policies including the Smithsonian agreement and Plaza Accord led to depreciation of the USD against all currencies in the free float market. This went on till s until the Internet Trading started wherein anyone with the help of few clicks started to trade currencies and not only the top 5 but every other legal currency too.
With more and more trusted participants joining forex trading, this became a very robust asset class and is now pegging at USD 5T transactions each day. We will now understand how these currencies are traded in the current forex markets.
The modern FX market is driven by financial derivative instruments that are used by traders and investors. ranging from FX futures, forwards, options and even CFDs. There are majorly 4 types of transactions that take place in forex markets and we will discuss them all briefly:.
Spot basically means immediately. The asset being traded using the spot rate is usually a futures, forwards, or option contract. Given the rate is uncovered at the current market situations, liquidity is high and placing orders with less spread between the bid and ask price is expected. As the word indicates, Forward transactions involve trading of futures or options using forward rates that are deliverable at a future date.
The future price fluctuation is locked in such transactions benefitting buyers in case of high volatility, how to trade in the nigeria forex market. Forward transactions have issues of liquidity when compared to spot markets. If Party A requires AUD currency while residing in Europe and Party B requires EUR currency residing in Australia, they would want to indulge in a currency swap transaction.
This basically leads to Party A paying AUD to Party B in exchange for EUR, so that both the parties can fulfill their needs. Usually, these transactions are over the counter, which basically means the trades is directly done between the parties without any intermediary. Similar to future contracts, option contracts are traded on exchanges with the underlying of a FX currency pair. Whenever the price of the currency pair moves high or lower, the contract value moves accordingly.
Options are heavily traded in the markets given how to trade in the nigeria forex market low initial payment required in the form of premium. Most corporates and banks use FX option contracts to hedge their bets in other asset classes using exotic option products which limit losses for investors while providing the benefit of market price action.
As previously mentioned, exchange rate is the rate at which 1 currency can be bought in terms of other currency. However, it is very critical to understand why the rate is pegged at a current rate and why does it move in the first place?!
Let us understand briefly the 5 main factors listed below briefly:. Inflation - Inflation is the increase rate in terms of prices of goods and services. The country is dependent on imports from other countries or has a failed economic policy in place. If it goes high, it implies excessive money circulation in the market. Monetary Policy and implementation - When the central bank of a country announces its monthly or quarterly reports, markets are volatile.
The country started having street fights and riots in protest and is still one of the poorest Latin American countries. This had a massive impact on the inflation and hence the Venezuelan bolivar crashed record low levels of economy depletion. Now that we have understood the main factors affecting forex markets and the types of transactions taking place, we will move on to understanding the basic terminologies of the market in a minimalistic way. Currency Pair — Currency Pair defined is the combination of two currencies clubbed as a pair which numerically defines what is the worth of one currency when valued against the other, how to trade in the nigeria forex market.
However, the values will be inverses whenever we inverse the currency pair numerator and denominator. So, we will the NGN in terms of the USD. Any pair which contains USD and a developed market currency is considered major currency. Exotic currencies on the other hand are emerging market currencies, which are less liquid and more volatile, therefore these are non-deliverable currencies.
Non-Deliverable currencies are those currencies which cannot be transferred or delivered in a financial transaction while trading futures, forwards, or options. This is mainly due to the instability and higher downfall probabilities in those currencies. Example are ZAR, MXN, TRY, INR, MYR, etc.
Pips — Pips or Price in point reflects the tiny amount of change in forex rates. Usually 1 pip represents 0. It is kept this low to protect investors from huge fluctuation in prices. A higher pip would have havoc change in prices creating panic among market participants. Leverage — Leverage is a facility provided by brokers while trading forex using financial instruments.
Here an investor can purchase or sell instruments in multiples of money initially invested. However, leverage varies from broker to broker, so its better to know the leverage rations beforehand. Bid is usually less than market price and ask is usually higher. The psychology of market is to buy as low as possible and sell as high as possible.
Therefore, forces of bidders and askers in the market drive market trends. Spread — The difference between bid and ask price of a financial instrument is known as spread. If the bid price is 1. Higher the spread, higher is the illiquidity of an instrument.
Markets can never have 0 spread as there is always a difference between bid and ask prices. Lot Sizes — Lot size is usually the number of underlying assets comprising the Nominal and the FX rate. The minimum units are defined in the contract. Usually it is units but can also start with 10, units in case of forward contracts. Trading Forex in Nigeria is like trading in other major financial markets how to trade in the nigeria forex market with few exceptions.
We will discuss the same and the alternative options available accordingly. All we need is close to USD or close to N, for a mini trading account.
Explained below is a step-by-step guide:. In this section, we will discuss about the various aspects of forex trading platforms in detail, which will provide you a deep insight on features affecting the daily trading in forex market. Forex markets how to trade in the nigeria forex market we spoke earlier have high frequency and how to trade in the nigeria forex market across major and minor currencies, therefore traders often end up paying high fees or maintenance charges eating up their profits.
It is very important to understand the advantages and disadvantages of selecting a particular broker before trading. Let us look into 6 of such factors which is crucial:. Having opened an account, we need to place orders for making profit! How do we do that if we do not have enough ideas or trading strategies for it.
Therefore, we shall discuss few strategies briefly split across fundamental and technical strategies. If one can predict the correct range of a FX currency post the results are announced using different fundamental analysis techniques, they sure can take in handsome profits.
How to start trading Forex in Nigeria -- Strategy
, time: 7:44How to Trade Forex in Nigeria - The Frisky
How can you start trading forex in Nigeria? You would need to choose a forex broker & then signup on their platform to trade. There are s of Forex trading platforms that accept traders from blogger.comted Reading Time: 4 mins 05/05/ · How to trade the Forex Market in Nigeria. Let me give you a brief explanation of how you will buy or sell currency pairs in the Forex market. Just follow this procedure; 1: Determine if the price of a currency pair will rise or fall. If it will rise, you will buy it, but if it will fall, you will sell blogger.comted Reading Time: 5 mins 04/08/ · You can trade forex via foreign regulated forex brokers in Nigeria like Hotforex, Exness etc. that are regulated by Tier-1 & Tier-2 regulators FCA, ASIC & FSCA. In this guide we cover all the basics of forex trading for beginner traders in blogger.comted Reading Time: 2 mins
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