Economy
6 Important Things to Consider Before Trading Forex
Forex or foreign exchange is the largest capital market in the world. The average daily trading volume of the forex market is more than 6.6 trillion USD. This is much more than the average daily trading volume of global stock markets.
The significant rise in the number of forex traders since the start of the COVID-19 pandemic has boosted the trading figures remarkably, with most of the brokers have reported their highest trading volumes in 2020 & 2021.
Nigeria, South Africa, and Kenya are countries that have witnessed the highest increase in participation from retail traders in Africa.
One of the main reasons for growth is the ease of access with which these Trading apps are available. A major percentage of the young traders have traded forex & other instruments via mobile apps.
Forex currency pairs are available to trade in Nigeria through various online forex brokers. These brokers offer easy-to-use trading platforms & apps for newbies with an interface that encourages trading. This is not really a good situation as it promotes reckless trading too.
Also, due to a substantial rise in the demand for online forex brokers, the scammers and conmen have also utilized the opportunity to scam the uninformed and inexperienced traders. Forex trading scams are at an all-time high throughout Africa and traders need to consider certain aspects before choosing a forex broker in Nigeria.
Here are some things to consider before you trade forex.
1. Regulation
Retail forex trading via online brokers is unregulated in Nigeria.
The Securities and Exchange Commission of Nigeria (SEC) has issued several warnings about the risk involved in trading forex. However, it is not illegal to trade CFDs & forex online in Nigeria.
Trading forex in Nigeria is not illegal but traders are doing so at their own risk. As forex is not yet regulated in Nigeria, individuals involved in forex trading need to take more precautionary measures and choose wisely.
No local regulatory authority in Nigeria regulates or overlooks the forex market and the activities of the forex brokers. Some of the major forex brokers in Nigeria have regulations from top-tier authorities like FCA of the UK, FSCA of South Africa, and ASIC of Australia. However, some forex brokers in Nigeria do not have any regulatory license or are only licensed through offshore regulators. Such Offshore brokers with no licenses are more likely to be fake and must be avoided.
In case of lack of regulation in Nigerian, Broker’s regulation from top-tier regulatory authorities ensures the safety of your funds. Any malpractice or complaint against a regulated broker can be reported to the regulatory authority.
Past records of registered complaints can also be checked for the regulated brokers. Every regulatory license of the forex broker will have a license number that can also be cross-checked from the regulatory authority for authenticity.
Trading forex in Nigeria via an offshore broker can be very risky as no complaint can be registered in case of deceit. This increases the third-party risk substantially making forex trading even riskier.
2. Scams Related to Forex & Investments
It is important to have a look at the types of scams that have been committed against investors in Nigeria. The recent scam MBA Trading Limited had estimated to have cost unsuspecting investors Billions of Naira.
Most of these scams in general have nothing to do with the forex & other capital markets but are scammers and conmen taking duping inexperienced investors.
Scams related to the forex and cryptocurrency market are at an all-time high in Nigeria. Traders need to take every possible measure to avoid falling into the traps of scammers.
Many fake agents or brokers may reach you with unsolicited investment advisory and force you to make quick deposits. They may gain your interest by promising unrealistic returns and illogically low-risk factors. Traders and investors must know where their hard-earned money is going and what are the risks associated with it.
Traders and investors in Nigeria must ensure the authenticity of the regulatory license held by the broker. The chosen forex broker must have at least one top-tier regulatory license. This greatly reduces the chances of scams by the broker and ensures safety.
Besides checking the license, traders must also stay aware and look out for red flags that signal a scam. Common red flags include delaying withdrawal, forcing to buy or sell, changing fees, asking for too many documents, etc.
3. Currency Pairs
Forex trades can only be executed with a pair of currencies. One currency in the pair is bought and sold while the other is exchanged in return for the purchase or sale of the pair.
For example, in EUR/USD currency pair, EUR can be bought or sold in return for USD. Or vice versa.
The price movement in each of the currency pairs depends on different factors which need to be analyzed fundamentally and technically. All the factors that can affect the prices of currency pairs need to be well understood before dealing with them.
The micro and macro-economic factors, geopolitical factors, inflation, and many more aspects of the countries need to be looked out before trading any currency.
Many newcomers in the market seek for the most volatile currency pairs to make quick returns or the ones that are traded the most or suggested by someone. Currency pairs in forex trading must only be selected after detailed inspection and analysis of price movement. Trading with unknown instruments without analysis or understanding is similar to gambling that includes a high risk of losing.
4. Leverage and Margin Trading
Leverage is a feature offered by forex brokers that allow traders to open bigger position with a smaller deposit. This allows them to gain high returns but if the price moves against the anticipation, the loss can be much severe.
In many situations, traders can lose all the deposited amounts due to high leverage. The amount required in the account to open a position is called margin money.
For example, a broker offers a leverage of 1:500 in Nigeria. To open a buy position on 1 standard lot (i.e., 100,000 units), the trader requires only $200. If the price moves up by 10 pips, profits will be $100 but if it moves down by 10 pips then the loss will be $100, which is 50% of your capital.
Some brokers offer negative balance protection in which positions are automatically closed if the account balance reaches zero. Trading with brokers that do not offer negative balance protection is riskier as the account balance can go in negative.
Higher leverage can increase profits with lower deposits but it also increases the risk factor exponentially. Leverage in forex trading should only be used with the proper understanding of its consequences, and you must never use more than 1:20 leverage on forex.
5. Trading Strategy and Planning
Forex trading requires planning and a lot of research. Experienced traders always follow a trading strategy and keep improvising it to increase success rates, and their wins when they are correct in their analysis.
Trading without a plan and strategy is similar to searching for treasure without a map. Trading without planning is gambling with very high risk due to leverage.
The analysis of forex price movement can be done fundamentally and technically. Using analysis techniques can provide better trading ideas and increase success rates in trading.
Traders in Nigeria should make a financial plan with a realistic objective and develop strategies that can help in achieving the objective. Most of the new traders unlike experienced traders lack the discipline to follow a particular trading strategy or plan.
Traders must remain emotionally strong and take decisions according to financial objectives and analytical judgment. Trading decisions driven by emotion or unsolicited advisory must be avoided.
You should not choose the broker or trading instrument just because your friend or a family member has chosen it.
6. Demo Account
The strategies can be developed and tested before implementation with real currency.
Most forex brokers and fintech websites offer a demo forex trading account where new as well as experienced traders can test their strategies with virtual currency.
These demo accounts are available for free and can also allow traders to know which market or instrument is good for them. The demo account can also help you learn & understand basic terminologies, use Risk management features like stop-loss, limit order, etc.
The risk involved in the capital markets and the possible amount that can be gained or lost can also be calculated.
By Adedapo Adesanya
Crude oil deliveries from the Nigerian National Petroleum Company (NNPC) Limited to the Dangote Petroleum Refinery doubled in March, boosting prospects for improved fuel availability.
This was revealed by the chief executive of Dangote Industries Limited, Mr Aliko Dangote, on Tuesday, when he received the Deputy Secretary-General of the United Nations, Mrs Amina Mohammed, at the industrial complex in Ibeju-Lekki, Lagos.
While speaking on feedstock supply, Mr Dangote commended the NNPC for increasing crude deliveries to the refinery in March, noting that volumes rose to 10 cargoes—six supplied in Naira and four in Dollars—to support domestic fuel availability, according to a statement by the Refinery.
“Last month, they gave us six cargoes for Naira and four cargoes for Dollars,” he said.
Despite the improvement, Mr Dangote noted that the supply remains below the 19 cargoes required for optimal operations, with the refinery continuing to bridge the gap through imports from the United States and other African producers.
He also expressed concern over the unwillingness of international oil companies operating in Nigeria to sell to the refinery, stating that their preference for selling crude to traders forces it to repurchase at higher costs, with broader implications for the economy.
Mr Dangote added that the refinery is seeking increased access to domestically priced crude under local currency arrangements as part of efforts to moderate fuel costs and enhance long-term energy and food security across the continent.
On her part, Mrs Mohammed underscored the strategic importance of Dangote Industries Limited -particularly Dangote Fertiliser Limited—in addressing Africa’s mounting food security challenges, while calling for stronger global partnerships to scale its impact.
Mrs Mohammed said the United Nations would prioritise amplifying scalable solutions capable of mitigating the continent’s food crisis, describing Dangote’s integrated industrial model as a critical pathway.
“I think the UN’s job here is to amplify and to put visibility on the possibilities of mitigating a food security crisis, and this is one of them,” she said. “I hope that when we go back, we can continue to engage partners and countries that should collaborate with Dangote Industries.”
By Aduragbemi Omiyale
The Securities and Exchange Commission (SEC) has approved a 50 per cent hike in the X-Alert service fee per transaction in the Nigerian capital market.
The X-Alert fee is a flat rate charged for sending real-time SMS/email notifications for transactions to investors from both buy and sell sides.
It was introduced by the Nigerian Exchange (NGX) to replace percentage-based charges, aimed at increasing transparency and reducing total transaction costs for investors.
Investors were earlier charged N4 per SMS, but the country’s apex capital market regulator has approved a 50 per cent increase in X-Alert service fee, meaning the new rate is N6 per SMS.
Business Post gathered from one of the players in the ecosystem that the effective date for the new price was Thursday, March 26, 2026.
“We wish to inform you of a revision to the X-Alert (SMS) service fee applicable to transactions executed on the Nigerian Exchange (NGX).
“Following approval by the Securities and Exchange Commission (SEC), the X-Alert fee has been reviewed upward from N4.00 to N6.00 per transaction,” the notice sighted by this newspaper read.
By Adedapo Adesanya
Nigeria’s economy is projected to remain resilient in the face of mounting global uncertainties, with the World Bank forecasting a 4.2 per cent growth rate in 2026.
However, the global lender has warned that rising fuel costs and persistent inflation, worsened by geopolitical tensions in the Middle East, could undermine household incomes and slow poverty reduction.
Speaking in Abuja, the bank’s lead economist for Nigeria, Mr Fiseha Haile, noted that while the ongoing US-Israel-Iran conflict has pushed up prices, overall economic activity has remained largely intact.
“Overall business activity has been expanding over the past few months, suggesting the impact on growth has been relatively contained. But the shock is still being felt through higher inflation,” Mr Haile said.
According to him, business activity has continued to expand in recent months, indicating that the broader impact on growth has been “relatively contained,” even as inflationary pressures intensify.
Nigeria’s inflation rate, though significantly reduced from around 33 per cent in December 2024 to 15.06 per cent in February 2026, remains elevated compared to regional peers.
“Inflation is still elevated and under increasing pressure, and that poses risks to incomes and poverty reduction,” Mr Haile said.
The renewed surge in fuel prices, reportedly rising by over 50 per cent during the Iran conflict, has had a ripple effect on transportation, food, and production costs, amplifying the cost-of-living crisis.
The World Bank urged Nigerian authorities to adopt prudent macroeconomic measures, including tightening monetary policy, avoiding blanket subsidies, and saving windfalls from higher oil prices to strengthen fiscal buffers.
It also recommended reconsidering restrictions on fuel imports as a potential tool to ease inflationary pressures.
The economic reforms under President Bola Tinubu — including the removal of fuel subsidies, exchange rate unification, and tax restructuring — were acknowledged as ambitious steps aimed at stabilising the economy.
These reforms have contributed to improved external buffers, with rising foreign exchange reserves and reduced volatility.
Additionally, Nigeria’s fiscal deficit stood at 3.1 per cent of GDP in 2025, while the debt-to-GDP ratio declined for the first time in a decade.
Yet, the World Bank cautioned that tighter global financial conditions could still pose risks to capital inflows, borrowing costs, and remittances.
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