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How to Start Forex Trading in Nigeria

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Forex trading in Nigeria

Forex trading is no longer a term used exclusively by banks where it was used by them to make money for themselves. Forex trading is now a viable option for every individual who wants to earn money from it.

The internet has brought in a new wave of investors in this type of trading. Individuals can now trade with as little as $100 that too right from the comfort of their bedroom.

A physical location is no longer a barrier. This becomes all the more vital during the pandemic wherein people have lost their jobs and are now looking for opportunities to work from home to make a living.

If you are new to forex and are looking for trading in the same from Nigeria, below mentioned are some tips to help you get started.

Understanding Forex Trading

The online currency exchange trade of buying and selling currencies from different countries is called forex trading. The economic condition of that particular country that you want to trade in plays an important role. This is because the economic condition is never static, therefore, the forex market is never stagnant at any given time. You have to be alert and trade when the currency goes up and refrain from trading when it goes down. Prepare yourself with some serious training about forex trading and markets.

Find A Reputable Broker

After you have got a grasp on how everything works, the next step is the most vital one. You will have to search from a list of forex brokers in Nigeria to find one that you can work with. You must be careful before finalizing one.

A broker that is not online is an absolute no-no. The online ones must be reputable and have the necessary license to prove that they are properly regulated. They must also have enough capital funds to support you. Their website should have all the necessary features to make your trading easier. The website should also be friendly with all gadgets so you don’t skip any important update and can access it from your mobile phone if the need be.

Start With A Demo Account

Once you know in theory all that is necessary, the next step is to apply it practically. While you may still be new to the concepts, creating a demo account will be helpful.

Many online broker platforms provide users with a chance to create a demo account free of charge. With this account, you will be able to practice what you learned in theory in an environment that looks like real-time trading.

The accounts have virtual money that you can trade with. This will give you an idea of how to use your funds wisely to make profits and avoid losses. You will, however, make no real profits or losses when you use the demo account.

Attention To Details

You should be sharp when you are trading in the forex market. This starts when you are opening your account itself. Check if the signup process is easier. If the initial investment is too high then refrain from signing up.

Also, check to see if the broker platform has given all the details of the costs involved. Some trades are costlier than others and you may end up paying more fees for trading than the actual amount of money you make. Make sure the website is legit as you will be disclosing sensitive information like your passport copy, credit card details, and so on. When this data goes into the wrong hands, you could face a lot of losses for a long time.

Trade Methodically

There are many online tutorials and TV shows wherein how to trade in the forex market is expansively discussed. Practice your due diligence and find your own methods and techniques. Do not be lured by every piece of advice.

There are no hard ad fast rules that work the same for everyone. Limit your daily trades. There are many people who are making lots of money from forex trading in Nigeria but it all depends on their skills. You have to learn and enhance your skills at the same time to be able to make the same numbers.

Know Your Limits

start Forex trading

Sometimes when you make a small profit, you may be tempted to reinvest it continuously. Know your limits and learn when you need to stop. You don’t have to rush into everything. Sometimes the stock may appear like a good investment but may actually be preparing for a plummet. So be careful and take your time when you trade.

Dipo Olowookere is a journalist based in Nigeria that has passion for reporting business news stories. At his leisure time, he watches football and supports 3SC of Ibadan. Mr Olowookere can be reached via dipo.olowookere@businesspost.ng

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Economy

Nigerian Exchange Rises 0.23% as Investors Mop up Bank Stocks

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Nigerian Exchange 1

By Dipo Olowookere

The Nigerian Exchange (NGX) Limited extended its gains on Friday with a 0.23 per cent growth on the back of a sustained interest in bank stocks.

Business Post observed that investors mopped up equities of tier-one lenders yesterday and this buying pressure further lifted the All-Share Index (ASI) of the exchange by 88.15 points to 38,962.28 points from the previous day’s 38,874.13 and pushed the market capitalisation higher by N46 billion to N20.300 trillion from N20.254 trillion.

The market breadth was positive during the session as there were 25 price gainers and 11 price losers, indicating a positive investor sentiment.

Pharma Deko topped the gainers’ chart after its equity price went up by 9.74 per cent to N2.14. Sovereign Trust Insurance grew by 8.70 per cent to 25 kobo, Okomu Oil rose by 5.77 per cent to N110.00, Eterna appreciated by 4.95 per cent to N7.00, while Champion Breweries moved up by 4.71 per cent to N2.00.

On the reverse side, SCOA Nigeria topped the log with a price decline of 9.38 per cent to settle at 87 kobo. Presco went down by 8.18 per cent to N73.00, Regency Alliance fell by 6.38 per cent to 44 kobo, Total Energies depreciated by 3.61 per cent to N192.00, while Sterling Bank depleted by 1.34 per cent to N1.47.

A look at the performance of the five key sectors of the market showed that the banking space closed 1.86 per cent higher, the insurance sector rose by 0.27 per cent, the consumer goods counter appreciated by 0.06 per cent, while the energy index grew by 0.04 per cent, with the industrial goods sector closing flat.

The most traded stock on Friday was FBN Holdings as investors exchanged 481.5 million units valued at N3.6 billion.

Ecobank traded 16.6 million units worth N87.8 million, Zenith Bank transacted 12.0 million units valued at N279.0 million, Access Bank exchanged 11.6 million units worth N100.9 million, while Transcorp sold 9.4 million units for N8.7 million.

At the close of business, a total of 633.5 million shares worth N6.5 billion were traded in 3,228 deals as against the 125.8 million shares worth N1.3 billion transacted in 2,990 deals on Thursday, indicating a 403.61 per cent rise in the trading volume, a 409.36 per cent growth in the trading value and a 7.96 per cent jump in the number of deals.

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Economy

FX Demand Pressure Crashes Naira by N1.22 at I&E

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Nigerian Naira

By Adedapo Adesanya

The Naira came under immense pressure on Friday against the United States Dollar at the Investors and Exporters (I&E) segment of the foreign exchange (FX) market as more customers approach the banks for their forex needs.

The Central Bank of Nigeria (CBN) had informed FX users to stop patronising traders at the unregulated segment of the market and use the I&E window for their forex transactions.

But it seems the traders at the official window are battling with FX supply as the demand pressure is taking its toll on the local currency, according to its performance yesterday.

Business Post reports that the domestic currency depreciated against the greenback on Friday by N1.22 or 0.30 per cent to close at N414.90/$1 compared with N413.68/$1 it was traded on Thursday.

It was observed that during the session, the value of trades increased by 10.1 per cent or $17.71 million to $193.59 million from the previous day’s $175.86 million.

At the interbank segment of the market, the value of the indigenous currency also depreciated by 3 kobo to settle at N410.70/$1 in contrast to N410.67/$1 it traded at the preceding session.

As for the digital currency market, there was a downward movement in eight of the 10 tokens monitored by this newspaper yesterday as only the duo of Cardano (ADA) and the United States Dollar Tether (USDT) appreciated at the market by 1.2 per cent and 0.1 per cent respectively to settle at N1,374.04 and N576.01 apiece.

On the other hand, Ethereum (ETH) went down by 7.6 per cent to sell at N1,713,900.99, Litecoin (LTC) dipped by 6.6 per cent to trade at N86,848.72, while Dash (DASH) fell by 5.8 per cent to N97,992.14.

Also, Tron (TRX) declined by 3.9 per cent to finish at N53.39, Ripple (XRP) lost 3 per cent to trade at N559.99 Dogecoin (DOGE) depreciated by 2.4 per cent to trade N125.90, while Bitcoin (BTC) reduced by 1.9 per cent to close at N24,809,058.00.

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Economy

Brent Climbs Above $78 as Supply Tightens

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Brent Price

By Adedapo Adesanya

Brent crude oil rose above $78 a barrel on Friday, precisely to $78.09 per barrel after it appreciated by 1.09 per cent or 84 cents as global output disruptions forced energy companies to pull out large amounts of crude inventories.

Also during the session, the price of the United States West Texas Intermediate (WTI) crude futures improved by 0.63 per cent or 93 cents to finish at $73.98 per barrel.

The Brent posted its highest value since October 2018, while the WTI since July 2021.

It was also the third week of gains for Brent and the fifth for WTI mostly due to US Gulf Coast output disruptions from Hurricane Ida in late August.

The market has been bullish since news of US crude stocks dropped to their lowest since October 2018 and the broader market received more clarity about the US Federal Reserve next policy moves.

After the US Fed signalled that it could begin tapering asset purchases as soon as November and potentially start raising interest rates as soon as next year, oil market participants turned their focus to global oil inventories, especially those in the United States.

The aftermath of Hurricane Ida is still curtailing oil production in the world’s largest producer, with 16 per cent of crude oil production in the Gulf of Mexico still offline, according to the latest data from the country’s Bureau of Safety and Environmental Enforcement (BSEE).

The market also gained as US oil refiners were hunting to replace Gulf crude, turning to Iraqi and Canadian oil while Asian buyers have been pursuing Middle Eastern and Russian grades, analysts and traders said.

Positives from one of the world’s biggest exporters, India helped the market as crude imports rose to a three-month peak in August, rebounding from July’s near one-year low.

And the fact that some members of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) have struggled to raise output due to under-investment or maintenance delays during the pandemic also added to the bullish sentiment.

Iran, which wants to export more oil, said it will return to talks on resuming compliance with the 2015 Iran nuclear deal very soon, but gave no specific date. The return of Iranian oil may be damaging to the market since it is exempted from OPEC cuts.

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