Economy
Understanding Forex and Cryptocurrency Risks
The global financial market is no longer limited to banks and traditional assets. Today, investors move money between foreign exchange (forex) and cryptocurrencies. Both markets offer opportunities, but they also carry risks that need careful control.
Forex is the world’s largest financial market, trading more than $7.5 trillion a day, according to the Bank for International Settlements. Cryptocurrencies are smaller but far more volatile and less regulated. Investors who stay disciplined usually do better than those chasing fast profits.
Leverage and Market Exposure
In forex, one of the main risks is leverage. Brokers allow traders to open large positions with only a small deposit. This can increase profits, but also makes losses bigger. Even a price move of less than one percent can wipe out an account.
Crypto trading has similar dangers. Prices can fall by double digits in a single day. For this reason, stop-loss strategies are essential in both forex and crypto to avoid sudden, heavy losses.
Beginners who want extra guidance can turn to trusted trading guides for beginners, which explain how to manage risk, use leverage safely, and build a structured approach to trading.
Liquidity and Price Swings
Forex usually has high liquidity and fast execution. But during events like central bank decisions, political crises, or natural disasters, spreads can widen. This leads to higher trading costs.
Currencies also respond to interest rate changes. For example, when the US Federal Reserve raises rates, the dollar often strengthens and emerging market currencies weaken. Traders who ignore these cycles face unexpected risks.
Crypto markets face different liquidity problems. Bitcoin and Ethereum trade in large volumes, but many smaller coins lack depth. This makes it hard to exit positions quickly without big price losses.
Counterparty and Security Risks
Forex trading also carries counterparty risk. Regulated brokers protect client funds by keeping them separate from company money. Unregulated or offshore brokers may not do this, which puts investors at risk. Always check a broker’s licence before opening an account.
For crypto, the biggest issue is security. Wallets and exchanges are common targets for hackers. Billions have been lost through scams and breaches. Using cold storage, two-factor authentication, and strong passwords is critical for protecting funds.
Regulation and Government Policy
Forex has strong global oversight, with regulators in Europe, North America, and Asia setting clear rules. These create a safer environment for traders.
Crypto, on the other hand, is less predictable. Government actions such as tax rules, exchange bans, or restrictions often trigger sudden sell-offs. Traders who fail to follow regulatory updates can face heavy losses.
Risk Management Practices
Good risk management is central to long-term success. Traders should commit only a small part of their capital to each position. Stop-loss orders limit sudden shocks, while diversification across different assets reduces overall risk.
Ongoing learning is also critical. Monitoring central bank calendars, blockchain updates, and regulatory changes helps traders prepare for moves. Backtesting strategies and using demo accounts create extra layers of preparation. Nigerian traders can also find useful guidance in forex trading tips, which cover current trends and practical tools in the local market.
Practical Steps for Traders
To reduce risks, traders should:
- Use leverage with caution.
- Choose licensed and secure platforms.
- Expect high volatility in digital assets.
- Follow global economic indicators.
- Keep clear records of all trades.
Forex and crypto will continue to attract investors looking for growth and diversification. But both markets carry serious risks, from leverage and liquidity to regulation and security. Traders who stay disciplined, informed, and cautious have a better chance of building consistent results.
By Adedapo Adesanya
The federal government has imposed an immediate nationwide ban on the export of wood and allied products, revoking all previously issued licenses and permits to exporters.
The announcement was made on Wednesday by the Minister of Environment, Mr Balarabe Lawal, during the 18th meeting of the National Council on Environment in Katsina State.
Mr Lawal said the directive, outlined in the Presidential Executive Order titled Presidential Executive Order on the Prohibition of Exportation of Wood and Allied Products, 2025, became necessary to curb illegal logging and deforestation across the country.
“Nigeria’s forests are central to environmental sustainability, providing clean air and water, supporting livelihoods, conserving biodiversity, and mitigating the effects of climate change,” the Minister said, warning that the continued exportation of wood threatens these benefits and the long-term health of the environment.
The order, published in the Extraordinary Federal Republic of Nigeria Official Gazette No. 180, Vol. 112 of 16 October 2025, relies on Sections 17(2) and 20 of the 1999 Constitution (as amended), which empower the state to protect the environment, forests, and wildlife and prevent the exploitation of natural resources for private gain.
Under the new policy, security agencies and relevant ministries are expected to enforce a total clampdown on illegal logging activities nationwide.
On his part, the Katsina State Deputy Governor, Mr Faruk Lawal Jobe highlighted the state’s history of pioneering socio-economic policies that have influenced national policy. He emphasized the importance of collaboration in addressing environmental challenges across the country.
“Environmental sustainability is critical to achieving growth and improving the quality of life of our people,” he said. “Our administration has prioritised initiatives aimed at combating desertification and promoting afforestation.”
The ban reflects the government’s commitment to safeguarding Nigeria’s shrinking forest cover and addressing climate change, while ensuring sustainable use of natural resources for future generations.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.24 per cent on Wednesday, December 17, pulling the Unlisted Security Index (NSI) up by 8.62 points to 3,614.64 points from 3,606.02 points.
In the same vein, the market capitalisation added N4.72 billion to close at N2.164 billion compared with the N2.160 trillion it ended on Tuesday.
The growth was inspired by four securities, which finished on the gainers’ log, neutralising the losses printed by two other securities on the trading platform.
MRS Oil Plc gained N17.90 on Wednesday to end at N196.90 per unit versus N179.00 per unit, NASD Plc appreciated by 59 Kobo to N58.50 per share from N57.91 per share, FrieslandCampina Wamco Nigeria Plc added 15 Kobo to sell at N60.19 per unit versus N60.04 per unit, and Industrial and General Insurance (IGI) Plc rose by 6 Kobo to 64 Kobo per share from 58 Kobo per share.
On the flip side, Golden Capital Plc extended its loss by 76 Kobo to end at N7.75 per unit versus N8.51 per unit, and Central Securities Clearing System (CSCS) Plc slipped by 35 Kobo to N39.65 per share from N40.00 per share.
Yesterday, the volume of transactions increased by 737.3 per cent to 20.4 million units from 2.4 million units, but the value of trades fell by 33.8 per cent to N72.2 million from N109.1 million, and the number of deals slid by 62.5 per cent to 21 deals from 56 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value on a year-to-date basis with 5.8 billion units sold for N16.4 billion, the second position was occupied by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and the third place was taken by MRS Oil Plc with 36.1 million units worth N4.9 billion.
InfraCredit Plc was also the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, followed by IGI Plc with 1.2 billion units valued at N420.7 million, and Impresit Bakolori Plc with 536.9 million units worth N524.9 million.
By Dipo Olowookere
A 0.26 per cent growth was achieved by the Nigerian Exchange (NGX) Limited on Wednesday on the back of sustained bargain-hunting by investors.
This happened despite a pocket of profit-taking, with industrial goods losing 0.63 per cent and the energy index shedding 0.05 per cent.
But the insurance space increased by 2.02 per cent, the banking counter appreciated by 1.48 per cent, the commodity sector improved by 0.48 per cent, and the consumer goods segment rose by 0.03 per cent.
Consequently, the All-Share Index (ASI) went up by 383.71 points to 149,842.82 points from 149,459.11 points and the market capitalisation jumped by N244 billion to N95.525 trillion from N95.281 trillion.
The market breadth index remained positive after the bourse finished with 38 price gainers and 23 price losers, indicating a strong investor sentiment.
The quartet of First Holdco, Lasaco Assurance, Veritas Kapital, and Prestige Assurance gained 10.00 per cent to quote at N39.60, N2.75, N1.76, and N1.65, respectively, while Mecure Industries grew by 9.92 per cent to N50.40.
Conversely, Living Trust Mortgage Bank lost 10.00 per cent to close at N3.15, International Energy Insurance dropped 9.92 per cent to trade at N2.27, McNichols shrank by 6.90 per cent to N2.97, Omatek decreased by 6.84 per cent to N1.09, and Chams dipped by 6.41 per cent to N2.92.
The activity level witnessed a significant surge at midweek, with Ecobank trading 5.3 billion units for N168.7 billion.
Further, First Holdco sold 108.2 million units worth N4.2 billion, Sterling Holdings exchanged 87.3 million units valued at N606.2 million, FCMB transacted 74.3 million units worth N783.6 million, and Access Holdings sold 41.5 million units for N841.4 million.
At the close of trades, market participants traded 5.9 billion units valued at N216.2 billion in 25,205 deals compared with the 1.0 billion units worth N21.8 billion traded in 23,701 deals a day earlier, showing a rise in the trading volume, value, and number of deals by 490.00 per cent, 891.74 per cent, and 6.35 per cent, respectively.
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