Forex Trading in Nigeria

Forex Trading in Nigeria

I just did a trend research on Google and was surprised to discovered that Forex Trading In Nigeria is growing steadily. If you check the following link, Google Trend, you’ll discover that Lagos Nigeria tops the chart for searches for the term Forex. A flip through the blogosphere also reveal that there are many Nigerian bloggers writing on how to make money from forex trading.

I was particularly touched by a warning post made by the blogger Nigerian Entrepreneur. Unlike others, he was out with a warning that Nigeria is not ripe for Online Forex Trading, you can read his views in the following link, Forex Trading in Nigeria, who is making the money. Of course many other Nigerian bloggers are of contrary opinion and some commenters on NaijaEcash blog points out pertinent issues that makes Forex Trading a viable online business for Nigerian Entrpereneurs.

Is Forex Trading for Nigerians?

The answer is yes. Anyone anywhere in the world can successfully trade forex. All it takes is the right knowledge and a strong determination to succeed at it. However, I agree with Nigerian Entrepreneur that it is not a feat to be achieved overnight.
There are several stages that a Forex Trader will have to pass through before he or she can become an experienced or successful forex trader.

The Novice Forex Trader

At this stage the new trader is simply fascinated by the idea of making some fast cash by trading Forex. He has been convinced by internet marketers or close friends that it is the way out of cash crunch. He has only gotten lured by the success stories. Nobody has taken time to tell him that for every Fx success story he hears there are possibly thousands sad stories of forex trading failures. He is probably practicing with a demo fx account and getting all excited about how simple the whole foreign exchange market system seems.

The Trainee Forex Trader

At this stage, he has gotten convinced enough to start trading with a live Forex account. He commits small cash and watch as the market fluctuates. At this stage he is either luck to make an initial success which further encourages him to go deeper into Forex Trading or he makes some bad decisions which land him into some losses. Either way, his mentor and friends are there telling him that things will definitely get better because he can always turn around his initial loss. The truth is, he has started to realize that Forex Trading like any other business requires hard work.

The Junior Forex Trader

At this stage he has come to understand that he needed to acquire certain trading skills and get himself more educated on how the fx market works. He starts making research online and reading tutorials on Forex Trading. At this stage, the trader is prone to trying out different fx trading system trying to discover the one that actually works. Every new trading method promises a better result and he wants to try it out. As at this stage, he will become familiar with the myriads of automated forex trading systems available, Alpari, FabTurbo, f9d1, etc. Terms such as moving averages, Fibonacci lines, support and resistance, pivots, fractals, divergence etc will continually ring in his mind all day long. Welcome to reality.

The feeling that he is not experienced enough to make constant profit will probably send him to forum and online forex communities to seek out other forex traders that may have suggestions that will help him out. Often times, their claims of success and prescribed methodology will terribly clash with the Forex Tutorial ebooks and manuals he has been studying. This stage is where most of the new entrants into Online Forex Trading calls it quit. The probability of him quitting at this stage is high, because, while others are claiming that they are making so much money, his trading account is testifying that he is either doing it wrong or those guys are liars. How long he remains in this stage is highly dependent on how soon he figures things out.

The Senior Forex Trader

At this stage, he has acquired sufficient knowledge to understand that there are two types of factors that determine who succeed in Forex Trading. The first set of factors are controllable because they have to do with the fx trader. However the second set of factors are uncontrollable because they are purely determined by market factors and economies of the nations whose currency are being traded.

So, the forex trader settles down to master how he can control to a large extent those factors he has control over. e.g. his decision to buy, hold or sell! He has come to realize that emotions have no business in forex trading and others opinion are not to be taking without crosschecking. He will be developing and testing his own unique system of trading forex. He is no longer depending on other’s forecast or predicted market signals. As his trading system produces both positive and negative results, he will be more interested in fine tuning the efficiency of the system than abandoning it for others magic trading system.

The Master Forex Trader

Only very few gets to this stage. The master forex traders is a professional who has come to rely more on fx trading system he personally developed and has tested severally over the years. He understand the fact that no human being can accurately predict the forex market. The best anyone can do is to make a guided forecast of future events in the fx market.

He has his own definition of what risk he is willing to take and what is outside his bound of trading. He is not moved by noise in the forex market by so called experts who prey on the ignorant newbies to make money instead of profiting from real forex trading. He doesn’t win all the time but his losses are within bound and he doesn’t get angry when his decision turns out to be faulty. Instead, he takes time to discover where he went wrong. He doesn’t judge his trading system by one trade but looks at periodic portfolio performance to determine if his forex trading system is getting more wins than losses.

He is highly educated in money management and his forex trading portofolio is handled with utmost carefulness. Every trade is giving a good analysis and he closes a bad trade as soon as he realize he has made a mistake. He knows that subsequent trades will turn out well because he has a fx trading system that is reliable.

Make a choice now!

Having read till this point, I guess you’ve already identify where you fall-in within the five stages. Now you’ve got to make a choice. You either quit or get ready to move to the next stage in your quest for forex mastery. Nothing good in life comes cheap anyway. Don’t get deceived by those con-artists that promise to make you a master forex trader overnight. If they know how to trade forex like they claim, their name will be in the Forbes. Settle down and start learning how forex trading works. This site, Forex Trading Tutor is here to help you with free tips and there are many free resources to help you in your quest to become a Master Forex Trader. You can get free future updates to this posts, Forex Trading in Nigeria by subscribing to our RSS.

What is Forex?

What is Forex? Forex is an acronym formed from the phrase FOReign EXchange. The acronym sometimes is further abbreviated to FX. Foreign exchange can be translated to mean several things. But for the purpose of this tutorial, it simply refers to buying and selling currencies of different countries. For example if you give 100US dollar in exchange for 90Euro you have just sold USD and bought EURO. People that engage in physical exchange of currencies are often refer to as Beure de exchange. Well, that is not what we are interested in. We are interested in selling and buying foreign currencies online.

So as webpreneurs, Online Forex Trading is actually the most appropriate term we ought to be using. Online Forex trading is the act of buying and selling different currencies with the intention of making profit. How does the profit come? It comes from the period fluctuations in the value of currencies being traded. For example if you buy $100 at 90Euro but later converted the same 90Euro back to $150, you have made a profit of $50 (this is over simplification and only meant to aid understanding, it is more complex than I just stated).

How does forex trading work?

For you to trade Forex online, you need a foreign exchange currency account for the business. Managing such an account on your own will require so much education and resources, so it is better if you employ the service of specialists that are referred to as Forex Brokers or Market Makers. Many of them offer free account for new traders. Some even provide demo accounts that you can use to learn how the market operates.

As a forex trader you will be required to choose a currency pair that you want to trade. For example, assuming you decided to trade USDollar against the European Euro, you can use $100 to purchase 90Euro at the beginning of the month and give instruction to your broker to sell same at the end of the month. If the 90Euro is sold for $120 then you have made a profit of $20. However, if it is sold for $90 then you have lost $10.

Forex trades can be placed online through a broker. Orders are usually placed with just a few clicks and the broker then passes the order along to a partner in the Interbank Market to execute your instruction. You close your trade when you instruct that the currencies be sold and the proceed from the sale be credited back to your account. When you close your trade, the broker closes the position on the Interbank Market and credits your account with the loss or gain. How often you choose to close your trade is entirely dependent on you. Technology has made it possible for all this instructions to be executed with lightning speed.

The foreign currency market is highly volatile and can be quite unpredictable sometimes. You should understand that as in any other business, there are risks. For you to make profit trading Forex Online, you must acquire experience and learn to really understand how the market works. Even though there are resources to help you achieve your goal as a trader, there are no absolute guarantee. If you assume that you can wave a magical wand and become successful overnight, you are in for a very rude shock.

The purpose of this website is to assist you in acquiring the necessary experience that will aid your success as an online forex trader.

Benefits of Trading Forex Online

1. Low startup capital

You don’t need a huge amount of money to start trading forex. You can start with as low as $50 dollars and grow your account. Actually, it is advisable to start with fund you are willing to loose without crying.

2. The market is open always.

The forex market is worldwide therefore it is not tied to the day time of any particular country. Trading is continuous as long as there is a market open anywhere in the world. Technically, trading starts when the foreign currencies markets open in Australia on Sunday evening, and ends after forex markets close in New York on Friday.

3. Low Transaction Cost

In online forex trading, the cost for a transaction is built into the price. So you can easily estimate what your cost is. The transaction cost is called the spread. Technically this is the difference between the buying and selling price of the currencies.

4. High Liquidity – Easy to Cash

You can easily convert your account balance to cash whenever you have need. You can easily move money from and into your account without much Liquidity is the ability of an asset to be converted into cash quickly and without any price discount. In forex this means we can move large amounts of money into and out of foreign currency with minimal price movement.

5. Leverage (Trading With Borrowed Fund)

Some Forex Brokers allow their traders to trade the market using borrowed funds. This gives the trader the ability to use more fund than he has in his account to trade in the market. For example, a trader who is giving a 20:1 leverage will be able to control trade worth $20,000 even when his account balance is just $1,000. What is given as leverage differs from one broker to another and sometimes the experience of the trader is also considered.

6. Unlimited and Unrestricted Profit Potential from Rising and Falling Currencies Value

The forex market has no restrictions for trading. You are free to make as much profit as you can. There are no limitations to what profit you can earn from trading online. Also, the foreign currency market operates outside the jurisdiction of individual countries.

Conclusion
Forex Trading is one of the ways that people are making legitimate money online. However, it is an online business that requires much learning and hardwork from an entrepreneur. You can bookmark this page or subscribe to my RSS feed so that you will not miss subsequent updates to this post about Forex.