Nigeria is Surging in Forex Traders

Nigeria is one of those African countries that are driving the frontiers of the foreign exchange market (Forex, FX) trading. It has become widely popular among its citizens and a lot of people are starting to generate income from trading daily. But the surge is visible not only by society but by the statistics as well. Nigerian traders currently hold as much as $1.25 million in their trading positions.

A recent report that has been released by one of the forex research firms has estimated that Nigeria’s forex traders are holding $1.25 million dollars in their trading positions. This is a huge volume to be traded daily considering how other countries are faring in this economic climate. Forex trading is not something people have working hours for. The platforms are open 24 hours 5 and a half days a week. This gives an immense amount of flexibility to everyone interested in this field. People can do trading as their main income, or work full-time and do it in the evenings. There are no opening or closing hours and thus there is no rush anywhere, apart from opening and closing positions because that’s what generates the money for traders. The options are absolutely up to the person. They can be on the bullish side trading aggressively or taking their time and passively work whenever they see fit. Otherwise, it is “choose your own schedule” type of deal. However, it is still considered to be a risky endeavor and one should never trade with what they need to get by during the month.

In terms, the scrutiny that the foreign exchange market is going through on a daily basis due to the fact that the whole point of FX is still considered to be short-term high-risk price speculation. These fears are justified to an extent but this doesn’t mean one shouldn’t try. People who excel at such activities are the ones that make money. Those who are doing, well, to be fair it’s the law of the jungle there. Either you are good at it and you make money or you overestimate your own abilities and knowledge and lose. However, it is not to say that everything can be calculated. However, this is not to say that everyone has their own unique strategy. If you are a new trader start by using fundamental analysis for trading that will decrease risks of losing your investment substantially. Going through such an ordeal with a lighthearted attitude is not going to lead you anywhere.

Trading in general, whether it is forex, cryptocurrency, stocks, commodities, or anything else is still based on luck. Unfortunately, humans do not have the foresight to see into the future and thus every opening and closing of trade is more or less a coin flip. What knowledge of the subject, as well as cunning and intelligence, adds to the trader is the reduction of risks but never elimination as a whole. Trading allows interested parties to gain some revenue from different currency pair trades. This means that people are buying currency pairs and then sell it when the price surge happens to make that small difference that they put their money on at the start of the trade. This may or may not happen. Forex is influenced by loads of factors that make or break things as they go.

A lot of people in these times of crisis are working hard on diversifying their asset classes. The coronavirus pandemic has hit hard and took a huge toll on the financial situations of everyday citizens all across the world. Even people living in developed countries with strong governments and financial policies are struggling to get by due to on-going lockdowns and social distancing laws or rules depending on the country we are talking about. The idea is quite simple. The surge can be largely attributed to the fact that a lot of people have lost their means of income due to the shutdown of the whole industries they were employed in. The coronavirus pandemic made sure that the whole spring and summer of 2020 are lost for tourist companies. International transportation is also being hit hard with airlines reporting incredible losses due to the fact that the airspace is locked down tight for everyone. There are no people traveling which means that there is no need for planes, trains, cars, yachts, or any other means of transportation.

Why Is FX Trading Becoming Popular in Nigeria?

Recently the head of Capital Markets in TRW Stockbrokers Ltd has been interviewed and asked this very same question. Mr. Abdul-Rasheed Oshoma Momoh is a veteran forex trader and extremely successful investor. He broke down some of the most important aspects that have led to such a surge in popularity for forex trading in Nigeria.

Accessibility

In the interview, he outlines the most valuable moves that every trader should be looking out for. He stated that trading FX is one of the most rewarding methods for investors to make revenue. This is why it is extremely important to choose what and when you are going to be trading. Forex offers the highest amount of leverage on trades in comparison to other financial markets. The trading accounts can differ as well from small to large depending on the amount of investment a trader is willing to make. An increase in leverage means that one can trade with higher amounts of money than initially invested. However, the risk is that any move against you may result in significant losses as well. This means that traders need to have proper risk management policies in place. The need for smaller amounts of the initial investment is what draws a lot of Nigerians into this fray. People come from underdeveloped countries with not much on their stake except for whatever they can scrap. Forex allows Nigerians to make such revenue that most of the daily jobs in the country wouldn’t even get close to.

Easy Trades

Trading on the foreign exchange market is not complicated, mechanically speaking. The idea is that the systems at hand can be learned by anyone anywhere without the need for in-depth knowledge of computers. The fact that trades can be done with one click of a mouse is something a lot of people get behind. Therefore, an ability to buy and sell at anytime that is convenient is a huge draw for individuals in Nigeria. If someone is a bullish trader they can quite easily go for a long time selling Nigerian Naira and buying United States Dollar. In comparison to this, the equities market has set boundaries where you are allowed to short-sell during the uptick.

Transaction Costs

It goes without saying that transactions are completed using the over-the-counter methodology. Traders are directly dealing with market makers and participants like banks, hedge funds, and other financial institutions.

Due to this, there are no extra fees that are piling upon every transaction the trader wants to make. This is something that sets forex apart from stocks, ETFs, or even bonds. More than usually market makers do not charge any fees for currency trades that are made on their trading platforms.

Regulations

What sets FX trading in Nigeria apart from most of the other developed parts of the world is the absence of regulations. Forex trading is still unregulated in Nigeria and a lot of people are utilizing this to make as much revenue as possible. This means that they are not taxed for this income. In comparison to this Nigerian stock market is regulated where local stocks cannot move either way up nor down beyond 10% of its present value.