Things to consider when Forex trading in Nigeria
Forex trading is on the rise throughout the world, but it is also especially quickly growing in some of the African countries that have had the good fortune of relative prosperity in the 2010s. In this case, we are going to be talking about Nigeria, and how to start Forex trading in Nigeria, while trying to avoid getting scammed. The recent developments in terms of economic changes within the country might make many wonders why the locals would start trading on such a massive scale, but in all honesty, the math is not as complicated as some of you might think. Nigeria went through a stage of fast economic growth in the early 2010s. During this time a large number of people got access to one of the key items required in order to successfully participate in the industry: the internet. Once they had access, many people found that they could do things that previously they could not. One of these was to effectively apply their disposable income (which had recently swelled in size) in ways that could cause them to have some alternative means of income. While there were those who went about founding businesses and investing, there were others who looked into more active trades. One of these active trades was Forex trading, which quickly became quite popular with the locals.
Although, after the period of growth, which was enjoyed by many, something changed and the Nigerian economy started faltering once again. Many people lost jobs and did not have a source of steady income again. These people found that with access to the internet, the correct mindset and the tools that the Forex brokers in Nigeria provide, they could turn to trade into a good source of daily income. As a result, even more, people ended up starting to trade with local and internationally licensed Forex brokers. Today, Nigeria has a strong base of traders in the country mostly because the people who were moderately successful in the years of growth have not been able to transfer their wealth into trading. These people have stuck to their guns and, as a result, have managed to become relatively successful themselves.
The thing with Forex trading in Nigeria, or anywhere else in the world, is that there is a possibility that you can be extremely successful at it. But to be so, you have to do certain things. These are the things we are going to be discussing within the article. But first, before we get into the details of the industry of Forex trading in Nigeria, we need to mention commitment. Commitment is probably the most important aspect of trading Forex. If you do not commit the time required to make the right decisions, learning about understanding the trade, you will not be able to trade successfully. if you give up after losing the first dollar, you will end up not trading successfully. It is important to stick to the industry and keep trading, in order to be able to make a living off of it. One month and even one year might not be enough to be able to become rich off of the industry. So, before you start learning about Forex, make sure you are willing to take all of the mental punishment and toll that comes with the stress of trading on the markets. Only those who understand the potential of the markets and only those who are willing to keep working on it will be able to make the money needed to quit their job or stop going to school. Success is not easy anywhere.
Picking a broker
One of the most important things you will do when starting to trade is picking a broker. Finding one of the best Nigerian Forex brokers is not a complicated thing to do – you can simply look at the list below. But the way we got around the arranging this list was what is complicated. We looked at a whole lot of things to understand whether a broker deserves to be considered as one of the best, such as the licenses they carry, what kind of platforms they offer their users, as well as other little details that you might forget when trying to pick the broker you will be trading with. Below you will see a list of brokers that we highly recommend trading with. These guys check off all of the positive boxes that we require a broker to fulfil, so you would know that they are really nice.
Who are the best Forex brokers in Nigeria 2021
XM
Starting capital
$5
Licensed by
FCA, CySEC
Extra feature
$30
Gearing up to
1:1000
Founded in
2009
Software
MT4, MT5,
AvaTrade
Starting capital
100 USD
Licensed by
CySEC, ASIC, FSCA, FFAJ, FRSA, SSA
Extra feature
Gearing up to
400:1
Founded in
2006
Software
MT4, MT5, WebTrader, custom
IQ Option
Starting capital
$10
Licensed by
CySEC
Extra feature
N/A
Gearing up to
25:1
Founded in
2014
Software
Custom
FXRoad
Starting capital
250 EUR
Licensed by
FSA, Seychelles
Extra feature
N/A
Gearing up to
1:200
Founded in
Unknown
Software
FXRoad web and mobile trader
You might have noticed that the list of the best brokers in Nigeria up there contains many brokers that are not necessarily originating from Nigeria. These are international companies that are licensed to operate within the country. These international brokers in Nigeria offer a number of things that the locals are unable to offer. Specifically, these guys provide the chance to trade with certain bonuses, competitions and opportunities that you do not necessarily get with a smaller scale, local broker. These include no deposit bonuses, competitions and other bonus opportunities that make trading on the markets that much easier, that much more fun and that much more profitable. Furthermore, some of them have provided access to technology, indexes and platforms that you would not necessarily have access to locally. This is why we recommend considering them to be your main brokers.
But simply giving you a list of brokers to pick from is not doing you the service that you need in order to become a successful trader. Just like you should be able to pick a good broker, you need to learn to identify scam brokers in Nigeria so that you can avoid them. After that, you need to learn to make the choice between the good brokers and build your own preferences. Specifically, you need to be able to know why you want to trade with a broker. Do they have certain qualities that make them more attractive? Platforms, withdrawal techniques, fees, currency pairs all should be decisive aspects in your quest to decide whether you want to start trading with a broker or not.
Identifying and avoiding Forex scams in Nigeria
Some scams are better than others, but all of them are well enough crafted that somebody might end up failing for them. Which is why they have been so successful in their operations in Nigeria and around the world. But, as much as it can be hard to tell whether something is a scam or not, there are certain tell-tale qualities that identify a scam for what it is. In order to find out whether a Forex broker in Nigeria is a scam, you can look at the checklist of things below and apply them to whoever you are looking at, in order to be able to tell.
- Presence of a license
- One of the most important tells you will be able to use is the presence of a license. If a broker has a license from a regulatory body, then it is much less likely to be a scam. The thing is, the license has to be from the regulatory body that has jurisdiction in your country. The license in Nigeria should be from SEC Nigeria, which is the regulatory body in the country. If the license is not from here, we recommend you avoid the broker altogether.
- History of the company
- It is important to consider how long the Nigerian broker has been working within the borders of the country and what the track record up to this point has been. If the broker is too young, or if the broker has been known to break rules and try to get their money’s worth through illegal means, it is best to consider the broker a scam and avoid them at all costs. This way, you can be sure that the broker won’t be doing this same thing and you doing your Forex trading in Nigeria will not lose money to a scammer.
- Reviews
- One of the most reliable sources of information about the broker will be the reviews they get online. the reliability does not come from the fact that every review is honest, quite the opposite. If there are Nigerian Forex broker reviews available online, and the reviews just don’t go into detail, or they are two-word user reviews that say “oh they’re great” you should be suspicious. If the broker reviews are a bit more in depth and have reasons for why they are saying what they are saying, then you should take them as a good source of info. Although, apply logic and remember that sometimes reviews are not written for your benefit.
- Additional details
- There are other things that you should be considering when starting to trade with a broker. These things include whether they charge a fee per transaction or whether they offer a platform that is actually useable and useful to you. Any detail that seems suspicious, is a good reason to refuse to work with a broker and to keep your savings safe from scammers.
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The list above is incomplete and imperfect, but it serves to show certain things. The most important of these things is the fact that the most important thing you can be doing when trying to pick a broker is thinking critically. Apply your observation skills and analyze what the brokers are offering. This is what will allow you to see whether the brokers are scammers and furthermore allow you to identify the brokers that you do want to trade with among all of the best Nigeria Forex brokers. Critical thinking is the most important skill that a trader can have, in order to be able to successfully perform in the markets, if you do not have this skill, you need to work on getting it, otherwise, you are going to lose a lot of money.
SEC Nigeria
SEC Nigeria is the local regulatory body that controls who and when receives the license to operate in the Nigerian borders as a broker. The SEC is modelled after a number of other organizations that have been around the world. The SEC was founded in 1979 and assumed control of licensing retail Forex brokers the moment retail trading started becoming more and more popular within the Nigerian country. The SEC has been doing a rather good job of controlling the market and who enters the markets and what kind of services they offer. they have been protecting the general populace from different types of scammers for many years, successfully. The SEC is one of the stricter regulatory bodies on the continent, that imposes their rules with efficiency and strictness. While the rules might have to be updated sooner rather than later, whatever they have right now has been doing a good job of controlling the brokers in the country. The licensed Nigerian Forex brokers can thus be relied on to be good, while those that do not hold the licenses are more likely to be scams.
There are some international companies that will say they do not need a license from SEC Nigeria in order to be reliable, but that is not true. If you end up working with a broker that does not have a Nigerian license but has an international one, you are likely to lose money without being able to sue the company. The legal jurisdiction of the Nigerian regulatory body does not cover international companies that they do not license to operate. So, stay away from them unless you want to get yourself into a bit of trouble.
An example of a Nigerian Forex Scam
The scam we are discussing is also the one that gets used the most often around the world. A couple of students from the Obafemi Awolowo University ended up receiving a number of people into depositing money with them. They promised that they were one of the licensed Forex trading companies in Nigeria and promised that every month they would provide a 20% return on the deposit that the investor would send them. They said they were doing this by trading on the markets themselves. This resulted in more than 3000 people depositing with them since 2015 until the fraud was discovered. All of the money that had been deposited was already sent into offshore bank accounts, so nobody was able to get their money back, but at least the two men were arrested.
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While this is one of the more recent and bigger scams, there have been other, smaller ones that are still operating. Learning to avoid them will help you avoid a situation where you end up losing a whole lot of money. Being careful will allow you to be a better trader.
Currency pairs, platforms and fees
One more thing that you have to consider before choosing a broker, is what they have to offer. If you want the best Forex trading platforms in Nigeria, you need to look for it, as the best trading platform is not objectively available. There are a number of platforms that all work for specific traders. Furthermore, there are currency pairs and certain fees that come with trading that you will have to consider in order to be able to pick a broker that will lead you to your success. Avoid high fees that are there just to make you pay and try to have as many of your favourite currency pairs as possible so that your trading can be exactly what you want it to be. Be careful to avoid websites that are terribly designed and make sure that the Nigeria broker that you are trading with is actually licensed. Now, let’s move on to how to start trading Forex in Nigeria successfully.
How to trade Forex in Nigeria or anywhere else in the world
There isn’t much difference between trading in Nigeria and trading anywhere else in the world. There are three things you need to be aware of before you start trading. Education and remembering the basics of trading are what will lead you to be successful. So here is a little bit about education, knowing who to mimic and what you can get to make trading easier and cheaper for yourself.
Education
Getting educated about Forex means learning about the complex concepts that drive the markets to be as competitive and as lucrative as they are. The number one thing you can do is learn about the basics by either finding and reading a Forex trading in Nigeria PDF or spending some time going through our very own educational materials. The basics of Forex are not complex to learn and will provide you with enough skills to easily access the more complex concepts of Forex trading. It will also allow you to become a more effective trader at the very beginning of your trading career. Knowing the basic concepts, such as pips, will allow you to start trading effectively in the very beginning of starting to trade. But, it is important that you go beyond the basics. In order to understand what the Indices are saying and what the patterns might be telling you about the future of the currency pair, you need to be able to understand the complex concepts associated with trading. These resources are available online from some of the best traders in the world and a significant portion of them are free.
Keeping up with the best Forex brokers in Nigeria
This is another piece of advice that would be extremely useful for any trader within Nigeria. Some of the top Forex traders in Nigeria have created their own platforms for educating people in the art of doing Forex trading. It is a little hard for the average person to identify whether a professional Forex trader in Nigeria can be relied on to provide important information or not. And since these traders are not licensed by the SEC to operate, it is hard to keep an official record of which ones of them are good to follow. In the end, it will be up to you to make the decision, which is why we urge you to apply the same advice that we have given you about the brokers to this situation. Be critical of what they say and do not blindly follow what they do. Try to understand what they are saying, why they are going the things they are doing and always think of whether their actions suit you or not. Not all professional traders are worth your time, so make sure that if you and when you end up making the choice of a broker, you do so with a lot of forethought and with the understanding that they have good things to offer you.
Forex no deposit bonus in Nigeria
Our final piece of advice is on the subject of bonuses that the Nigerian brokers will be offering you, in order to get you to start trading with them. There are many brokers in the industry and all of them seemingly have something to offer, but some of them have better things than others. For example, XM offers traders a chance to start working with the broker for free, by offering them a $30 no deposit bonus. Other brokers have similar offers and no minimum deposits. But not all no deposit bonuses are the same, and some of them are actually used by scammers to attract unsuspecting victims and cause them to finally make a deposit that they will end up stealing after. This is why it is important to remain vigilant even at the stage of choosing to start trading with a broker for the bonus that they offer.
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