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Nigeria has the second biggest Forex market in Africa. The local trading community is robust and ever-expanding. Last year, it was estimated to include 200,000 active Forex traders. In the future, the region may forge ahead and lead the industry.

Facts and Figures

Today, online trading comprises different avenues of financial speculation. The most popular instrument in Nigeria is Forex. The global foreign exchange is the largest and the most liquid market in the world. Its daily volume is spectacular — close to 6 trillion US dollars.

Retail traders account for a fraction of this volume. The market is also assessed by large institutions like banks, hedge funds, and businesses. Until the 1990s, the foreign exchange was off-limits for individuals. Today, FX trading is all the rage.

The BRICS nations account for the largest share of daily trading. On the African continent, South Africa is the leader. Last year, according to Forexbrokers.co.za, its traders bought and sold 20 billion US dollars per day. Nigeria came second with 314 million USD.

Despite the difference in volumes, the two African countries have a similar number of traders. South Africa has 190,000 — slightly fewer than Nigeria. Nigerian traders make deposits of $514.42 on average (it is $742.04 for their South African peers).

Overview of the Markets

The global currency market has no physical centre. It is classified as over-the-counter, which means that buyers and sellers connect directly. Today, foreign exchange has a colossal turnover. World currencies flow between institutional and retail traders. Individuals use digital terminals and gain access through brokers.

Through a live trading account, clients may assemble diverse portfolios. Global brokers give access to Forex, stocks, spot metals, and derivatives. The more instruments are managed — the lower the overall risk.

A sophisticated system like MetaTrader 5 allows convenient trading of different asset classes. Here are the most common options:

  • currency pairs (Major, Minor, and Exotic);
  • spot metals (gold and silver);
  • stocks of US corporate giants;
  • stock CFDs;
  • cryptocurrency CFDs;
  • commodity CFDs;
  • CFDs on market indices.

Through an online trading account, a client may buy and sell different instruments. Stocks allow you to profit from the performance of US-based corporations. It is possible to choose the biggest household names like Apple and Facebook.

Contracts for Difference (CFDs) are virtual derivatives linked to underlying assets. They are highly leveraged, which means that trading volumes can be increased by the broker. The holder does not own the asset: instead, they bet on the direction of the market. The broker pays the difference between entry and exit points.

Regulatory Landscape

Despite its rapid growth, the Forex market in Nigeria lacks regulation. Traders may use local or foreign brokers for connection to the marketplace. Due to its popularity, Forex is a gold mine for scammers. Traders must choose providers very carefully.

The safest choice is global brands licensed by foreign regulators. For instance, the ForexTime broker is part of a group which has licenses from different jurisdictions: Cyprus (the CySEC), the United Kingdom (the FCA), and South Africa (the FCSA).

Regulated brokers have to comply with industry requirements. They provide negative balance protection, so traders never lose more than they deposit. In the event of bankruptcy, their clients are eligible for compensation.

Trader’s Arsenal

Modern systems are different from pit trading, which you can see in old Hollywood movies. In the past, the speed was slow. Clients had to call their floor brokers if they wanted to buy or sell shares. Each operation involved several people. Today’s systems offer 1-click trading, which allows you to capitalize on momentary changes.

Everything is managed through an app or a desktop terminal. Traders analyse the market using streaming prices, charts and news updates. They can customize their aids to pursue different strategies. Timeframes may be switched to highlight changes over a certain period, from one minute to one month.

The most popular trading terminals, such as the FXTM Trader app, are all-in-one products. Users can research the market, place trades and withdraw their profits. Every operation is a tap away. The largest global markets are now at your fingertips, and they can be monitored at a glance.

The Bottom Line

Today, the coronavirus pandemic has wreaked havoc on the local economy. Nigerians are increasingly interested in opportunities for remote work. As the job market is shrinking, online trading is a viable choice.

By 2019, Nigeria had a vast army of online traders. Today, over 200,000 residents buy and sell financial instruments through the internet. Regulated brokers provide access to a broad choice of tools, from currencies to derivatives.

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The global financial crisis has resulted in many changes on different markets. For instance, as you probably remember, many large banking organizations have collapsed and their collapse had serious consequences on the financial sector. Numerous elements of this sector that were “reserved” for the big players became available to the ordinary people and on top of that, they don’t have to leave their homes in order to get involved in this activity. Almost every type of trading is now available on the Internet. The financial industry has followed the process of digitalization just like most industries.

Today, any individual with a computer or a laptop and access to the Internet can start trading no matter where they are. Even though there are many different types of trading, the fact is that CFD trading is among the most popular ones. The reason is simple – any person that is willing to learn more about this market and procedure can earn a good amount of money in a relatively short period of time. In addition, if you are able to leave emotions out of this activity the success is almost guaranteed.

On top of that, there are many great companies offering CFD trading like CMC markets that will help you with this process. Now let’s see how you can get the most from this activity.

If we compare contracts for difference or CFD traders to any other type of traders we will notice that CFD traders don’t have to possess some special talents or skills. The things that are important for their success are good training, realistic goals, motivation and having everything under control.

Keep in mind that this financial sector is constantly changing and there are some rapid movements of huge amounts of money that are transferred from one account to another on a daily basis. Obviously, this means that there is a good chance to make good profit from these transactions, but chances are that you will lose huge amounts of money too.

However, this is only possible if you are not sticking to your plan and strategy. This is the reason why so many experts say that good training and preparing goals and plans is crucial before you even start with this activity. There are a huge number of people who think that reading a few articles on the Internet will make them a successful CFD trader, but this is wrong. You should never invest any money on a market that you don’t understand completely. Take some time to check specialized training blogs and sites where you will learn how to trade and how to monitor and analyze the future movements of CFD markets.

It is also a good idea to join forums and discussion boards or any other platform where you can discuss and get tips from CFD traders that have experience and success. The good news is that there are many traders like this who are willing to share their experience.

Finally, it is also a good idea to try the demo account from CFD trading platforms. The most successful CFD trading service providers offer free demo accounts for their users. This is excellent for beginner users because they can see how the trading works without investing real money.

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