Amount of Active Online Traders in Nigeria
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.
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.
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.