Forex trading is never a business of today. Around the year 2007, Nigerians became aware of a multi-trillion dollar industry call FOREX and as usually, we all flooded in without having a proper orientation about how this forex really operate.
In this article, I’m going to introduce you to this multi-trillion dollar industry that the global market revolves around. Most of you might be asking; what is this? It’s called FOREX TRADING.
Many of you might have heard about it, gone into it and lost to it but as the saying goes “if you want to hide a thing from a man put it in a book” – because he might never read it to comprehension.
I’m going to hit the nail on the head, on why many have failed in this business and how you can succeed, even where others failed.
WHAT IS FOREX?
FOREX is an acronym for FOReign Exchange. Which simply means, it is the buying and selling of different currencies around the world. This is approximately the same with what an Aboki [Hausa] does in front of a bank or 5 Star Hotel. They exchange Dollar (foreign currencies) for the Naira (Nigerian local currency). The difference between theirs and ours is that, the Aboki exchange currencies offline, while we will exchange ours online.
Someone might be asking: How is this business lucrative? I will tell you why.
Currently, a dollar is worth 360 Naira in the parallel market and 305 in the inter-bank market. That means, if I make 100 dollars monthly, that’s equivalent to 36,000 Naira with the parallel rate or 30500 Naira with the inter-bank rate. So technically, I will be making someone’s salary by just at home.
NOTE: Naira is the official currency of Nigeria also denoted as NGN
*This is a hypothetical example
HOW DOES THE FOREX TRADING WORK?
Can you remember the last time you bought something from Ali express or you pay for a service online, using your bank card? Which currency was quoted? It was the USD which stands for the United State Dollar. Your bank exchange the Naira (NGN) for the dollar (USD) it is the same thing the Central Bank of Nigeria (CBN) and other country’s central bank does to increase their country’s foreign reserve except theirs is in a more professional level.
We do not have the amount of capital these banks and other financial institutions have, but we can also tap into this financial market as speculators. We simply buy when the market is trending up; and sell when the market is trending down.
WHY DO MANY NIGERIANS FAIL IN FOREX TRADING?
Just as i said earlier “if you want to hide a thing from a man put it in a book“ many people heard about “forex” and the amount of money one can make from it and they simply delve in without proper knowledge and understanding.
Most people call it scam, the same way they call GTbank or UBA scam for deducting charges from their bank balance.
THE FOLLOWING ARE REASONS WHY MANY NIGERIANS FAIL IN FOREX TRADING
1. LACK OF KNOWLEDGE:
Many Nigerians and other nationalities that comes into this business all fail because they don’t bother to make proper research or to equip themselves with the right knowledge about this business and its mode of operation.
This is equivalent to an individual Googling “how to perform a heart surgery“ and after reading 2 to 3 PDF, he then says he’s a medical doctor. This is what many peoples do. They just read an article online on forex trading and they feel they are guru.
When an average Nigerian hears the word “free money” they starting dreaming of how to live in Banana Island and drive the latest sport car. I can confidently say that “70% to 80” of Nigerian who have lost their money in this business did so because of greed and these psychological traumas do not only affect Nigerians but people from the whole world.
3. NO/USELESS MENTORS:
Allow me to use the word “useless” but there are some people that pride themselves online and offline, telling you they can teach you the secret of the market and how to make thousands of dollars monthly. DO NOT be deceived. If such person can make such amount of money monthly, then they won’t go around advertising it, in exchange for peanut.
4. THE WRONG MIND SET:
The mind set of most Nigerians is still in the 17th century sorry to say this but someone has to say. we so much believe that the only way to earn money is by working from 7AM in the morning till 5PM in the evening only but a few people have realize that indeed legitimate money can be made online.
Though there are many more reasons such as FEAR, POOR TECHNICAL KNOW-HOW, SCAM BROKER etc.
IS FOREX A REAL BUSINESS?
I believe this is the question that might be running on your mind. Let’s play a game, an assumption game. Think of any business at all and tell me the key components that will make that business to thrive. We will have the location, customers, capital and knowledge.
You will agree with me that before you start any business, you need to find a suitable location. It could be a shop or inside your house or it can be anywhere.
Next will be customer, every business needs someone who to sell to and to buy from, along with capital and a proper knowledge of what to do, how to run the business etc.
What if i tell you that you can do all this from the comfort of your house while trading forex?
You can be anywhere and trade in the forex market so the problem of location is solved. You don’t need to find a customer because there are hundreds of banks, financial institution, hedge funds, etc. that will want to buy and sell from you, the problem of customer is solved, you can start with the same capital you would need to run an offline business and it is a MUST to have a proper, unadulterated knowledge about the forex market.
So we can see that forex trading is not only a substitute for an offline business, but is also a real business of its own.
HOW TO START FOREX TRADING BUSINESS
Starting forex is pretty easy but many still fail in their infancy stage. The first stage in becoming a profitable forex trader is to know the basic of what is forex. You need to know the foundation of forex. You can get our forex educational series to get started.
The tools you need to trade forex include:
- A computer or phone but computer is better for a start
- Internet connection preferably a fast and stable one
- A journal to write your trading experience
- The startup capital
- And most importantly the right knowledge
Thank God for technology most trading execution (buying and selling) have been automated and most trading broker gives a demo account (a training account with virtual money) I recommend everyone to use this demo account for a minimum of 3 months to gain the experience.
Understand that merely reading this article doesn’t mean you are ready to start making money from the forex market. You need to be ready with the terminology and associated with forex and the mode of operation and trading experience (with demo account) before thinking of putting your money into it.