Before the advent of the internet, Forex Trading was seen as a rich man’s venture, a venture made for big banks and institutional investors who were the only ones that ended up participating in the interbank forex market. However, the internet have democratized forex trading whereby individuals like you and I can stay in our bedroom, speculate, hedge and trade currencies across border and in the end, make profit.
Before I pull the trigger, let me first define forex for the benefit of those who have lived in the cave.
WHAT IS FOREX TRADING? in simple terms, forex trading is an act of buying and selling of currencies of different countries according to its exchange rate. So, forex is a combination of two English words – Foreign Exchange. Therefor forex exchange means, Foreign Exchange Trading.
You’ll agree with me that Forex in Nigeria is rising at an alarming rate. If you visit popular forums, social media and news sites, Forex seems to be the order of the day. Most advert banners I come across daily on the internet is always about forex. It’s so popular that forex brokers started offering online trading platforms, where you can trade right from your bedroom. Forex trading platforms like instaforex, fxopen, liteforex etc.
There are many forex brokers in the internet, so you need to be careful cause there are also lots of fake forex brokers out there, whose aim is to defraud you of your finance. I always advice making a thorough research before settling for any forex trading platform.
The simple truth is, you can delve into forex trading and make money while the bad news is; you have to sit your ass down and learn all the rudiments as it pertains to forex. Your profit or lost lies on how much you know. It’s not magic.
It is true that you can start trading with as little as $100, but you have to take time to discover how the global economy works before you start playing with real money. The foreign exchange market is an ever-changing market, there’s no moment of static or stagnant. It’s possible to invest $100 now and reap tremendous profits the next minute, same with lost. It’s so dynamic that it can’t be accurately predicted, that is where profit or lost is made.
By now, I’m sure you’re boiling with questions like;
- How much can I possibly make from trading forex?
- What are the risk and challenges in forex trading?
- How much do I need to start this forex trading business?
In this article, I’m going to guide you on how to start forex trading in Nigeria or anywhere in the world. Like I have already stated, you need to learn how the market works before playing with real money. I’m just a guide, you alone have to take a step.
HOW TO START FOREX TRADING
1. OPEN AN ACCOUNT WITH FOREX BROKERS
Forex brokers serve as a medium through which you can trade online.. They are the middle men, between the seller and the buyer. It’s very important that you choose a good forex brokers. A forex broker that accept traders in your country. A broker that also accept payments method supported in your country. In fact, your success as a forex trader is directly tied to your forex broker. Good forex brokers see you as a partner, your success is theirs and as thus, they help you in any way possible. Alpari is one of the best with presence in Nigeria.
2. TECHNICAL KNOW HOW
Like I keep saying, you need to know how forex trading works. One of the ways to do that is by opening a demo account on any forex trading platform of your choice. This demo account is loaded with virtual money and in real-time mode. But you’re not affected whenever you make profit or lost.
This is just like playing monopoly. Mind you, you need to be proficient before you start thinking of playing with real money. Make sure you practice and practice till you get a hang of it. Take your time and learn, it’s fun when you’re not all that desperate to make money.
Most forex trader prefer to play with every different currency pair. However, I always recommend specialization. That’s, focusing on two currency pair to understand how they react with each other. As time goes, you can diversify cause you have amassed great experience already.
Currently, there are 6 currency pairs that are the best to trade. They are:
- EUR/USD – Euro/U.S. Dollar
- USD/JPY – U.S. Dollar/Japanese Yen
- USD/CHF – U.S. Dollar/Swiss Franc
- GBP/USD – Great British Pound/U.S. Dollar
- USD/CAD – U.S. Dollar/Canadian Dollar
3. FUND YOUR FOREX ACCOUNT
This must have been months later, after you’ve done all the necessary research and play with your demo account till proficiency. You can start small and then walk your way to the top. Most online sources usually advice starting with a huge finance which I found to be very ridiculous. You can start with $100.. As you progress, you then fund your account with more money. Starting small help you gather all the confidence and knowledge you require to venture fully.
4. OPEN A DOLLAR/ DOMICILIARY ACCOUNT
This account is used for withdrawing and depositing funds into your forex trading account. Almost all banks in Nigeria can help open a domiciliary account. When I opened mine, i went to Zenith Bank and it was so smooth. I think their only requirement is having a savings account with them. Your National ID card and passport will be needed also.
5. FOREX TRADING TOOLS
The only tools you need as a forex trader is;
- A High Performing Laptop
- A Fast Internet Connection
- Constant Electricity Supply
Any device you use must be efficient cause we’re dealing with a live market that’s constantly ticking like a clock. What this means is that you don’t need a crappy computer system that’s lagging behind in years. Make sure your computer system is good and the internet connection fast. These basic tools are part of your success as a forex trader.
After you’ve gotten used to forex trading, it’s advisable you invest a substantial amount of money in other to realise huge returns. In fact, you shouldn’t be dealing with hundreds of dollars, it should be thousands cause that’s where the gold lies. All it takes to succeed in the forex market is being able to learn fast and the ability to stay updated to latest news. It’s a risky venture, but highly lucrative.