For the second consecutive year, Nigeria has been the fastest growing market for retail forex trading. The industry is seeing a stable growth rate around the world, especially in Africa and Asia, but among all countries Nigeria is growing at the fastest pace. What makes forex trading so attractive to Nigerians? Will the country continue to grow its number of traders in the forex 1 million dollars from 100 years?
What brokers do Nigerians use most? We’ll try to answer these questions in this article. Such exchange rate movement makes people aware of the realities of the forex market and of the potential winnings that can be obtained trading currencies. And we’re talking about dealing with zero leverage. US Dollar in only three months, going from 165 to 199.
The Central Bank of Nigeria tried to calm the anxieties of its citizens in relation to the value of the Naira by keeping a fixed exchange rate of 199 NGN for one USD. But market forces are too strong to be ignored for too long. The Oil Price Crash had increased the pressure on the exchange rate to the point where the Central Bank had no other option but to let the Naira devalue again. Naira sent the exchange rate from 314 to 364.
The repeated devaluations of the local currency made the population extremely conscious about foreign exchange rates and how the currency markets work. People know their savings are not safe unless kept in a foreign currency such as the US Dollar or the Euro, and they also know that a lot of money can be made in the currency markets. The day to day life of Nigerians has been affected by foreign exchange movements too many times, and this has resulted in a large number of people who understand well the forex market and are willing to start trading and make a profit out of it. It may not be just a simple coincidence that the number of forex traders from Nigeria has started to greatly increase since 2016 and the trend is most likely going to continue for the foreseeable future, as Nigeria’s population is very young and access to internet is growing rapidly.
Leverage – The reason why Forex is growing so fast in Nigeria Investing in the stock markets is the most common way for people to invest their money for retirement in developed countries. This way, people hope to increase the value of their savings over a period of many years while taking limited risk. It is a wise choice when your savings are in the tens of thousands of dollars every year. The problem with such long-term and low-yield investments is the high capital needed in order to achieve substantial earnings.
If you cannot afford to save large amounts of money, low-yield investments will generate too little profit and are not a solution for achieving the much needed financial independence. If you can invest only 1,000 dollars, you can’t earn much by owning stocks and bonds. The forex brokers will only require a margin deposit that covers the potential loss of your operation, instead of charging the full amount traded. This means that a deposit of 100 dollars will allow you to buy Euros worth 10,000 dollars if you are trading using 1:100 leverage. US Dollar, Euro, Japanese Yen, British Pound or Canadian Dollar. This is why the brokers give leverage to their traders.
The brokers make more money when their clients trade large volumes, because their commissions are proportional to the volumes traded. This is because they want even their smaller clients to trader high volumes. By using leverage, a trader can decide how much he wants to risk and how much the potential profit will be. You can double your money in a single day, but you can also lose your entire balance in the same amount of time if you use excessive leverage. Nigerian traders are using leverage to their advantage, because they can aim for higher profits without having to deposit large amounts of money. Because of high leverage, forex trading is accessible to everyone, as you can deposit amounts as low as 10 dollars and experiment with the broker’s platform and learn how to become a better trader. Many Nigerians have started with low amounts and once they mastered forex trading they increased the stakes to increase their profits.
Forex Brokers in Nigeria In order to trade on the forex market, Nigerians need to choose a broker. Currently there are no forex brokers based in Nigeria, but this didn’t reduce the appetite of Nigerians for trading forex, as all the major international forex brokers accept traders from Nigeria. This gives Nigerians a wide range of options when it comes to the broker they want to use. Some of the major forex brokers are actively targeting the Nigerian market and have a large number of clients from Nigeria. All of them are very high rated brokers, which shows again that Nigerians have done their due diligence when it comes to selecting a broker and are trading with some of the best companies in the world.
Conclusion Forex trading is getting very popular in Nigeria with thousands of new traders joining the ranks every month. A combination of mobile trading platforms, high leverage and low minimum deposit requirements have made the forex market accessible to everyone. Choosing a forex broker can be a very daunting task because the number of available options is overwhelming. A lot of traders think that a big broker is better than a smaller one because a larger company has many advantages such as economies of scale, a better liquidity position and is the subject of higher scrutiny from the public and the regulators. Since there is a lot of confusion among retail traders about the overall quality of forex brokers, we have decided to create an advanced rating system and evaluate all the major forex brokers in the world according to the same set of criteria. There are many reasons why people decide to open bank accounts offshore. They can include a better privacy protection, access to better banks where money are safer or simply better services that home based banks don’t offer.