Trading foreign currencies is an easy-to-use business method. Yet, when one decides to make a try without sufficient knowledge and experience, one usually ends up in debt. So, if you are determined to earn from foreign currencies, you had better avoid haste and learn the theory before taking decisive steps.
In simple words, Forex trading involves buying one currency in exchange for another one and reselling it when its price goes up. Thus, this activity is based on market monitoring and calculations.
Despite the fact that, in certain countries, this sphere remains unregulated so far, in Nigeria, the situation is reversed. Such trading is decently legalized and scrupulously controlled by local authorities ― namely, by the Central Bank of Nigeria. Naturally, there are also strict demands on those brokerage companies that intend to work within this country. Besides, local traders are recommended to choose brokers that are licensed in tier 1 countries such as the EU, the UK, Australia. As for taxation, all the profits from Forex trading in Nigeria must be reported and are subject to taxation.
Another aspect worth discussing is timing. In general, the foreign exchange market is open around the clock. But, as a rule, traders are the most active between 8 AM and 4 PM. So, your goal is to determine at which points such hot periods in your time zone overlap with others and adjust your trading routines to that. Sure, our experts have already prepared prompts for you. According to Nigerian time, the most advantageous period for executing deals is from 1 PM to 7 PM when the New York and London trading sessions coincide. At this time, the trades volume and liquidity rise significantly and provoke price movements. As for the days of a week, the most productive ones are Wednesday and Thursday.
So, are you ready to give it a try? Follow these steps:
- Register with a broker. Again, to be on the safe side, make sure the brokerage company chosen is licensed either in Nigeria or in a tier 1 country. Afterward, choose by commission rates and asset and instrument selection.
- Activate a demo account. It is not recommended to make real deposits until you make sure the platform chosen meets your needs. So, test it with virtual funds first.
- Select a strategy and master it with virtual money. As far as you are a beginner, stick to basic and simple approaches.
- When you feel experienced enough, proceed with trading for real. Experts recommend starting with a deposit of about $200–500. However, be sure to consider passive trading options first. These can be copy trading or creating a PAMM account.
In sum, if you are interested in this market, make a demo account. Practicing with virtual money will allow you to decide whether this business suits your goals.