Want to jump straight to the answer?
Best Forex Broker for Nigerians
- Thorfx - Accepting US Clients Up to 500:1 leverage
- OspreyFX - Up to 500:1 leverage
- EagleFX - Bitcoin funding
The Covid 19 pandemic and its severe impact on world economies and the financial situation of individuals across the globe have brought to the fore more than ever the realization that it is hard for people to survive depending on just a single source of income. What the crisis has highlighted is that ideally, individuals need to seek out opportunities that are solid and as pandemic and disaster-proof as possible.
It thus comes as no surprise that Nigerians, and especially the younger generations, have recently begun to be seriously looking into the trading of forex. Forex trading is comfortably ranking as the biggest and most liquid market in the world holding much potential for profit and lucrative opportunities. And thanks to the existence of many online forex brokerages, which provide access to the market for all, Nigerians just like the residents of most other counties in the world, are able to trade from anywhere and at any time online and from any smart device.
Though some point to the fact that earning money from speculating on currency prices against each other is not morally acceptable and thus perhaps counterculture for Nigerians, the boom in the interest for Forex trading from this country, shows that those with such concerns are in minority. If you too would like to know more about Forex trading and decide whether the time has begun for you to also jump on the bandwagon, then read on this concise guide which aspires to be a credible point of reference for interested beginner traders in Nigeria, addressing all relevant aspects of the matter at hand, including whether trading forex is legal in this great country. But before delving into more detail, let us first briefly define what forex trading is.
What is Forex Trading?
Forex trading is a financial transaction that pertains to the buying and selling of pairs of fiat currencies. Forex trading is practiced by individual traders primarily in pursuit of profit, as well as by organizations and institutions, which, besides profit may also have other reasons to engage in this type of transactions, such as to regulate the market and facilitate trade. Trading the foreign exchange market has long been on an upward trend, gaining in popularity and momentum, even during the COVID crisis, leading many to characterize it as pandemic proof.
The forex market as it is most commonly known, is the world’s largest financial market recording massive trading volumes in excess of $5 trillion daily through transactions that occur all over the world through online computer-based networks. Besides being the biggest market, it is also the most liquid and most volatile. High liquidity, i.e. the ease with which a forex asset may be converted without affecting its price, also means lower transaction costs, thus rendering the market even more accessible to small-scale traders. Moreover, high market volatility, i.e. the high velocity of price changes in the market, brings ample opportunities for profiting.
An overview of the Nigerian foreign exchange market
Nigerian forex traders can have access to the forex market 24 hours a day, 5 days a week, without being hampered by their own time zone. This is because, due to time zone differences, when one fx market closes, another one is opening, while many overlaps.
What is worth noting is that foreign trading specifically in Nigeria has become much easier and much more popular in recent years, aided by the substantial overall economic growth recorded in the country, which has also meant an increase in the disposable income of many individuals. Thus, with Nigeria being one of the most prosperous countries in Africa, it comes as no surprise that Nigerian forex traders are placing forex trades worth over $1.25 million on average every day. It is only natural then, that Nigerian traders are more than welcome in an increasing number of online brokerages, allowing them to open trading accounts and giving Nigerian traders, both seasoned and novices a chance to connect to the global currency markets.
Why Forex trading is becoming increasingly popular in Nigeria
The impressive numbers of Nigerians turning into forex trading and the high transaction volumes recorded to reveal the increased popularity of trading forex in this great African nation. What is important however is to have an understanding of what it is that lures Nigerians into forex, with the main reasons pertaining to the merits of forex trading a form of investment in itself.
The fact that one can trade forex whenever they want, allowing traders enhanced time flexibility is a very appealing aspect of forex trading since interested traders can trade around their own schedule, while also being able to adopt a passive or aggressive approach to their trading endeavor, according to their own specific needs.
According to numerous local analysts, the fact that forex is a reliable option for those investors wishing to diversify their portfolio by asset classes and sectors is yet another reason why Nigerians rush to join the bandwagon. Another strong point of forex trading that Nigerians seem to like is that it offers trading styles that are suitable for both short-term and long-term investors, while being perhaps the most rewarding asset class available for trading, due to the high levels of leverage involved, especially in comparison to other financial markets. The high leverage, which is not present in other forms of trading, such as when trading stocks, means that traders can trade with larger sums than the capital they are actually investing and this may mean much higher profits, increasing however at the same time the potential losses if they occur. Nevertheless, if one can properly manage the risk, then forex trading is clearly the most lucrative market around.
Delving deeper into the merits and characteristics of forex trading which make it so appealing to Nigerian traders, we should also point out the following:
The forex market has always been the most liquid financial market, and thus with trillions exchanged daily, traders never need to worry if a trade they place will be processed, especially when trading between the major currency pairs. Having even surpassed at times the $6,5 trillion mark in daily volume traded, the forex market is a great avenue for every individual to earn a supplementary income or even to make a living. On top of that, by giving a person the liberty to be in control of their finances, being engaged in forex trading is also a great way to build your character, teaching you the importance of discipline, while also forcing you to always stay up to date with important world and financial events which affect the global fx markets.
The ability to buy or sell anytime
The advantage of forex over other markets, such as equities, for example, is that you are trading in pairs of currencies, allowing you to profit from both bullish (upward) and bearish (downward) trends anytime. In fact, forex trading is flexible and versatile and you can still trade irrespective if the market is rising or falling, with certain forex trading strategies actually depending on a falling market. The forex market is thus full of potentially lucrative opportunities under any market conditions and the high volatility is more helpful in this regard. Though coming with an inherently higher risk, sudden price changes in the forex market can bring a lot of profit to traders who can time their moves right. Low transaction costs Since currency transactions are completed using the over-the-counter method and based on direct access to the market, this means that traders avoid the exchange fees and clearing charges they are called to pay when trading stocks, ETFs, or bonds. Generally speaking, forex trading comes with much lower transaction fees, these mostly pertaining to a percentage commission charged by brokerages on the currency trades you process via their trading platform.
Despite being a very popular and active market across the country, forex trading in Nigeria is still largely unregulated, as authorities are still coming to terms with new developments. A by-product of this more relaxed approach is that trading the forex market in Nigeria is not subject to the charges and restrictions that trading stocks is, and the current pricing of forex trading depends solely on the supply and demand. This is a far more attractive set-up than Nigeria’s stock market, where a local stock cannot trade up or down beyond 10% of its present value for each day.
Is Forex Trading Legal in Nigeria?
The forex trading landscape and ecosystem in Nigeria are still in its nascent stages and while forex is legal since there are no laws prohibiting it, it is also still largely unregulated. However, authorities seem to favor forex trading and appear to be encouraging the country’s youth to engage in this process, partly as part of their effort to generating foreign currency back into Nigeria. Since the national income of Nigeria is heavily dependent on crude oil sales, and fall in crude oil prices hits the financial situation of the country hard. The 2020 crisis of crude oil prices collapsing forced the Federal Government of Nigeria to take rectifying measures, while the country’s Central Bank has asked local banks to force their private and corporate account holders to convert their remittances and foreign currency earnings to local currency, so that the Central Bank may use the US Dollar equivalents to boost its depreciating foreign currency reserves.
Thus, with their government’s silent encouragement, Nigerians may trade forex and for as long as there is still no clear legal framework guiding and explicitly regulating the field, they are free to trade via the forex broker of their choice. However, as the country is bound to move towards regulation eventually, let us take a look at the pertinent authorities and main players in the Nigeria foreign exchange landscape:
The Nigerian SEC
The main source for the regulatory gap on forex trading in Nigeria stems from the stance adopted by the country’s financial markets regulator, namely the Nigerian Securities and Exchange Commission (SEC). Though the Nigerian financial markets are not as stable and robust as those in western countries, the SEC in Nigeria does regulate not only the Nigerian Stock Exchange but also the bonds market and the operators within the equity trading industry. However, the SEC has not so far made any moves towards the active regulation of neither the forex market nor any other financial trading products, which are considered exotic. Its approach has been to simply be issuing disclaimer warnings to the public urging them to only trade with money they can afford to lose and only invest in markets approved by the SEC. Besides the SEC, the other main players in the Nigerian foreign exchange market are
- The Central Bank of Nigeria, which is clearly the biggest player in the forex exchange business in the country. Due to its institutional role, the Central Bank has the power to enact laws and regulations in order to control and regulate the other local players in the forex market.
- Commercial Banks, most of which are licensed by the country’s Central Bank to deal in foreign exchange, and thus the customers of duly licensed local commercial banks, irrespective if they are residents or non-residents, can open and use domiciliary accounts.
- Authorized Buyers, which are either corporate bodies and another type of end-users that have been granted approval by the Central Bank, allowing them to be buying foreign exchange from banks.
- Authorized Dealers, who were authorized and appointed by the Nigerian Central Bank to be able to sell forex to end-users, as part of a central effort to further boost and liberalize the country’s export sector.
- Oil Companies, which play a big role in the country’s forex trade since they are Nigeria’s largest and most important exporters, thus earning massive amounts of foreign currencies from the sale of their oil products. Oil companies may then sell these foreign currency amounts to other local forex players in Nigeria.
More on the Legal Regime of Forex in Nigeria
The legality of forex transactions in Nigeria comes to the limelight more pressingly due to the incredibly fast rise in forex trading in the country. This becomes more relevant due to the heavy dependence of the country on oil sales, which by far earns the biggest part of foreign exchange for the Nigerian economy. This, however, also renders the Nigerian foreign exchange market highly volatile. In turn, this high volatility spurred the Nigerian government to attempt to regulate the forex sector, through measures taken by the country’s Central Bank, which is the institution responsible and empowered to enact such policies and measures to effectively control the foreign exchange transactions in the country. Such attempts by Nigeria’s Central Bank have usually taken the form of imposing such laws and regulations which periodically regulate the control of the transactions carried out in foreign currency in the country.
The Forex Brokerage Landscape in Nigeria
Having reviewed the broader landscape on the institutional level, let us now shed further light on the makeup of the forex brokerage ecosystem in Nigerian, to help aspiring Nigerian forex traders know where and how they can start trading:
Offline Forex trading
Though offline forex trading is not geared towards individual, small-scale traders, it is worth being cognizant of its existence, and pointing out that all offline foreign exchange transactions carried out by commercial banks and other centrally authorized dealers in Nigeria are regulated by the country’s Central Bank, which gives the permission to banks and other properly approved bodies to carry out such activities.
Online Forex Trading
Online forex transactions are still are relatively new niche in Nigeria and thus there are no specific rules regulating this sector as of yet. However, the pertinent authorities in the country have started undertaking concerted efforts to set up a framework for online forex trading in Nigeria. This effort is spearheaded by the Central Bank of Nigeria and I mostly carried out under the auspices of the Association of Online Forex Trading Agents in Nigeria, a new-formed body that enjoys recognition by the government and works closely with all relevant authorities and bodies.
Nevertheless, and until the exact, specific legal and regulatory framework is in place, all local forex traders have to abide by the existing laws to be able to legally trade forex in Nigeria. A problem arises when most novice Nigerian forex traders are completely unaware of how forex trading works and thus resort dealers and brokers for consultation, who often receive their money and trade on their behalf, a process that is illegal in Nigeria unless you are a properly licensed and authorized broker, allowed to trade using other people’s money. Besides ensuring their online forex trading efforts remain within legal boundaries, Nigerian forex traders should also note that their forex transactions will be treated like other types of business transactions for taxing purposes.
Scam Forex Brokers in Nigeria
The past and current regulatory gap and void regarding online forex trading in Nigeria provided ample room for forex brokers to enter its market, but at the same time resulted in many scammers, posing as money managers, introducing brokers, signal providers, and others setting up shop and trying to attract customers through schemes which often proved to be mere Ponzi-style frauds. Among the reputable forex firms which have set up local branches in Nigeria in recent years are ACM Brokers, Instaforex, Alpari, Liteforex, and Avatrade. However, such firms are others like them were not licensed by the local Securities and Exchange Commission to offer forex trading services to Nigerian residents, but offered such services through their licensed operations in other offshore jurisdictions, such us Cyprus and its local watchdog, CySEC. Such brokerages have largely conducted their operations in Nigeria properly and respectably, in stark contrast to the numerous scam operations that have plagued the Nigerian forex landscape, mainly in the form of “trade for me” models, where unlicensed individuals claim to be trading forex using one’s money on their behalf, promising high returns but ending up being fraudulent investing scams and Ponzi schemes. Thus, aspiring forex traders in Nigeria should be wary and pay much attention to their decisions, making sure they stay away from such scammers and fraudsters.
Trading with Offshore Brokers in Nigeria
Though as mentioned above, certain forex brokerage firms have set up local branches in Nigeria, still, the majority of online forex trading in the country is done through offshore brokers. Over the last fifteen years, several offshore-based brokers have competed for the title of the best forex broker in Nigeria and the landscape keeps changing as more and more brokerages offer their services to Nigerian customers. Indicative of how far the field has expanded is the fact that the first and most coveted offshore forex broker in the country back in 2005, Marketiva, is now defunct. Up until 2018, the majority of offshore brokerages offering their services to Nigerian customers were Cyprus-based and licensed, though in recent years and due to stricter regulations by the European Securities and Markets Authority (ESMA) , to which the Cypriot regulator CySEC had to abide, the rising tendency for Nigerian traders is to prefer offshore brokers based in the British Virgin Islands, St. Vincent and the Grenadines, Vanuatu and other similar locations.
The Importance of Regulation for the Nigerian forex landscape
Over a decade ago it was a common phenomenon plaguing Nigerian forex traders to become victims of scammers and fraudsters in the form of unscrupulous offshore brokers who took their funds and disappeared. Ever since, increased awareness has led Nigerian traders to be far better equipped to avoid fraudsters and understand the importance and significance of trading via brokerages that are reputable, trustworthy, and preferably well-regulated. However, there are still local traders who are tempted and lured by the false promises and bonus offers put before them by crook brokers, leading them to suffer big losses down the line. This has led many prominent figures of the local Nigerian financial markets to begin pressuring and lobbying the authorities and more specifically the Securities and Exchange Commission (Nigeria) to put in place a robust and specific regulatory framework of the online forex market in Nigeria, following the example of other countries, such as Kenya, South Africa, and Mauritius.
However, in a country as ethnically diverse as Nigeria, it is often difficult to gather enough consensus to bring about new legislation and regulations, as this would require a willingness to cross ethnic lines and engage in significant collective bargaining. Besides being difficult, as the country’s financial markets are dominated by certain specific ethnic groups, the legislative process in the Nigerian Senate and House of Representatives is also very lengthy, as revealed by the attempt to regulate the country’s all-important oil sector, which has been on the cards of over twenty years, without yielding any tangible results.
Naira Forex Brokers and Naira Forex
Accounts As the sale of foreign currency to individuals in Nigeria is tightly and strictly regulated by the country’s Central Bank, which imposes a cap on how much local Bureaus de Change may sell, it is very difficult for Nigerians to get hold of foreign currency amounts. Moreover, when Nigerians resort to local banks to buy foreign currency the process is highly bureaucratic and lengthy, requiring very detailed documentation and also subject to close scrutiny by the CBN. Thus, obtaining foreign currency to fund their forex accounts is notoriously difficult. This is why many forex brokers offering their services to Nigerian clients are now allowing such clients to fund their trading accounts in Naira. This was a very welcome step by Nigerian traders and all brokerages offering this have instantly become popular and successful. Moreover, being able to have Naira forex trading accounts means that Nigerian traders find it easier to calculate both their returns and the risks they are undertaking.
Though the majority of Nigerians are Muslims, currently, the issue of Islamic accounts is not considered as significant, since forex trading in Nigeria seems to be conducted mostly by Christian Nigerians, residing in the south of the country, with the Muslim population living mostly in the north of the country having little participation so far. It appears that for the time being Muslim Nigerian investors prefer to conduct their investments through the Jaiz Bank, Nigeria’s only Islamic-investment compliant financial institution.
Opening a Forex Trading Account in Nigeria
Nowadays, the process of opening a Forex trading account in Nigeria is as simple and straightforward as it is in any other location. Besides the filling in of the relevant online application form to obtain a trading account, interested Nigerian traders must also proceed with the verification process and provide proof of their identity. In the past this was burdensome as a notarized copy of a trader’s passport was required, but things became much simpler following a reform in the country’s driving licenses system, which has rendered one’s driving license an internationally acceptable document for the purpose of identity verification. Besides their identity, traders must also verify their address by submitting a copy of a recent utility bill or bank statement.
How we Rate the Forex Brokers offering services in Nigeria
Our recommendations for Nigerian based traders about the forex brokerages they should seriously consider are based on our assessment and rating of their services and offers, which is the result of evaluating and taking into account a variety of vital parameters, which inter alia include the following:
The type of each forex brokerage is an important parameter to consider for an interested Nigerian trader, as the ECN trading accounts offered by brokers operating under the ECN model are usually too expensive for the average Nigerian forex trader. Therefore, currently, the landscape is dominated by brokers operating under the market maker model, which seems to be more suitable for Nigerian forex traders. Moreover, as the MT4 platform is the most widely used and the one that Nigerian traders are most probably more comfortable to trade through, it is important to give preference to the majority of retail forex brokerages offering this particular platform.
As most Nigerian forex traders, especially complete beginners and novices seeking to try out forex trading by allocating only a small amount, at least, to begin with, it is important that forex brokers operating in Nigeria offer a variety of account types, including micro accounts which cater specifically to the needs of traders who want to start out small.
As already pointed out, the MT4 is the most popular platform among Forex traders in Nigeria, as it is amongst forex traders and brokerages alike in the rest of the world so far. Being the most widespread and longest established, as well as straightforward and easy to use, especially for beginners, the MT4 is the preferring trading venue and thus so are brokers offering this type of platform over its newer sibling the MT5, or various other proprietary platforms, all of which have failed to gain any traction amongst Nigerian forex traders.
Though the overall fees imposed by brokerages should be a prime factor when choosing amongst them, relevant studies have shown that to date, Nigerian forex traders do not attribute much significance to the level of spreads offered by brokers and are thus not too mindful of this aspect, though reduced spreads do mean a reduced trading cost.
Rightly so, a great number of online forex brokers targeting the Nigerian market have now put in place local support networks, where users and clients can reach out to locally-based customer service representatives. Such staff are much better equipped and suited to understand the specific needs of the local population and offer support, guidance, and advice that is more suitable and more effective, and tailored.
Education and Research
Since the overall online forex landscape in Nigeria is still at its nascent stages, education and research are the backbone of the market penetration for most brokerages, as they seek to raise awareness on forex trading among prospective traders, as well as gain for exposure for their particular firm. Most local brokers fare poorly in terms of providing top-notch education opportunities since their efforts were mostly through physical presence seminars, which ended up being mere sign-up events with no real offering of any value. On the contrary, most offshore-based, well-established, and reputable brokerages do offer a variety of educational and research materials, using real experts in the field and offering interested Nigerian traders great chances and opportunities to learn and start trading successfully.
What all Beginner Nigerian Traders Must know before starting to trade forex
Having explored the Nigerian forex landscape and highlighted what makes a good forex broker for Nigerian aspiring traders let us now proceed with some solid advice that will ease the way for any interested, novice Nigerian traders, increasing their chances for eventual forex trading success.
An aspect whose importance can never be stressed enough for novice forex traders, irrespective if they are based in Nigeria or any other country in the world, is that of education. Indeed, lack of adequate forex trading knowledge is perhaps the most common mistake that beginner traders make, as they get overexcited and jump in without ensuring they know enough about the forex market and effectively trading forex. Thus, we strongly urge all Nigerian beginner traders to ensure they research and learn about forex before they start trading and risking their money.
A first and vital step would be to learn about the most commonly used terminology in forex trading and the definition of such terms. Such knowledge and understanding of the relevant jargon are essential before starting to learn further as aspiring traders will be exposed to such, previously unknown terms, from day one.
To help wannabe traders make a head start, here’s a concise list of the main terms that they will be exposed to, and are essential to know their meaning before they start their forex trading journey:
- Base currency: this term, which denotes the currency that always appears first in each currency pair being traded, essentially refers to the currency that the trader is currently holding and is trying to sell or exchange for another currency. In the case of Nigerian traders, the base currency is usually the Nigerian Naira.
- Quote currency: this term refers to the currency which always appears second in a currency pair being traded and denotes the currency that the trader intends to purchase, i.e. the currency to be exchanged with the base currency.
- Bid/Ask Price: This is perhaps the most important term if you are going to trade forex since it is at the core of every transaction. The bid price is the price at which the broker is willing to buy the base currency that the trader is holding, while the asking price refers to the price that the trader is called to pay for buying the quote currency of his or her choice.
- Spread: the spread is another important term in all forex transactions and it refers to the difference between the bid and the asking price, expressed in pips. Essentially, the spread represents the charge imposed by the forex broker for rendering the brokerage services that make a forex transaction possible. Spreads may either be fixed as determined by each broker or floating, varying according to the prevailing market conditions.
- Pip: is the acronym for ‘Percentage in Point’, where one pip is equal to 1/100th of the base currency held by the trader. Spreads are expressed in pips since pips are the smallest measurement of the value of currency price movements.
Besides making sure to learn the basic terminology so that learning about forex trading will make sense to them, novice forex traders in Nigeria and elsewhere should also make good use of another useful educational tool which comes in the shape of demo accounts, often offered by online brokerages. Through a demo account, beginner traders can trade under real, live-trading conditions, in a risk-free environment without jeopardizing any of their funds, giving them the chance to practice and gain skills and confidence before they start trading using real funds.
Developing a forex trading plan
Once they learn enough through education, prospective traders should then develop their own forex trading plan, which is essentially the set of specific rules and guidelines, which will shape, define and guide each trader’s trading behavior. Having such a plan and sticking to it is an essential component if a trader wants to be successful, while the absence of one tends to lead to impulsive or even erratic behaviors and decisions.
Beginner Nigerian traders should thus make sure that they accurately recognize and evaluate their needs and limitations and clearly define their goals and objectives as traders before they start trading. This will help them to keep focussed and not be carried away by emotional outbursts, while also allow them to manage the risks they undertake more effectively.
Choosing a trading strategy
Armed with adequate knowledge of forex trading and having a clear picture of their limitations and goals, as defined in their trading plan, Nigerian beginner traders can then start looking for a suitable trading strategy to adopt and follow, or even eventually develop their own unique strategy.
Novices should ensure that their chosen strategy is in line with their trading plan and that it matches and is compatible with their own personality, trading style, and preferences. When choosing their trading strategy Nigerian beginner traders should also take into account their time management, dedication, patience, and commitment. The performance of the trading strategy will largely depend on the accuracy of its implementation and the quality of the historical data on which it is based.
Knowing what drives the forex market
With their trading plan and strategy in place, novice Nigerian traders must also understand the factors which affect and drive the prices and exchange rates in the forex market. Such factors, inter alia, include decisions and policies by Central Banks, the prevailing market sentiment, as well as news reports and developments which affect the economy and the prices of currencies. Staying up to date with news and developments better equips traders to be able to anticipate the reaction of markets and the movement of prices, while also allowing them to make extensive use of fundamental and technical analysis in order to make the correct trading decisions.
Choosing the right forex broker
The final and most important decision for novice Nigerian traders, before they start trading, is to make the best choice when it comes to selecting the broker to facilitate their trading endeavors. When seeking to make the right choice of broker, beginner traders in Nigeria, should, inter alia, consider the following:
- Whether the offering of the brokerage, including the trading tools it provides, suitably matches the trading strategy and goals of the trader.
- Whether the brokerage is regulated and reputable, ensuring the funds of its clients are segregated and safe.
- Whether the trading and non-trading fees charged by the brokerage are clear to understand and affordable.
- Whether the broker’s platform is reliable and user friendly and whether it offers a demo account, through which traders can test and try out the platform.
- Whether the broker offers adequate education and research materials, resources, and opportunities.
- Whether the broker accepts a variety of deposit and withdrawal methods and whether such transactions can be carried out easily and swiftly.
- Whether the broker offers robust, reliable, effective, and accessible customer service at an excellent level.
The Best Forex Brokers in 2022
Things we liked: Accepting US Clients Up to 500:1 leverage
Low minimum deposit requirement
Things we didn't like: Absence of a direct telephone number for customer support
Thorfx is not a fully licensed and regulated broker
Things we liked: Up to 500:1 leverage
Low minimum deposit requirement
Things we didn't like: Absence of a direct telephone number for customer support
Ospreyfx is not a fully licensed and regulated broker
View All Forex Brokers
A novel opportunity for Nigerian traders: Trading Forex With Bitcoin
A new opportunity that is also available to Nigerian forex traders and one that is well worth their attention, is trading forex using bitcoin. As cryptocurrencies become more popular and mainstream, an increasing number of brokerages enable their trader customers to trade forex using Bitcoin, offering high leverage for Bitcoin trades, which could be greatly beneficial, especially for experienced traders, since potential profit margins are greatly magnified. Moreover, very often it is possible to start trading forex through bitcoin via accounts that require very low deposit amounts, thus truly rendering trading accessible to all. Accessibility is further enhanced by the low trading and brokerage costs applied by forex brokers accepting bitcoin in order to attract new customers. Besides being more affordable, trading forex using Bitcoin is also a type of transaction that truly knows no geographical boundaries, as it is perfectly possible for a trader based in Africa to be trading via a brokerage based in Europe or anywhere else.
Admittedly, cryptocurrency trading and transactions still carry an inherent element of risk, that is perhaps greater than other transactions, however, if traders tread carefully this type of trading holds a great promise and potential of gains and profits.
Due to the sheer size and liquidity of the forex sector, online forex trading is potentially a highly lucrative endeavor, and Nigerian traders seeking to supplement their income in a way that has proven to be resistant and pandemic-proof should closely examine the possibility to embark on their own forex trading journey. Though the sector is still in its nascent stage in Nigeria, the landscape and ecosystem are rapidly growing and developing, offering ample opportunities for interested Nigerian traders. For as long as there still remains a lack of a regulatory framework for online forex trading in Nigeria it is however important for Nigerian traders to make careful choices, especially when selecting their preferred brokerage, ensuring it is reputable and trustworthy.
FAQs on Forex Trading in Nigeria
What Payment Options Are Available to Nigerian Forex Traders?
All traditional payment methods that are usually available to traders from other countries, are also offered to Nigerian residents. Besides being able to use their debit or credit cards to fund their trading accounts, Nigerians many also use e-wallet services such as PayPal, Skrill or Neteller, or make their deposits and withdrawals using their bank account and direct bank transfers. The time needed for completing each deposit or withdrawal will depend on the method chosen to perform it.
Do Forex Traders Pay Tax In Nigeria?
Despite its recent increased popularity, Forex trading in Nigeria is still largely unregulated. Nigerian residents are thus reasonably safe provided they trade through reputable international brokerages and take care to manage their own funds well. Currently there is no specific taxation regulations for forex in Nigeria, however any profits made may be classified as capital gains and thus should be declared and taxed accordingly when one submits their Personal Income Tax Return.
What is the best Time to Trade Forex in Nigeria?
Though they can trade round the clock as a forex market is open somewhere in the world at any time due to time zone differences, Nigerian forex traders are perhaps better off trading during the opening hours of the London session, as this is the time when liquidity for the major and most traded currency pairs is at its highest. This time is best for day trading since it is usually easier to recognize common trends, while there are ample chances for closing trades profitably in a short time during this period.
Which are the best forex brokers in Nigeria for beginners?
If you are a Nigeria-based beginner forex trader then you must seek for brokers that are reputable and trustworthy, offering you a demo account and educational resources so that you can learn and practice before you risk any real funds, while also offering you commission-free live trading accounts with tight spreads. Thankfully, there are several such brokers currently serving Nigerian customers and you can easily browse our site to find out who our own recommendations are.
How much do you need to start trading forex in Nigeria?
If you are just starting and are a complete novice then it is best if you begin your forex trading endeavour with a low capital and then increase that amount as you go along and acquire more experience and skills. Thankfully, nowadays, there are several forex brokers which will allow you to start trading with very low minimum deposits, while it is also important to ensure that you only invest money that you can afford to lose and avoid investing more than 5% of your available capital on any single trade.
Is Forex Trading Profitable?
The truth is that forex trading may potentially be highly profitable and lucrative, though one must always remember the increased inherent risk involved. Forex trader who approach the endeavour with caution and the right mentality stand a good chance of making some good money, will profits may prove impressive for those with the necessary experience and skill, adopting a risk-averse approach. The profit potential is indisputably high for those with the right skill set and depending on the amount of their invested capital.