Forex Trading was previously a business the banks and few individuals enjoyed in the past, raking in millions of dollars through buying and selling currencies of different countries. The situation has changed now, trading Forex has been made easier and simple. Forex trading can now be done from the comfort of your home via a computer system that is connected to the internet.
What Is Forex Trading?
Forex Trading is an online or internet based currency trading that involves buying and selling of foreign gaining currencies. This exchange can be done using regulated platforms. Forex Literally means “Foreign Exchange”, and the determinant factor in how strong a currency is, is seen through the countries economy.
As the economy of many countries are not static when compared to each other at any given time, it is no brainier than to realize that the Forex market is not stagnant or fixed at any time as well. It is a highly fluctuating market that is consistently and always changing from time to time (ticks), making it hard to accurately predict the future market.
One thing to know about Forex trading is if a currency’s value rises in your favor, you make profit. If the value goes down or crashes against you, you lose money.
WHAT YOU NEED TO START FOREX TRADING:
Risk warning: You may loose your money as its not suitable for all investors!
1) FAST INTERNET CONNECTION:
Internet rules the world and has made online businesses better. For you to be able to transact in Forex Trading in Nigeria, you need a reliable and fast internet connection. The reason is not far-fetched. Every second counts in Forex trading just like in stock trading, and you need a speedy connection to always be on the flow. Because Forex trading involves quick actions, it will be difficult for you to make profit if your internet connection is slow.
2) HIGH POWERED PERFORMING LAPTOP:
A high powered laptop with top performance at all times is essential for efficient and accurate live performance in the Forex market. Having said that, you will be rather limiting any chance of hitting it big in the Forex market if you use a poor or overused laptop for Forex trading. A lot of losses in Forex trading has been attributed to inefficient and low performing trading devices.
3) STARTUP CAPITAL:
Like any other business in this world, you need money to also start forex trading in Nigeria. It is always advised that you start with the amount of money you can afford to lose.
HOW TO OPEN A FOREX ACCOUNT:
This is actually very easy. To start trading Forex, all you need to do is to open an account with a Forex Broker. The job of the broker is to directly connect sellers or buyers to the Forex market for currency exchange by providing the trader a medium also known as a trading platform and also a leverage to enable retail traders perform transactions in the Forex market. Their role is more of intermediaries between Liquidity providers and retail traders. The following are some of the top Forex brokers:
You can select from any of these Forex brokers which suits your needs best and then fund the account.
TIPS ON HOW TO MAKE PROFIT FROM YOUR TRADING ACCOUNT:
1) Understand the Forex Market:
There is no get rich quick with Forex trading if you don’t follow due diligence and patience. In order to get an understanding of Forex market and earn from it, you have to avail yourself the time to gain a lot of serious training in Forex trading!
You have to be willing to acquire the knowledge, both technical and fundamental, required to trade in Forex. You must keep yourself abreast of the ever changing Forex market, which involves being updated at all times.
2) Start your practice trading with a demo account:
The reason why as a novice you need to start with a demo account, is to help you familiarize yourself with the trading platform and how the various market fluctuations works. Most Forex Brokers offer demo trading. Make use of it.
3) Practice, practice and practice. Nothing beats practice. I recommend a minimum of six months practice.
4)Specialize on particular currency pairs:
Take your time to study certain currencies and understand how they react to and against each other, and whatever fluctuation it creates in the forex market. The best and easy currency pairs at the moment to trade with are the major currency pairs:
a) EUR/USD – Euro/U.S. Dollar
b) USD/JPY – U.S. Dollar/Japanese Yen
c) USD/CHF – U.S. Dollar/Swiss Franc
d) GBP/USD – Great British Pound/U.S. Dollar
e) USD/CAD – U.S. Dollar/Canadian Dollar f) AUD/USD – Australian Dollar/U.S Dollar g) NZD/USD – New Zealand Dollar/ U.S Dollar
5) Watch the news regularly:
This is an extension of understanding how the Forex market works which is also called the Fundamentals. Certain news announcements affects the market. The best example is the current ongoing Trade Wars between the United States and China, between Saudi Arabia and Canada and United States and European Union.
Some internet calendars may alert you in time always if you keep up with their newsletters or whatever outlet they implore to disburse such information. They also tell you the probable severity it will have in the markets. Another useful tool is the Forexfactory calendar which displays actual data against forecast and previous data of high impact economic announcements such as Employment statistics, GDP (gross domestic product), CPI (inflation report), Central Bank Interest Rates, Retail Sales and many more.
6) Start small:
As a beginner, it is wise to start small. Do not get carried away with the euphoria of making millions of dollars that you start thinking you can start huge and hit it off. This is not to underrate your lucky charm, but just a casual warning. You will have plenty of time to make your millions in due time as the market is there 24 hours a day 5 days a week and most importantly as long as each country in the world uses individual currency for transaction., the Forex market has come to stay!
7) Finally, always remain calm especially after losing a trade. Things will usually turn for you, but you must remain calm. You could lose your cool though and end up losing huge money with your biased revenge trading.