How to trade forex in Nigeria

Forex Trading Nigeria

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Posted by on Tuesday November 27, 2012 12:59:58:

When it comes to online currency trading in Nigeria, lots of people are into it and many more are still entering into it with a view to making more money.

Who trades forex
You'd find that most of those involved in trading forex are made of three groups of people:

1. Those who already have a regular source of income - but looking for higher sources of income
2. Those who are trading out of their savings: such as students or job seekers who have time to trade.
3. Successful professionals - Who trade it for a living

Successful Professional forex traders are rare in Nigeria as many people tend to fail or just lose most of their income in their first years of trading. Some who fail to learn from their mistakes keep losing money even after many years.

If you want to trade forex successfully in Nigeria and actually do it for a living, then you need to plan ahead, get the right training and use some of these tips:

Some tips for trading
- Get trained first: Self training or formal training would do
- Decide on a trading strategy
- Maintain proper leverage
- Use a good risk to reward ratio
- Monitor the charts.
- Follow the market trend
- Keep informed of market news

Here is an example
Assuming you are trading a currency like EURUSD, try to use stop loss and target profit that are reasonable to their daily movement if doing day trading. The currency can move like 50 to 80 pips a day so you can set a single or multiple trades depending on how many times you want to risk.

Assuming I have a capital of $1000, I could use the following strategy:

- Risk about 2% per day ie $20
- Trade for 25 days in a month
- Target a gain of 4% per day ie $40.

I could decide to follow the trend by buying or selling whenever the market moves and If I could make a single trade per day or multiple short trades per day.

If I'm making a single trade, then I could set 40 pips target and a 20 pip stop loss. I may also use 30 pips stop loss and 60 pips target all at the same time maintaining a 1:2 Risk to reward ratio. If I win more than I lose for that day, I would be in profit.

You should be able to know when the market is trending or zig-zagging and know how to trade them. I normally prefer trading trends and then closing my trade when it seems there is a reversal coming up.

With a good strategy, you can decide your daily maximum loss and your maximum profit while at the same time maintaining your broker's required margin ratio.