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Forex Trading in Nigeria

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You’ve probably heard about the latest buzz surrounding forex trading in Nigeria. Those YouTube videos of successful traders earning six to eight figures a month make you want to trade. But you don’t know where to begin.

In this guide, you’ll get to know all the bells and whistles to start your forex trading journey in Nigeria.


Many analysts consider Africa to have the world’s fastest-growing middle class, with Nigeria leading the way.

The fact that Nigeria’s GDP per capita increased from $352 in 2001 to $3,222 in 2014 – a nearly 900 percent increase – is a strong indicator of the country’s growing prosperity. However, since 2014, the amount has dropped dramatically to a little less than $2,000.

Despite Nigeria’s status as a relatively prosperous African nation, most Nigerians agree that making ends meet is not easy. When you combine these challenges with the fact that it is not impossible to come up with some spare cash, it is easy to see why forex trading is becoming increasingly popular.

Forex traders in Nigeria are said to trade positions worth up to $1.25 million per day on average. However, since very few forex / CFD brokerages have a presence in Nigeria, Nigerian forex traders need more unbiased guidance, which can be found in this article.

Getting started

The essential requirements to get started trading forex in Nigeria are the same as in any other country. You should have a computer or mobile device, a secure internet connection, trading funds, and an account with a reputable forex broker. Internet connections and electricity supplies have become significantly more reliable in recent years, especially in urban areas of Nigeria, making forex trading easier.

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What do all beginner Nigerian traders need to know?

1. Terminologies

One of the most common mistakes that new traders make is failing to ensure that they have sufficient forex trading experience. Before entering the forex market, Nigerian newcomers must consult appropriate educational resources to expand their skills.

Learning common forex words and their meanings is a good place to start. This will assist Nigerian traders in comprehending the forex jargon that they will be subjected to when they begin trading.

Among the key phrases that traders are more likely to encounter are the following:

  • The base currency is in which the trader is decided to invest, in this case, the Nigerian Naira. In a currency pair, the base currency appears first.
  • The quote currency is the currency that the trader would buy. The quote currency is always the second currency in a pair.
  • The bid/ask price refers to the price at which the broker is willing to purchase the base currency. The asking price is the sum that the broker would charge the trader in return for purchasing the quote currency of choice.
  • The spread is the difference in price between the bid and ask prices, expressed in pips. The spread is a fee paid by the broker in exchange for a service. There are floating/variable spreads that adjust in response to market conditions and fixed spreads that are set by the broker.
  • Pip is an abbreviation for ‘Percentage in Point.’ It is the smallest observable value of currency changes and the smallest amount by which a price can move. One pip is equivalent to one-hundredth of the trader’s base currency.

In addition, a demo account is an important educational tool. Traders can get them from a variety of brokers. A demo account provides traders with a risk-free platform where they can practice trading in an environment that simulates live trading conditions without losing actual money.

2. Main drivers of the forex market

When new traders enter the forex market, they must understand that various factors influence prices and exchange rates. Among these are, but are not limited to:

  • Central banks reports
  • News
  • Overall market sentiment and other factors

By keeping up to date on news and other reports, traders may more effectively begin to predict what the market can do by using both fundamental and technical analysis to help in trading decisions.

3. Security

It is important to feel secure when trading. Trading is already a complex process that requires a great deal of attention and practice. As a result, investors should at the very least feel secure about their funds when trading. It is also important to note that the time spent trading is not a waste of time but rather an opportunity.

Regulators license brokers in order to ensure the protection and safety of the fund. Even in a country like Nigeria, where there are no official forex regulators, traders must go through the broker’s security review.

The details about the broker’s service should be readily accessible and detailed. It should include the number of market activities, as well as agreements and registrations.

If the information is not available on the website, this could be a red flag that the broker is lying and is trying to steal your money. Otherwise, choose a reasonably well-experienced Forex broker in Nigeria with at least a couple of years of experience operating in the business.

4. Payment Options

Another thing to think about is payment methods. Most brokers should accept traditional payment methods such as Visa or MasterCard. Every broker in every country understands this. There are also other payment types that can be used. Bank transfers and e-wallets are examples of these. Many brokers support e-wallets such as Neteller and Skrill; however, before you begin trading, double-check the payment method page.

Forex trading example in Nigeria

Let’s say NGN/USD is trading at 0.002575/0.002595, and you think the price will increase, so you buy the pair. You want ₦1,000,000. The margin rate of the pair is 4.02%, so you’ll only need $103.92 in your trading account.

The NGN/USD price moves up and is trading at 0.003010/0.003030 after 4 hours. You have achieved a move of 4.15 pips, and your profit is $415.

How much capital do I need to begin trading forex in Nigeria?

There are some forex and CFD brokerages that do not need a minimum deposit and allow Nigerian residents as investors, so you can trade forex in Nigeria with as little as $1.

The problem is that it is inefficient to trade forex with less than $100 or its equivalent due to leverage and currency exchange problems, with most forex brokers not accepting deposits directly in Nigerian Naira.

Due to trade size and leverage problems, even $100 can be troublesome, so anything similar to $500 would undoubtedly perform better.

Nigerian forex regulations

There is no formal regulatory authority for the forex industry in Nigeria, but there is an unofficial one: the SEC (Securities and Exchange Commission).

The Securities and Exchange Commission was established in 1962 as an informal consultative and advisory body known as the Capital Issues Committee under the purview of the Central Bank of Nigeria (CBN). Its mandate was to review applications from companies seeking to raise capital from the capital market and make recommendations on the timing of such issues in order to avoid issues clustering, which could overbalance the market’s potential.

The Committee functioned unofficially within the Central Bank of Nigeria as a financial markets consultative and advisory body with no legislative structure. However, at the time, the Committee was not dealing with Nigerian forex brokers.

Increased economic activity, combined with the codification of the Nigerian Enterprises Promotion Decree in 1972, necessitated the establishment of a body backed by statute to oversee capital market operations, resulting in the establishment of the Capital Issues Commission to take over the operations of the Capital Issues Committee. The Capital Issues Commission was created in March 1973 with the enactment of the Capital Issues Commission Decree.

Best forex trading platforms for Nigerian traders

The best forex trading platforms for Nigerian traders are those offered through forex brokers. The MT4 platform is available at every broker, while some brokers also provide the MetaTrader 5 and cTrader platforms.

Forex training in Nigeria

In Nigeria, many institutions claim to be able to train aspiring Forex traders for trading performance and benefit in exchange for a fee covering the cost of this obvious education.

While a few of these institutions may have good intentions, and aspiring traders’ efforts to invest in a proper trading education are admirable, paying for forex training in Nigeria is not recommended. Simply put, anything you need to know to become a good and profitable forex trader is available for free on the internet.

If you are an aspiring Nigerian trader, you will see a better return from time spent reading through post site and searching through google for good material than you will see from paying fees to Nigerian forex educators.

What is the best time to trade forex in Nigeria?

The time zone is one benefit that anyone trading forex in Nigeria can take advantage of. Nigeria is an hour ahead of London, the global financial hub.

When there is the most volume and liquidity in the market that is the best time to trade forex.

According to studies, the highest volume and liquidity in the forex market arise during the overlap between the London and New York sessions. This means that the best time to exchange forex is between 2 p.m. and 10 p.m. Nigerian time.

This is helpful for most Nigerian forex traders because it means that most will be awake during this time, and it is after regular working hours, which means that Nigerians do not have to give up their regular day jobs in order to effectively day trade forex during peak market hours.

It is obvious that forex trading is legal in Nigeria if you trade your money specifically for your personal profit. This is consistent with retail trade rules in the majority of countries. Increasing capital from third parties for your benefit without a proper license is illegal and, while enticing, can land you in hot water.

Therefore, try not to do anything shady. Just stick with the basics and acquire the necessary skills to accelerate in the forex trading game.

How to choose a forex trading strategy?

Once Nigerian beginner traders understand what they want to accomplish through forex trading and what they are limited to, they can begin researching various forex trading strategies to use while trading or they can create their own.

You must choose the trading strategy in accordance with the trader’s trading style and in accordance with the trader’s trading plan. One of the most important factors to consider when selecting a trading strategy is the trader’s personality.

This is due to the fact that it will be evaluated based on results as well as the accuracy of historical evidence and the strategy’s implementation.

When deciding on a plan, factors such as time management, dedication, determination, and patience, must be considered.

Some of the common strategies include:

a. Scalping

This lightning-fast strategy aims to extract only a few pips from each trade. Scalpers can only keep trade for a second or two before exiting.

You should be familiar with indicators, and you’ll need a quick trading platform and an Internet connection with no lag because timing is everything in scalping. This approach is based on an understanding of how charts shift rather than the fundamentals that drive the long-term movements of currency pairs.

b. Day Trading

Day trading is a traditional trading technique in which you buy and sell a financial instrument over the course of a single trading day in order to benefit from small price movements.

Day trading is another form of short-term trading, but unlike scalping, you usually only take one trade a day and close it out at the end of the day.

These traders enjoy choosing aside at the start of the day, working on their bias, and then finishing the day with a benefit or a loss.

They don’t keep their trades open overnight.

c. Swing Trading

Swing trading is a medium-term trading strategy used by forex traders to benefit from price fluctuations.

It is a trading style that requires patience in order to hold trades for several days at a time. Swing trading is a trading style that exists between two other common trading styles: day trading and position trading.

Swing traders detect potential trends and then keep the trades for an extended period of time, ranging from two days to several weeks.

It is perfect for those who are unable to track their charts during the day but can devote a couple of hours to market analysis every night.

d. Positional Trading

Position trading is the most long-term trading, with trades lasting from many months to several years!

Position traders ignore short-term market fluctuations in favour of identifying and profiting from longer-term patterns.

This is the sort of trading that is most similar to “investing.” The key distinction is that “investing” typically means holding long positions in markets other than forex.

This form of forex trading is only for the most patient traders and necessitates a solid understanding of the fundamentals.


Is forex trading permitted in Nigeria?

Forex trading is unquestionably legal in Nigeria, as long as you trade your own money for your own profit.

When can I trade forex in Nigeria?

Since Nigeria is an hour ahead of London, the best time to trade forex is generally during the London/New York overlap and later the New York session. So, the best time to trade forex in Nigeria is usually between 2 p.m. and 10 p.m. local time. In any case, the Nigerian forex market is open from very early Monday morning to late Friday night.

How do I get started with forex trading?

Calculate your starting money, which should be at least $100 if you use a broker that offers micro lots or $10 if you use a broker that offers nano lots. Then use this guide to find the best forex broker and start your trading journey.

Is it profitable to trade forex in Nigeria?

According to data, while approximately 72 percent of retail forex traders fail to generate profit, the 28 percent who are profitable do so by employing tested, profitable trading strategies in a disciplined manner.

Which African countries are known for forex trading?

Pros of forex trading in Nigeria

Start with a Low Investment: You can begin trading in the forex market with as little as NGN 1000, as brokers now have very low minimum deposits and very high leverage. However, it is strongly advised that you begin trading with a capital of at least $1000 and never lose more than 5% of your capital on a single trade.

Large Trading Volume: The forex market is the world’s largest, with a daily trading volume of nearly $5 trillion USD. This makes it very liquid, and you can quickly position and close large orders without worrying about market fluctuations as a result of your trade (except there is some major event).

Buy/Sell: To make a profit in forex, you can open a short or long trade. If you believe a currency is about to rise in value, you can buy it and go long. If, on the other hand, you believe a currency is underperforming, you can sell it and go short.

Operates 24 hours: Another significant advantage to forex trading is the freedom to trade 24 hours a day, five days a week. These trading hours are much longer than those of conventional stock markets, which only allow you to position or close orders during restricted trading hours. Rather than waiting for the markets to open during the day, you can position trade and close it at any time during the week in forex. You may want to read our guide on the best time to trade forex in Nigeria because gains are more likely during those hours.

So many pairs: Another major benefit is that forex trading allows you to trade in a wide range of currencies from around the world. This includes the traditional major currencies such as GBP and USD as well as exotic ones such as SEK and MXN.


Leverage: Almost all forex brokers have extremely high leverage, up to 1:1000 in certain cases. This means you can put a trade worth $1000 (1 Micro Lot) in the market with just $1. However, using high leverage puts your trading capital at risk of rapidly depleting with a single bad trade. Assume you have $100 in your trading account and use 1:1000 leverage to position one standard lot buy trade on EUR/USD. In this case, you might lose your entire investment if the price moves just ten pips against you. We recommend that you use good risk management and never risk more than 5% of your trading account on a single trade.

Bad Brokers: Many forex brokers out there lack transparency and are not even supervised by any Top Tier regulation, though they may show some Offshore regulation to convince customers that they are regulated. You should avoid brokers who promote forex as a get-rich-quick scheme. Choose a broker who is supervised by government bodies such as the FCA, ASIC, CySec, and others, has years of experience, has positive feedback, and is straightforward in dealing with any concerns.

Risk of Volatility: A wide range of factors, including political and macroeconomic, and microeconomic factors, can influence the value of currencies, causing extreme volatility, especially for non-conventional currency pairs. Unfortunately, you have no power over these factors. As a result, it is critical to keep an eye out for any news before entering or exiting a trade and have strict stop-loss limits to minimize losses in case of sudden news.

Emotional Stress: Let’s face it: forex trading can be highly emotionally exhausting. One bad trade can result in large losses, and coping with losses can be difficult. You can experience emotional distress as a result of this.

Bottom line

Forex trading in Nigeria has become more accessible over the last decade, which has also seen a period of strong economic growth and increased incomes for many Nigerians.

If you are a newbie and want to hop on the forex train, this guide can help you a lot. If you don’t understand anything, reread the guide, you’ll get all your answers.

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