Forex Trading in Nigeria

Forex Trading in Nigeria: Beginners Guide

Forex trading in Nigeria is very lucrative. This beginner’s guide to Forex trading in Nigeria will help you move from a beginner to a professional in forex trading in Nigeria. Starting with a demo account is strongly recommended for newcomers to the forex industry.  In forex trading, the higher the profit, the higher the risk.

Forex Trading in Nigeria: Beginners Guide


Forex Trading in Nigeria: Introduction

Forex trading in Nigeria – all you need to know.

What is Forex Trading

The foreign exchange market is a worldwide decentralized or over-the-counter market for the trading of currencies. For each currency, this market sets foreign exchange rates. It covers all elements of purchasing, selling, and exchanging currencies at determined prices or current prices.

Forex trading is the purchase or sale of currencies. For a multitude of reasons; banks, central banks, corporations, institutional investors and individual traders exchange foreign currency, including balancing the markets, promoting international trade and tourism, or making a profit.

Forex brokers in Nigeria.

Forex brokers are companies that provide a platform for traders to purchase and sell foreign currencies. In this industry, transactions are always between a couple of two distinct currencies, so either forex traders purchase or sell the particular pair they want to trade.

Forex brokers may also be regarded as retail forex brokers or brokers for currency trading. Most forex broker companies only manage a very tiny part of the total foreign exchange market volume. Retail currency traders use these brokers for speculation reasons to obtain access to the 24-hour currency market. Major companies such as investment banks also provide Forex broker services to institutional clients.

Apparently the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) are the bodies who have the power to establish a regulatory framework for trading in OTC derivatives. After the bill is drafted by their representatives, it has to be approved by the national assembly and the President in order to become a law. All of these steps are expected to take at least 2 years.

Currently, however, there are no specific rules governing online foreign exchange trading in the country Yet, it is not illegal, and Nigerian residents are targeted by many brokerages, as their demand for financial services is growing and the local market is promising as any emerging one. In fact, many foreign forex brokers already have physical presence in Nigeria, including InstaForex, Alpari, AvaTrade and FXTM.

At present the brokers with the greatest market share in this country are FXTM, HotForex, InstaForex, Liteforex, Alpari, FxOpen and MTrading. Only two of them hold a license from a reputable financial regulator – FXTM is regulated by CySec and FxOpen is regulated by ASIC and FCA. FxOpen however runs also an unregulated forex brokerage, registered in a small island in the Caribbean Sea.

How to start Forex trading in Nigeria

Forex trading is a practice which entails skill, excitement and a strong perception of the financial markets. It involves exploring the economy in depth, identifying and grabbing opportunities and having a strong sense of control over your actions. It also involves a high element of risk; this is why as a newcomer to the forex industry, one should always take baby steps before walking and learn how to walk before running. And there’s no better way to do this than to start trading on a demo account.  Trading on a demo account is how to start Forex trading in Nigeria.

Forex trading demo

Almost all Forex trading platforms have demos which help beginners to learn how to trade. Trading requires so much experience and knowledge to avoid loss. We strongly recommend you start with Forex trading demos.

How do I open MetaTrader demo?

Please Note that:

This procedure is meant only for the clients who are not registered in Profile.

To Open a MetaTrader 4 Demo Account follow these 5 easy steps:

1.  Download MT4 Platform and install it on your PC.
How to start Forex trading in Nigeria – Download MT4 Platform
How to install MT4 Platform for forex trading in Nigeria
How to start Forex trading in Nigeria – Install MT4 Platform

2. Run the MetaTrader 4 Platform on your PC

How to start Forex trading in Nigeria – Run the MetaTrader 4 Platform on your PC
3. Enter personal details
  • Click on “File” of the main menu. A drop-down menu will appear.
  • Select “Open an account” from the there to call out the first window of the account opening procedure: “Personal details”.
  • Fill out the fields and tick “I agree to subscribe to your newsletters” check-box.
  • Press “Next” to continue.
4. Select trading servers

Select the appropriate demo server and press “Next”.

5. Registration
How to start Forex trading in Nigeria - Select demo account type
How to start Forex trading in Nigeria – Select demo account type

A new pop-up window “Registration” will appear containing your account’s credentials which you need to keep in a safe place:

How to start Forex trading in Nigeria – Enter personal details

Make sure you saved this information and press “Finish” to close the pop-up window and resume the procedure.

How to start Forex trading in Nigeria – Demo account opened

You will be automatically logged in to your newly opened demo account.
Before taking any practical steps, you can gain theoretical knowledge using these links.

How does a demo forex account work?

A forex demo account is a practice trading account funded with virtual money. While you can register for a demo account at any time, trading the demo account is typically limited to the market hours each instrument is available for trading. The demo environment is identical with the live setting in this respect.

Forex is a fluctuating and often volatile space, with currency pairs constantly on the move. That is why many brokers are providing traders with a demo account to practice first without depositing funds. Demo accounts are great for beginners, or for traders that are new to the broker to test out their platform and familiarize with it. It is also excellent for intermediate or advanced traders that want to test run their new strategies without first committing real capital.

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What is the best forex demo account?

The following are outstanding forex brokers and their forex demo account platforms have been rated as the best by several reviewers.

  • IFC Markets
    • IFC Markets is a leading brokerage company in Forex and CFD markets, which provides world class services with number of significant and unique advantages. Some of the instruments are exclusive and offered by IFCM only.
    • IFC Markets has been stably operating since 2006 in full compliance with international standards for brokerage services. IFCM Group companies are regulated and licensed by various international certificates:
      • IFCMARKETS. CORP. is regulated and licensed by BVI FSС, Certificate No. SIBA/L/14/1073C.
    • IFCMARKETS. CORP. holds Professional lndemnity for Financial Institutions Insurance in AIG EUROPE LIMITED.
    • IFC Markets offers you full range of trading instruments:
      • Forex – Major, Minor and Exotic currency pairs
      • Stocks – Stock CFDs from the most popular Stock Exchanges
      • Precious metals, including unique Gold instruments
      • CFDs on Commodity Futures and Indices

Best Forex Brokers in Nigeria

Relatively few online brokers base their operations in Nigeria. Many of the forex brokers based in the country have little or no oversight by either the Central Bank of Nigeria (CBN) or other regulatory agencies, so trading through them would not be recommended (though some of them has passed the test of time). Your best bet would involve choosing an international forex broker that accepts clients from Nigeria and also has oversight by one or more of the major forex regulators. If you’re based in Nigeria and want to trade through the best possible forex brokerages, bear in mind that forex brokerages are not all created equal. Carefully consider your trading needs and make sure they’re adequately met by a forex broker before you commit any funds by opening a live forex trading account with them.

Forex trading terminologies

Every forex trader needs to know the meaning of the following terms used in forex trading.

Exchange Rate

Exchange rate is the value of one currency expressed in terms of another. For example, if EUR/USD is 1.36200, 1 Euro is worth US$1.3620.


In Forex trading, a PIP or pip is short for ‘percentage in point’ and is a measure for exchange rate movement. The pip is a unit – a numeric value that ultimately measures profit and loss. For example, 1 pip for the EUR/USD = 0.0001 and 1 pip for the USD/JPY = 0.01. .

Pip is the smallest increment of price movement a currency can make. Forex traders will often quote the movements, profits or losses in pips. For example, stating something like “I made 50 pips on today’s trade” or “the EUR/USD has just gained 20 pips in the last two hours”.


A spread is the pip difference between the bid and the ask price of an underlying asset. As it is essentially the cost of making a trade, it is important for Forex traders to know what spreads are. To find the spread, we minus the Bid (Sell) Price from the Ask (Buy) Price.
Spread = Buy Price – Sell Price. Thus, Spread simply the difference between the sell quote and the buy quote or the bid and offer price

The MT4 Trade Terminal will show the spread quoted in pips between the two prices. 


Leverage is the ratio at which defines the loan amount, “margin”, that traders are allowed to use to gain access to larger sums of trading capital. Leverage is the ability to gear your account into a position greater than your total account margin. Leverage can heighten both profits and losses and should be used wisely. Due to the nature of leverage, some forex providers have strict leverage restrictions in place to assist traders in minimising risk.

Let’s look at a numerical example:

For instance, if a trader has $1,000 of margin in his account and he opens a $100,000 position, he leverages his account by 100 times, or 100:1. If he opens a $200,000 position with $1,000 of margin in his account, his leverage is 200 times, or 200:1. Increasing your leverage magnifies both gains and losses.

To determine the leverage used, divide the total value of your open positions by the total margin balance in your account. For example, if you have $10,000 of margin in your account and you open one standard lot of EUR/USD (100,000 units of the base currency) for $100,000, your leverage ratio is 10:1 ($100,000 / $10,000). If you open one standard lot of EUR/USD for $150,000 (100,000 x EURUSD 1.5000) your leverage ratio is 15:1 ($150,000 / $10,000).


In Forex trading, a margin is required to trade. The deposit required to open or maintain a position is known as margins. A margin can be considered as the minimum collateral or deposit. This margin allows you effectively take a ‘loan’ – access to a larger amount of capital.

How to calculate the margin per trade?

An account leverage ratio is used to determine how much margin will be required.

Overall Lot Size / Leverage Amount = Margin Required
Example with 2 lots at leverage of 400:1
200,000 / 400 = $500 margin required

If a trader’s account falls below the minimum amount required to maintain an open position, he will receive a “margin call” requiring him to either add more money into his or her account or to close the open position. Most brokers will automatically close a trade when the margin balance falls below the amount required to keep it open. The amount required to maintain an open position is dependent on the broker and could be 50% of the original margin required to open the trade.


Looking at the MT4 terminal, you will see the term ‘Volume’ appear.

Volume in the Order window refers to the volume to buy/sell.
Volume refers to number of lots whereby 1 lot = 100,000 units
Volume in on the Volume bar in the charts refers to the tick volumes. It counts how many times the price has changed in that period.

Bid and Ask price

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Bid Price – The bid is the price at which the market (or your broker) will buy a specific currency pair from you. Thus, at the bid price, a trader can sell the base currency to their broker.

Ask Price – The ask price is the price at which the market (or your broker) will sell a specific currency pair to you. Thus, at the ask price you can buy the base currency from your broker.

Bid/Ask Spread – The spread of a currency pair varies between brokers and it is the difference between the bid and ask the price.


When you’re trading, sometimes you’ll notice a slight difference between the price you expect and the execution price (the price when the trade is executed). When this happens, it’s known as slippage. It’s a common thing to experience as a trader and it can work either positively or negatively. The main reasons for slippage are market volatility and execution speeds.

Slippage Example

The price of the AUD/USD was 0.9010. After analysing the market, you speculate that it’s on an upward trend and long a one standard lot trade at the now current price of AUD/USD 0.9050, expecting to execute at the same price of 0.9050.

The market follows the trend but goes past your execution price and up to 0.9060 very quickly – within a second. Because your expected price of 0.9050 is not available in the market, you’re offered the next best available price. For the sake of the example, that price is 0.9045.

In this case, you would experience positive slippage:
0.9050 – 0.9045 = 0.0005, or +5 pips.

On the other hand, let’s say your trade was executed at 0.9055. You would then experience negative slippage:
0.9050 – 0.9055 = 00.0005, or -5 pips.

How do I open a forex trading account?

The first thing to do is to choose the forex broker whom you want to open account with. There are many essential things you need to consider. This is because as a Nigerian trader as well as other traders in other countries, you need to find a reliable broker so that your hard earned money can be protected from scammers, money launderers, and various illegal brokers. There are a number of steps you will have to go through which are listed in the section below which explains ‘How to reduce loss in Forex trading in Nigeria’. Follow the links below to open forex trading account.

How to trade Forex in Nigeria

Learn forex trading in Nigeria using this guide; it will reduce losses that beginners usually have. We recommend starting with demo account before trading forex with real money. After you have practiced with the demo account, it is now time to begin the real trading. In this section, we will show you how to trade forex in Nigeria.

Forex currency pair quotes: What does it mean?

It is important you understand how to properly read a currency pair quote before you start trading them. The exchange rate of two currencies is quoted in a pair, for example USDEUR. The wisdom behind this is because during foreign exchange transaction you are buying one currency and selling another at the same time. If you were to buy the USDEUR and the dollar strengthened against the euro, you would then be in a profitable trade.

Let us use this example to clearly show you what currency pair quotes mean.

USD/EUR = 0.75697

From the currency pair quote above,

USD is the Base Currency

EUR is the Quote Currency

In the above example, the exchange rate tells you how much you need to pay in terms of the quote currency to buy one unit of the base currency. Thus you need to pay 0.75697 euro to buy 1 dollar.

If you sell the USD/EUR (or any other currency pair), the exchange rate tells you how much of the quote currency you receive for selling one unit of the base currency. In other words, in the example above, you will receive 0.75697 euro if you sell 1 dollar.

An easy way to think about it is like this: the BASE currency is the BASIS for the trade. So, if you buy the USD/EUR you are buying dollar’s (base currency) and selling euro (quote currency), if you sell the USD/EUR you are selling dollar’s (base currency) and buying euro (quote currency). So, whether you buy or sell a currency pair, it is always based upon the first currency in the pair; the base currency.

The fundamental of Forex trading is to buy a currency pair if you think its base currency will appreciate (increase in value) relative to the quote currency. If you think the base currency will depreciate (lose value) relative to the quote currency you would sell the pair.

Forex trading in Nigeria: Strategies

Forex trading in Nigeria like forex trading in any other country requires strategies. There are some recommended forex trading strategies for beginners, while some strategies are only recommended for advanced traders.

Forex trading Strategies for beginners: Forex trading in Nigeria

Forex trading Strategies for Advanced traders: Forex trading in Nigeria

How much money do you need to open a forex account?

Assume you open an account for $100 (the minimum initial deposit most forex brokers accept). Your risk on each trade is therefore limited to $1 per trade (1% of $100)

How do I open a real account on MetaTrader 4?

To open a real account, you have to go through a broker. You cannot do it through the MT4 terminal. To open real account authorization is required. You need to log in with your username and password. Authorization is connection of terminal to the server through a login and a password. It allows to manage a trading account. Two accesses to the account are possible in the terminal: a normal password and an investor password. Being authorized with the standard password, one gets full rights for working with the terminal. Investor authorization allows you to see the account status, analyze prices, and work with your own Expert Advisors, but not trade. Automated trading by Expert Advisors is not allowed either. Investor access is a convenient tool used for demonstration of trading at the account. Here are links to show you how can open real account on MetaTrader via your brokers.

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How to reduce loss in Forex trading in Nigeria

Losses in forex trading can be prevented by taking the time to learn how to trade the forex markets and by implementing careful money management. The fundamental way to reduce loss in forex trading in Nigeria is through learning and practicing what you have learned. Experience is very valuable in Forex trading in Nigeria and in all other countries.  Most experienced traders apply caution in the use of leverage. This is because leverage can aggravate the loss the same way it can increase profit. Beginners in forex trading in Nigeria should apply less leverage since no trading strategy will guarantee 100% profit.

The main reason why many traders get defeated by the market can be attributed to their lack of knowledge. For every transaction in the forex market, there are winners and losers. Your goal is to make more overall profits than losses over a period of time, and to emerge an overall winner.

Tips on how to become successful in Forex trading in Nigeria

Mental strength

A trader’s mindset is the most important ingredient of success. Whether you are new to trading currencies or a forex trader who has some experience, here are some questions to ask yourself:

Do you really have a strong desire to succeed in forex trading?

Sure, everyone wants to succeed in something, but do you have the desire to want to succeed in forex trading? First of all, this field is not for everyone, for you must have the passion for it. If you just want to try your luck, or dabble, in trading, you will just end up among the majority who lose their money. You must have the deep desire to want to accomplish your goals, because without this desire, your thoughts will not materialise into action, and it is action that could transform your goals to reality. To be a successful trader, you must be highly self-motivated, have a concrete plan of action, and not be afraid of failure.

Are you prepared to devote a lot of time and effort into picking up trading skills and knowledge?

To be really good at anything, you need skills and knowledge in that field. A huge amount of time, effort and money is required for a trader to attain consistent success in forex trading.

Are you willing to accept losses as part of trading?

Everyone makes mistakes, and mistakes are inevitable. Got a trading loss? Then whip out your trading log to record what your mistakes are and what you have learnt from that losing trade. Always have something positive to take away from your losses, and treat it as a learning experience.

Are you willing to take sole responsibility for your trading decisions?

You read some market analysis, and then trade according to what the analyst is saying. That trade turns out to be a loser, and you turn around to blame it on that market report. It is too easy to shuffle blame on others, and say “It wasn’t me/my fault.” It is fine to read about other people’s opinions about the market, but make sure that you do your own analysis of the market, which you will gradually learn to do so with confidence if you are still relatively new to forex trading.

Control your fear and greed

Fear and greed are two side of a coin in forex trading. Greed can be said to be a form of fear. The two emotions come to play while trading forex. You should know that the two emotions must surely exist. You cannot prevent it, but you can control it. If you do not control fear and greed, fear and greed will control you. When fear and greed sets in, logic is subdued. If greed sets in, you will tend to buy more despite the fact the result of your analysis of the market might warn you to be cautious in buying.  The same is with fear. When fear overwhelms you, you will not know when to pull the trigger.

For you to be a successful trader, your will have to master how to control your fear and greed. Do not allow any loss in trade to weigh you down. Look at the big picture. Losses must surely occur but your ability to focus on the big picture is what matters. After every loss, be positive and analysis the transaction and find out what you did wrong and learn from it. Always aim at making more wins not at preventing losses. Keep the winnings high and the losses low. Then do not allow your greed or fear to control you. You need to take charge. Control your greed and fear. That is the key.

Money Management skills in forex trading

It is an acceptable fact among professional forex traders that the ultimate factor that will affect overall profitability of a trader who has mastered his or her trading skills is money management skills. This is to tell you how important money management is. For you to become successful in forex trading in Nigeria, you must be very good in money management.

Managing the possible risks summarizes money management.  Money management is the defining factor that separates winners and losers in forex trading. People who are new to forex trading think of how much they can gather from the market; skilled traders think of how much they can lose to the market.  The greed to make big money makes many traders to totally forget money management. Poor money management is the reason why numerous traders get wiped out by the market. Money management’s first goal must be to ensure long-term market survival, because if you don’t survive another day to trade, you can totally forget profit.

Management of money is about optimizing your trading assets to the full. It allows you to be proactive in managing risks and cope with losses from trading – which are part of the game. It’s an important instrument to make sure you’ve got more than enough to last in the trading game another day. A trading scheme that produces 90 percent precision, will still ends up losing if the trader does not correctly manage his or her cash and portfolio.  No matter how nice a trading scheme may be, you will face a number of losses at times. Success comes to those who set money management guidelines and have the discipline to follow them through their trading.

Forex trading Method/strategy

In every business, people aim to develop a perfect system that will guarantee no loss. The same is so in forex trading. New comers and near-new comers always seek the perfect formula that will predict the movement of the market with 100% precision. The truth about it is that there is no formula that is 100% accurate. Learn the strategies we have shown you above. Practice it and use it. You will get an overall success in your trading.

On a final note, you need to combine Method with both Money and Mind (mental strength) in order to attain success in the trading business.


Forex trading may make you rich if you are a hedge fund with deep pockets or an unusually skilled currency trader. But for the average retail trader, rather than being an easy road to riches, forex trading can be a rocky highway to enormous losses and potential penury. Most of you who are here may not have much fund to invest so you are left with the option of being unusually skilful in currency trading. Follow all the steps we have shown you above and continue self improvement. This is the only way you can succeed to become rich through forex trading.