What Is Forex Trading and How to Trade It in Nigeria
Forex trading and how to trade it in Nigeria has become a trending issues since the early 2000 and till date it is still enjoy by all who wants to venture into it. But what is the business all about. What is forex and how is it being traded in Nigeria. These are some of the real details you will be finding in this article below.
Foreign exchange, commonly called Forex or FX is he exchange of one currency for another at an agreed price on the over the counter market. It is the world most traded market with an average turnover in excess of $5.3 trillion USD per day. In Nigeria today and other parts of the world, Forex trading has become so popular but how did this trend grow so fast. I would like to take you to memory lane so that you become aware of the history of Forex trading. The forex market is open and traded 24hours a day and 5 days a week with the most trading centers located in New York, London, Tokyo, Zurich, Paris, Hong Kong, etc.
A brief history of the Forex market
I know you will be amazed to read about the history of Forex trade here on our site. In 1876 something like the gold exchange standard was used and implemented. It states that all paper currency had to be supported by solid gold. The main essence here was to stabilize the world currencies by pegging them to the price of the gold. It was a good idea then but this later created a boom bust patterns which ultimately led to the demise of the gold standard.
However, at the beginning of the Second World War, the gold standard was dropped. The world then decided to have a fixed exchange rate that resulted in the use of the US dollar as the primary reserve currency and that it would be the only currency backed by gold. This is what we in history and the financial world called the Bretton woods agreement or system. In 1971, the US ended this policy and this marked the end of the system. This was what led to most global market floating the foreign exchange rates in 1976.
forex trading should never be seen as an avenue for easy money making, infact it is business that has the highest risk. I remember when I started trading in 2011; I was thinking I would make millions in few months but the myths die down when I lost my funds. There are many forex trading platforms like www.forexyard.com, www.alpari.com, www.masterforx.org, www.earnforex.com,
How to Start Forex Trading?
To start trading forex in Nigeria, you will need a computer that has access to the internet and knowledge of how the forex market works. You will need a domiciliary account and a platform where you will deposit your funds and start trading. The most traded currency pairs (major pairs) are EUR/USD (euro for U.S. dollar), GBP/USD (Great Britain pound for U.S. dollar), USD/JPY (U.S. dollar for Japanese yen) and EUR/JPY (euro for Japanese yen).
Forex trading is now accessable to everyone via on-line Forex brokers, which allow trading with almost any amount of money and on a very large variety of international currencies.
How to Learn Forex Trading?
To learn forex trading and trade successfully, you will need to be educated on the basic principles of how the market works. You should study many ebooks about forex trading and get to practice on a demo account.
Possible Problems with Forex
The forex market has a lot of issues and as a new trader you must know that problems may arise. You should remember that the market is volatile at times and full of risk always. A lot of scammers and “experience” forex traders are in Nigeria offering to train you on the basic of the market and charges you as high as N50, 000 for a month. Well it depends on you but have it in mind that the market is real and forex comes with a lot of risk.
EXAMPLE OF HOW FOREX WORKS
The first currency in the pair that is located to the left of the slash mark is called the base currency, and the second currency of the pair that’s located to the right of the slash market is called the counter or quote currency.
If you buy the EUR/USD (or any other currency pair), 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. In other words, in the example above, you have to pay 1.32105 U.S. dollars to buy 1 euro.
I hope I have been able to explain some basic facts about forex trading and it could be fun to start. I used www.forexyard for 2years and got $1300 from an initial $100 deposit but lost all that in 2 days of volatile trading. Well it has been up and down and I bet it could be different game for you if you give it a try.