Why Currency Trading is Gaining Traction in Nigeria - by Olumide Adesina

Editor's note: In this article, financial market expert, Olumide Adesina discusses some of the reasons currency trading is becoming very popular in Nigeria.

Nigeria, like many other countries in the world, has experienced a boom in currency trading in recent years.

There are several reasons for this. For example, currencies are becoming more accessible and easier to understand, and investors want to expand their portfolios.

Forex trading is no longer just for financial and investment professionals; it is now a coveted slice of the investment pie for retail and unsophisticated investors.

Forex trading has been popular in Nigeria for the past two decades. This is primarily driven by increasing internet accessibility and the rise of online trading platforms.

Read also

"I don't know what to do with it": Nigerian man with N1.5 million cash begs for business idea

Nigeria’s tech-savvy youth quickly embraced the concept of foreign exchange trading through online platforms.

This boom was fueled by brokers who lured traders with promises of large profits and the pursuit of financial independence for young people. Additionally, some brokers offer special features that are attractive to Nigerians.

For example, the Exness trading platform allows Forex traders to invest with negligible manageable fees. Forex trading is one of the most common asset classes for traders and investors.

Although Forex has a reputation for being risky for short-term speculators, there are trading styles that suit both short-term and long-term traders.

As a currency trader, you are in control of your finances. It's also a way to earn extra income. Traders can earn large amounts of money from trading with a "small" amount of investment. Trading also exposes you to financial markets and current events. It also teaches traders to be disciplined.

Read also

Asia tracks global losses as stock traders step back after rally

The market is very liquid, and trading volumes are high, so there are many options. Buy and sell at your convenience with just one click. This is because there is usually someone on the other side to do the exchange for you.

The main advantage of Forex trading is that the market never closes. With something like stocks, you must wait until the bell rings and the stock market opens if you want to act, but forex never sleeps, and you can trade anytime.

Another reason why Forex is so popular in Nigeria is the variety of trading strategies on offer. Unlike stocks, where you buy and wait for a profit before selling, forex trading gives you more control over your investment.

Foreign exchange transactions are conducted over the counter, with foreign exchange dealers working directly with market participants such as market makers and banks. Therefore, there are no exchange or clearing fees when trading stocks, ETFs, and bonds.

Read also

New year gets off to a weak start as traders eye rate cuts

For foreign exchange trading, there are no such fees. Forex market makers typically do not charge fees for forex trades made through their forex trading platform.

Foreign exchange trading in Nigeria remains unregulated, even though the current market is one of the most active in all of Nigeria.

Unlike stock trading, there are no fees for trading in the foreign exchange market. There is no regulatory oversight over it, and current pricing is based on supply and demand from Forex traders.

• Olumide Adesina is a Financial Market analyst at Quantum Economics

Source: Legit.ng