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Forex Trading in Nigeria Continues to Rise in Popularity

14 February 2024 10:05, UTC

Forex trading has been steadily gaining popularity in Nigeria over the years. People are looking at the opportunity to trade currencies from around the world with the potential to earn a profit. Both newcomers and experienced investors can participate in the speculative trading of currency pairs. Notably, there has been increased access to online trading platforms in recent years. The number of Nigerian forex brokers is on the rise as they take advantage of this growing market.

In this article, we will look at forex trading in Nigeria and why it continues to rise in popularity over the years. We are also going to look at how new traders can choose a forex broker to invest in.

The Current Trend of Forex Trading in Nigeria

Each month, Nigeria sees a growth in the total number of people participating in the forex market. There are new investors entering the financial markets including cryptocurrencies, indices, commodities, stocks, and most importantly, forex. In recent years, the forex market has grown and developed significantly. According to some estimates, the country has over 200,000 active forex traders.

This makes Nigeria one of the top countries in Africa with the most forex brokers. Consequently, this country is seeing a surge in the number of forex brokers that operate in it. There are various factors that are leading to the rise in the popularity of forex trading in Nigeria. Below are some of the factors in detail.

Increased Accessibility

Investing has undergone a revolution in recent years due to the development of technology. Through mobile phones and the internet, people can now trade more easily from wherever they are. What’s more, brokers also contribute to this accessibility by providing trading apps to fit all kinds of devices including PCs, Tablets, and Mobile Phones. As various devices become more affordable, access to financial markets expands.

Access to resources like social trading, powered by technology, gives new traders more confidence as they enter the market. This makes the onboarding process a little easier for investors. Traders can interact with each other, sharing strategies, and news and copying the trades of more successful traders on different platforms. Furthermore, this creates a sense of community and support which is helpful for the more timid investors.

Youthful Population

Nigeria’s youthful population is on the rise over the years. Normally, financial markets are more desirable to nations with younger populations, and Nigeria is one of them. Many young people in Nigeria are increasingly drawn to online trading as a way to make money and gain financial independence. It is possible that most young people in Nigeria do not enjoy living in an unstable economic environment. This population of young people is responsible for driving the popularity of forex trading in Nigeria upwards.


A high rate of unemployment is one of the biggest problems in Nigeria today. In such situations, people naturally look for alternative ways of making money without relying on employment. Forex trading is one of the places people look to when employment opportunities become scarce. Many people are now investing in forex as a way to produce and maintain a steady income.

Social Media and Education

Social media and online educational resources have played a significant role in increasing the popularity of forex trading online in Nigeria. Specifically, these two increase the awareness and knowledge of individuals seeking to invest in forex. For starters, social media platforms act as online discussion boards for traders to share information. Moreover, many forex brokers now have a social media presence in an attempt to market themselves and increase the visibility of their brands.

Additionally, most reputable forex brokers now feature an education section for both beginners and seasoned traders. Here, traders can find useful material covering different levels, from introduction all the way to technical analysis and risk management. This enhances investors’ confidence and encourages long-term participation.

Alternate Source of Income

The unemployed are not the only people investing in the forex market. Employed individuals also see forex as an additional revenue source to improve their living standards. Unlike other financial markets, the forex market runs all day long. It is a 24-hour market with different sessions throughout the day for five days a week. As such, some people can participate in trading in their after-hours free time. They can also invest passively using EAs or copy-trading systems.

What Platforms Do Nigerian Traders Use?

There are many online platforms that Nigerian traders are using to place their orders in the forex market. Fortunately, technology makes it possible for traders to invest from wherever they are so long as there is Internet access. Additionally, many forex brokers provide trading platforms that are available on all kinds of devices including mobile phones. Some forex brokers even offer Nigerian traders Naira-based accounts for increased convenience. Still, it is more important to consider the regulatory status and the reputation of a broker before choosing to invest with them. So what does the regulatory framework governing forex trading in Nigeria look like?

The Regulatory Framework of Forex Trading in Nigeria

The regulatory status of a broker is probably the most important thing to look at before investing your hard-earned cash. In Nigeria, the Central Bank of Nigeria and the Securities and Exchange Commission of Nigeria are in charge of keeping the trading environment fair and legal for both brokers and traders. Notably, these two organizations have been operating in this capacity for years now. However, there aren’t any brokers under the supervision of any of these bodies.

As such, Nigerian traders can prioritize brokers that have reputable regulations elsewhere in the world. They can choose brokers under the regulation of the FSCA in South Africa, the CMA in Kenya, the FCA in the UK, the CySEC in Cyprus, and the ASIC in Australia. Traders should be cautious when trading with companies with lacklustre regulations or unregulated companies. Such companies are most likely to defraud investors off of their hard-earned cash.

Benefits of Trading Forex in Nigeria

  • Forex trading is flexible as traders can be anywhere as long as they have an Internet connection and a device that can access broker sites.

  • The forex market allows people to diversify their investments as they can invest in many currency pairs at once. This can help investors manage risk and maximize potential returns.

  • With leverage, traders can control larger investment positions than they would if they placed orders using only their own cash.

  • Traders can invest at any time as forex is a 24-hour market except on weekends. This means traders can invest at the most convenient time for them.

  • People can earn a profit by trading forex whether as a main source of income or as a secondary source of revenue.

The Risks Involved in Forex Trading

  • While there is the opportunity to make profits, there is also a chance of suffering massive losses.

  • Trading with leverage can expose traders to more risk than when trading with their own capital.

  • Unfortunately for Nigerian traders, regulations on forex trading are slacking at this point. This raises the risk of investors falling victim to scam brokers.

  • The learning process can be frustrating for new traders and involve heavy losses.

Tips For New Traders

Achieving success in the trading world can be quite challenging for newcomers, especially with the abundance of fraudulent forex operations targeting unsuspecting individuals. Here are some recommendations to enhance the survival prospects of new traders in the forex arena.

  1. Prioritize Regulation: Always opt for a regulated broker. Although regulations alone are not a guarantee, they significantly enhance your safety compared to dealing with an unregulated entity. It’s crucial to choose a broker under the oversight of a respected regulatory authority. In South Africa, for instance, the Financial Sector Conduct Authority (FSCA) serves as the primary regulator. Companies regulated by reputable authorities in Europe, Australia, and the USA are also considered much safer options.
  2. Educate Yourself: Dedicate time to comprehending the inner workings of the market. Gaining an understanding of what influences specific currency movements can significantly enhance your trading strategies. While there is no infallible strategy in the market, acquiring a deeper knowledge of the market can help traders refine their approach.
  3. Manage Risk: Never invest money that you cannot afford to lose. Trading with funds beyond your financial comfort zone is a recipe for financial disaster.
  4. Seek Mentorship: Learning from more experienced traders is invaluable. Brokers that support social trading and copy trading can provide new traders with valuable insights as they navigate the complexities of the market.
  5. Start Small: While you figure your way around the complex market, it is wise to start investing small before risking large amounts of money. You can always increase your capital once you gain more experience and confidence.
  6. Keep Your Emotions in Check: Any experienced trader will tell you that emotional trading can lead to poor decision-making. Staying disciplined and avoiding chasing after quick profits is one of the most important skills for any trader.

Final Remarks

Forex trading in Nigeria is seeing remarkable growth in popularity. This growth is driven by increased popularity, a youthful population, high unemployment rates, increased awareness through social media and education, and the need to seek an alternate source of income. While there are various benefits of trading forex, it is important to recognize the risks involved.

To thrive in forex, aspiring Nigerian traders should prioritize regulations and the reputation of a broker before investing with them. Additionally, they should educate themselves, practice proper risk management, and seek to learn from more experienced traders. With the right approach, discipline, and continuous learning, forex trading can offer a path to financial independence for Nigerians. Nonetheless, it is crucial to remember that success in forex trading does not come overnight. As such, traders must prepare to handle both the highs and lows of this dynamic market.