Is Forex Trading Profitable in Nigeria?
Is Forex Trading Profitable in Nigeria? Dizzy with the multimillion-dollar profits of Warren Buffett? Or do you think that trading on the stock exchange is nothing more than a scam and fraud? To help you puzzle out the question, we have put together a short guide for beginners and those looking to choose a reliable investment platform.
Pros of Trading
Stock trading can really be profitable. The only prerequisite is that you take it seriously — as a job. And like in any business, there is a whole pack of pros:
. The possibility to manage all the affairs online — No need to go to the office or adhere to the schedule. You can trade at home, in the park, on vacation; the main thing is to have a stable Internet connection.
. Lack of bosses — No one commands, rolls the nickels, or issues assignments. You are the only boss, and it is you who gives orders.
. Lack of competition and work monitoring — You can decide how much you want to work. Nobody will scold you for low profits. There is no need to compete with other employees or try to come up with more effective work tactics.
What is more important, you can start trading on Forextime with minimal investments. The market is rather flexible, so everyone can enter with the bid that works best for him.
9 Most Common Mistakes
Although online trading on MetaTrader 5 in Nigeria is rather profitable, more than 90% of traders lose investments. This is most often due to the mistakes they make. Let’s take a look at the most common missteps of all traders.
1. Lack of Money Management
The first mistake most beginners make is using most (or even all) of the deposit in the first trade. Thus, even experienced traders with multi-year profits experience a series of losses. The golden rule of risk management is that losses from a transaction should not exceed 3-5% of the deposit. There are additional nuances (decreasing trade size, etc.), but these are studied when mastering trading.
2. Small Deposit
Any broker has a minimum trade size (usually 0.01 lot). Few companies offer so-called “cent accounts” with such a small lot. With a small deposit ($100 — $200), it is very difficult to keep within the risk management. At this point, most beginners can not stand it and begin to increase trades in order to earn more. A reasonable amount for trading is at least $1,000.
3. Lack of Training
Stock trading in Nigeria begins with entering transactions without a system, without understanding what is generally happening on the market, how it all works. Thus, you are in danger of a couple of successful but random deals that are then followed by a massive series of failures. That’s why people say that the broker is playing against them. In fact, this is not necessarily an indicator of the broker’s dishonesty. In 90% of cases, the deal was simply opened at the wrong moment and the rate reversed.
4. Wrong Attitude
Many beginners treat trading like a guessing game, like a game of chance. If the rate goes up five times, it means that now it will definitely go down. No, not exactly. After five short climbs, it can also jerk upward if circumstances are favorable for this trend.
5. Excessive Emotionality
This refers to not only beginners but also to experienced traders. Several successful deals can make you believe in your “infallibility.” As a result, you can start making missteps. A series of losses may “force” you to increase your trade size in order to get your money back.
6. Lack of Strategy
Only having a clear strategy with a full understanding of when and what to do will keep your head cool, even if several of your positions are unprofitable.
7. Using Untested Strategies
The most tricky side of stock trading is following untested strategies. And the point is not even that the strategy can fail. A specific strategy can work for a specific currency pair, a specific time range, even for specific days. Each strategy needs to be tested individually on a demo account. It is recommended to run it through at least 100 transactions. Then collect statistics and decide whether this strategy suits you or not.
8. Using Wrong Signals/Robots
Stock trading is quite tempting in terms of employing ready-made automated solutions — no training is required, and profits are guaranteed. Although the sellers of such strategies position them as a win-win, it is still better not to trust them.
9. Choosing Just One Strategy
Some people prefer the Elliott wave; others vote for candlestick analysis, technical or fundamental. According to trading reviews, it becomes obvious that you need to look at all the available options, without being limited to one tactic only. Use all the available data sources and analytical charts. For example, any analysis can fail when important news is released. If your strategy does not account for news trading, it is better to wait.