Foreign exchange trading or currency trading entails trading of currencies from two different countries against one another. Not only currencies can be traded though, but this decentralised market also allows trading of Bonds, energy, indices, cryptos currencies, commodities, stocks, shares etc.
Forex trading is done in a decentralised global market, making transparency and security a major relevance. Foreign exchange trading in Nigeria is not regulated even though the market is most active across Nigeria.
Since it has not been regulated this high liquid & volatile market does not attract any charge because current pricing is carried out based on supply & demand of currency traders.
In order for individuals to gain access to this global market, two tools are required namely;
Forex broker is a firm that gives its client access to the foreign exchange market;
Forex brokers operate as a Middleman between you(client) and the market. One key Factor in being successful in Fx trading is choosing a good broker.
This article would explain extensively crucial things to consider when choosing a broker and Best Forex brokers in Nigeria!
*Security: Security of funds is the major characteristics a good broker must exhibit. Fortunately checking the reliability of forex brokers isn’t complex. Though Forex trading is not regulated in Nigeria they are top-tier regulatory agencies/bodies worldwide that differentiate fraudulent brokers from the legit ones.
The United States—National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
United Kingdom— Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA).
Australia — Australian Securities and Investment Commission (ASIC).
Switzerland— Swiss Federal Banking Commission (SFBC)
Germany— Bundesanstalt für Finanzdienstleistungsaufsicht (BaFIN)
France — Autorité des Marchés Financiers (AMF)
Canada— Investment Information Regulatory Organization of Canada (IIROC)
Mauritius— The Financial Services Commission (FSC)
Before thinking of putting funds in a broker make sure it is regulated by one of these bodies listed above.
This is a software that enables we the investors and Traders to place a trade and monitor over a network with a financial intermediary. Trading platforms are like the interface that makes trading possible. The most recommended platform for Forex trading is the META TRADER application. It has a list of numerous brokers, trading community, indicators for analysing the market, news for fundamental analysis, tool for determining future price action such as Fibonacci retracement, channels, trendline and graphical representations.it also provides pioneering automated trading systems with expert advisors.
Every trader must submit to transaction cost every single time they place an order(enter a trade), You have to pay for either the spread or a commission to the broker.
A good forex broker would allow its client to deposit and withdraw funds without stress because brokers hold clients money to facilitate trading and make it easier for its client. A good broker makes a withdrawal of clients funds swift and smooth.
A good broker must fill you at the best possible price for your orders. If a market is stable (low volatility, low liquidity, or no surprise events on news releases) and you place an order, A good forex broker should get you filled at that price. The speed at which brokers fills orders is very relevant, particularly for scalpers.
Nothing is perfect even brokers. They are bound to be problems may be due to Technical faults or maintenance, so withdrawal or deposits of funds may be delayed. A good broker must allow smooth communication between the firm and its customers when a problem arises.