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Most of these brokers offer free demo accounts so you can test the brokers and their platforms with virtual money. Give it a try with some play money before using your own cash.
Not all Forex brokers accept US clients. For your convenience we specified those that accept US Forex traders as clients.
Headquarters:Five Lamps Place, 77-80 Amiens Street, Dublin 1, DO1A742, Dublin, Ireland
Headquarters:Kanika International Business Center 7th Floor, 4 Profiti Ilia Street Germasogeia, Limassol, Cyprus
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Headquarters:Gladstonos and Karaiskaki Street, off 31, Limassol 3032, Cyprus
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As both scams and opportunities abound in Forex trading, you as a Nigerian trader need to find a reliable broker so that your hard earned money can be protected from scammers, money launderers, and various illegal brokers. There are a number of steps you will have to go through.
Firstly, you will have to find a CBN (Central Bank of Nigeria) regulated broker to be sure your broker is watched, supervised and monitored. Then, you will need to see whether the platform offered by the broker is user-friendly and offers the features that you need. Then you will check whether the commissions charged by the company are low enough for you. After than you will find out what type of accounts the broker offers you and finally you will test their company customer service and other extra services.
Forex regulation in the Western hemisphere remains somewhat similar among the majority of brokers with more opportunities to use higher leverage and lower margin requirements and there are a few countries which allow only very low leverage and much higher margin requirements. Most tend to be in the middle of that and can enjoy 50:1 leverage on most currency pairs and 5 percent margin requirements. However, fewer and fewer brokers can now operate in most countries unlicensed. If they do, they can be easily fined or even prosecuted if they raise even a little suspicion for the regulators of those countries.
The Nigerian local Forex market is regulated by CBN Central Bank of Nigeria. The main aim of CBN is to ensure transparent and efficient functioning of the Foreign Exchange market. It does so by issuing licenses for Forex brokers both local and foreign and those have to adhere to strict rules set by the Bank. The institution has a consumer protection department where various complaints are sent by investors and those complaints are analyzed. If the broker is found guilty of acting against the best interest of their customers, severe fines and even revoking of their license to operate can occur. You can be sure that CBN will act in your favor to limit risks taken by a broker under its supervision and ensure that your capital is safe.
The trading platform is another thing that you should look into when in search for a good FX broker in Nigeria. One of the best platforms in the industry is currently the Metatrader 4. You can expect any broker to have it, but if he does not you should seriously consider not opening an account with him. The platform has an easy to use chartstation, where you can place a multitude of symbols: currencies, metals, and indexes and analyze them on various time frames. You can also place technical indicators, both the most popular and your own ones. If you are a skilled programmer you can create a code for the platform and run it, which would work as robot trading on your behalf. Backtesting and copying functions are also integrated into the software, so you can check how your trading strategy works and you can copy any trader who offers his service to be followed. Many more features are there, so you can download a demo version of the platform and check whether it has what you need before you start trading with real money.
Brokers that fill your orders when you trade financial markets charge commissions. However, in currency trading, it is different than in trading stocks. In stocks, brokers typically charge a fixed fee for each operation or a certain number of shares. In Forex, brokers are compensated by charging spreads. What is a spread? It is the difference between the buy and sell price. Lets say GBP/USD pair trades at 1.2869/1.2874. There are five pips difference between buy and sell price and that is brokers commission. When you open a position in GBP/USD, either buy or sell, you will have 5 pips deficit. So, you need to find a broker who has the lowest spreads and in this way increase your profits and reduce your costs.
Before you start trading you should be given a chance to backtest your trading strategy on a demo account. Those typically expire in a month and by that time you can familiarize yourself with various peculiarities of a platform. When you are ready to trade real money, a broker should offer you a number of accounts to choose from.
If your budget for investment is tight, within a range of a few hundred dollars say, you should open a micro account. Then, you will be able to trade 1k micro lots and not risk much.
If you want to try deeper waters and can afford to invest a thousand or a few thousand dollars, you should try a mini account. You will have the possibility to trade 10k size lots and hopefully, make bigger money than you would on a micro.
Standard lot size is 100k. It means you need more than 10 thousand dollars to trade such huge amounts. However, if you can afford 20 or 50k investment size, a standard account might be a good choice for you. Just dont forget that profits come with risks and the higher the profit, the higher the risk.
There is give and take between a broker and a customer. He offers you the possibility to trade and a good service and you make him money by means of spreads. As a Nigerian trader, you should expect this service to be in your native language or dialect and you should also get it online 24 hours per day through the working week. If your broker is indifferent to your questions, problems, and issues, you should say goodbye to him and search for trading opportunities elsewhere.
Additional services come in the form of educational materials: video, audio, and texts. Ebooks are often offered by brokers to their clients on various topics. Daily fundamental and technical analysis are also presented on most brokers websites. Recruited analysts try to foresee shifts in the policy of Central Banks and predict how that will affect exchange rates of currencies. Most brokers also have forums where traders can chat and help each other. Some even offer monthly trading contests that have high money prizes. So, you can decide about brokers reliability by seeing how numerous his services are to you.
Your real money trading experience starts with your broker. In order to stay protected from unscrupulous brokers, it is advised to follow the steps laid out above. We hope they helped you to form a picture of what a reliable broker looks like. Your other option is to pick a broker from the below list. We have compiled this list based on objective research.
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