Residents of Nigeria can use cutting-edge tools for money-making. The country is seeing a surge in online trading. This year, it is accelerated by the pandemic. As so many employers have gone under, consumers are turning to remote methods of work. Here are the three most accessible options today. These can provide an extra source of cash or even become a full-time occupation.
Merchants and travelers have exchanged currencies for centuries. Today, you can make a steady profit from the rates. All you need is knowledge, software, and reliable brokerage. So, how exactly do they work?
Currencies are exchanged in the global over-the-counter system. It has no physical center: parties connect freely through the Internet. Forex is the largest financial market where close to 6 trillion US dollars circulate daily.
The participants are institutions and individuals. Anyone can become a retail trader and act alongside banks, hedge funds, and other giants. You can even delegate your Forex investment to a professional.
All currencies are valued against one another. These pairs may be classified as Major, Minor, or Exotic based on the systems they represent. For example, EUR/USD is one of the most traded choices. It is linked to two gigantic economies – the systems of the United States and the European Union.
- Majors provide the highest liquidity, as they are traded so often. Buyers and sellers find each other easily, so there are no delays.
- Minors are also liquid, but they do not include the USD (e.g., AUD/CAD).
- Exotics like USD/ZAR present valuations of a strong currency against an emerging one. They are more volatile: their prices may rise and fall capriciously.
A trader’s goal is to foretell where the price for the pair will move. They can buy (go long) or sell (go short). Both rises and falls can work to their advantage. When you expect the pair to gain value (appreciate), you buy more lots and wait for the upsurge. The price gap between purchase and sale constitutes profit (or loss). If you expect a decline, you sell your instrument and buy back more of it. The price for the seller is called Bid, and the price for the buyer is Ask.
Forex trading should not be daunting. Brokers like ForexTime provide education, responsive support and demo accounts for free, so you can practice and learn safely. Everything is managed through powerful systems that work on computers and mobile devices. They have price charts, newsfeeds, calendars, and many other features that expedite analysis.
Through global brokers, Nigerians invest in stocks of the largest multinationals. One may buy shares of Apple, Amazon, Alphabet, and other giants. Stock prices always rely on the performance of the issuing company. Traders keep track of the news and financial reports to foresee changes.
The logic is similar to Forex, as you buy low and sell high. Traders use price charts and indicators to place timely orders. Capitalizing on short-term trends, however, is only one dimension. Equity is also used for prolonged investment. Shareholders may receive dividends for many years.
It is not uncommon for traders to add stocks to their currency pairs. Diversified portfolios boost potential returns and reduce risks at the same time. Real pros develop diverse collections of assets, so they can trade on different unrelated markets. Profit from stocks may help them compensate for the underperformance of other instruments.
CFDs are accessible derivatives with low entry costs and impressive leverage. They may be connected to different underlying assets: stocks, cryptocurrencies, commodities, or market indices. Profit is indirect, as traders speculate on the price for their assets. For example, if you expect Bitcoin to go up, you can buy Bitcoin CFDs and sell them after the rise. The broker pays the difference between the entry and exit prices.
In Nigeria, currency trading is on the rise. Since lockdowns disrupted conventional sources of income, remote tools have been in vogue. Currencies, stocks, and CFDs are some of the most popular options. All of them may be accessed from one terminal, such as MetaTrader
Beginners can find a wealth of educational resources online. There are countless articles, books, podcasts, and video tutorials. Brokers educate clients about common strategies, which helps them navigate this thrilling field. Even YouTube has quite a few trading channels run by distinguished professionals.
Nigerian traders should be cautious in their choice of a brokerage. The local industry lacks regulation, so global brands are your safest bet. Look for companies with official licenses and approval from regulators like the FCSA in South Africa.