You have been hearing about Forex, Forex, Forex, and most likely you must have heard about Forex brokers too especially if you are very much into Forex.
In this post we will give you every information about Forex Brokers in Nigeria. If you are new Forex in Nigeria, I am sure you will find this post very informative, we will give you all the details you need to have about Forex brokers in Nigeria.
Well, to start with, just to ensure we are on the same page, you should have known by now that when we are talking about Forex, we are talking about Foreign Exchange, Forex In this light is the short form of Foreign exchange.
If by any chance you have been hearing about Forex and do not know what the term Forex means, with this explanation, you should have an idea.
Let me assume you are new to this subject, so I am going to give you as much information as you need.
In different section of this post we will be talking about literally Forex exchange brokers, what makes a good Forex broker, how you can find one and some of the things to watch out for in Forex brokers.
There are a lot of people into Foreign exchange in Nigeria, as you would expect, there are also a number of brokers in Nigeria too.
Hey! If you do not know what Forex broker do, let’s talk a pause and talk about that.
Who or what is a Forex Broker?
A Forex broker is a company that deals with foreign exchange. These brokers offers financial services as a company which is simply providing traders access to a means of buying and selling foreign currencies, yes it is that simple.
That is basically a summary of what Forex brokers do, they buy and sell foreign currencies. In the recent years, a lot of persons and startups in Nigeria have been drawn to Forex, this is while Forex brokers in Nigeria are required.
A forex broker understands the foreign exchange market in a global scale, and they know the ways to market or trade foreign currencies. As of the time of writing this post, there are no recorded official regulating body of the forex sector in Nigeria, but all Forex brokers are mandated to operate on certain standards and they are all under the jurisdiction of the Federal republic on Nigeria.
The forex market is where they determine foreign exchange rates for every currency. And this includes all aspects of trading and exchanging foreign currencies at the prices that have been set.
What Does a Forex broker do?
In the section above we already talked about who a Forex broker is, and I do want to shed more light on the role forex brokers in Nigeria play.
There are enormous amount of foreign currencies traded in Nigeria daily. Forex brokers are the people who serves as an intermediary between you and the interbank system (a network of banks that trade with each other).
Furthermore, when you transact with a forex broker, they will offer you a price for exchange from the banks where they are connected to, which defiantly will have access to forex liquidity.
In Nigeria or any country in the world where Foreign exchange is done, the forex brokers uses different banks for pricing, and they in turn give you most suitable price available at the time of the transaction.
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How does Forex Brokers make their money?
You now know pretty much about what Forex brokers in Nigeria do, in case you have been curious about how Forex brokers make their money too, I will discuss about this below as you continue reading this post, you will have full knowledge of forex and how Forex brokers trade foreign currencies.
The answer to how Forex brokers in Nigeria make their money is very simple, the short answer is Forex brokers pay whosale prices to liquidity providers why they charge you retail price, some trader’s charges a commission by trade. That is, they will be given a commission fee for trading.
Every broker places an order in the market on your behalf and earns from a commission. I hope this give you more clarity on how forex brokers make money.
We will keep our explanation short so as to give you the most important and key information in this post.
What makes a good forex broker?
Another important question is, what makes a good Forex broker?
Unfortunately, In Nigeria so many people get scammed by foreign brokers, which births this question. If you are new to this topic, you need to also pay attention to this subject for many good reasons.
I am going to share in this section some ways to know what makes a good forex broker, and later in this post I will mention the top Forex brokers in Nigeria known as of today.
The thing is, as I mentioned before in this post, there are many brokers in Nigeria to choose from when you want to trade foreign currencies.
All forex brokers in Nigeria do not operate the same, there are qualities that different each forex broker in Nigeria and in this post I will share the most important one that will guide you.
When you come across a Forex broker, you should be able to see the red flags, not all of these follow the standard regulations of Forex brokers, and you shouldn’t transact with such, a great example according to our research is Hugosway and you certainly tell by the reviews.
So whenever you are looking for a Forex broker, please keep the following information into your check lick, it should certainly direct you to the right forex brokers, then we also have a list of some notable forex brokers you might want to try.
To mention but a few of those things you should check are;
- Does the Forex trading company offer a free trial or a demo account?
From our expertise in this subject, we can tell you that a good forex broker company offers a demo or trial account, while not all does this, we can say this is one of the best ways to first try out their service.
We believe that a good regulated company should not have issues with letting you have a trial or demo account, and we have a number of brokers that does this and this allows their customers to become familiar with the platform and to check if they are a good match.
- Do they follow all licensing and forex trading regulations?
Not all forex brokers are regulated, these set of brokers are not regulated nor overseen, and so they do not comply with the strict global standards that provides protective measures to the traders.
Therefore one of the things you could check out for is if this companies are well regulated. While this alone does not serve as a protective measure against forex brokers we are quite recommending you should keep this in mind as we are sure you would not want your money to be handled by an unregulated companies.
You can always check if a company is while regulated by seeing if they adhere to the international standards.
- Check for their orders execution time
Another way to confirm if a forex broker company is reliable is from the customers transacting experience, and one of the key experiences to be checked is how quickly your trade in the market will close.
One of the ways you can know this before you transact with them is to check their customer reviews, the reviews will give you a brief on the customer experience.
- And of course, check for the commission amount
Now let’s talk about the third way to know what makes a good forex broker. In Forex there are processes called spreads and swaps. This is one of the ways you can also use to check which forex brokers will be a best bit for you.
It’s is vital and crucial to check and learn about the number of spreads and swaps, as it’s the brokers earning. This gives you more insight on the company.
- Check the ease of deposits and withdrawal
You certainly do not want to leave this out. Another essential quality of a forex broker is their ease of deposits and withdrawal, if you are not able to easily deposit or withdrawal then you might have a very poor or bad experience, so keep this in check. You should be able to freely access your money.
- Company’s overall history:
Before you choose a forex broker, take your time to read reviews, past experiences from other traders will show you if this company at any time as failed it traders, and the ease of deposits and withdrawal.
You should thoroughly research about the broker’s company history to know if they are reliable.
How do Forex brokers in Nigeria operate?
Is it legal to trade foreign currencies, who trades currencies and why?
In this section let me enlighten you more about the scope of Forex in Nigeria, one question a lot of people also tends to ask is, are Forex brokers legally trading foreign currencies?
Another question is can a bank be a Forex broker?
First, to keep you informed about how Forex brokers operate in Nigeria, it is actually very legal to trade foreign currencies in Nigeria? Forex trading is very much a legal trade in the country. However, though the trade is legal, forex is not regulated by any national governing body in Nigeria.
This also means that, forex traders in Nigeria should be aware that when trading with Forex brokers or brokers who offer Forex trading in the country, they may not receive the same protections as traders from some other part of the world.
As regards who trades the currencies through the Forex Brokers, here is a brief..
The major players in this forex market have been the financial institutions such as commercial banks, central banks, money managers, and hedge funds.
The largest volume of currencies is traded in the interbank market (A network of banks coming together). This is where banks of all sizes trade currencies with each other over an electronic network.
Large banks account for a large portion of total foreign exchange trading volume. The bank facilitates foreign exchange transactions for its clients and conducts speculative transactions in its own outlets.
When a bank acts as a dealer for its clients, the spread between supply and demand represents the bank’s profit. Speculative currency trading is conducted to profit from exchange rate fluctuations. Currencies can also provide portfolio diversification.
We need to also talk about how Central bank plays a role in Forex in Nigeria
Central banks, representing the governments, play a very important role in the foreign exchange market. The truth is that open market operations and central bank interest rate policies always have a significant impact on exchange rates.
The central bank is responsible for fixing the price of its currency in foreign exchange. This is a system of exchange rates in which a given currency is traded on an open market. Exchange rate systems are divided into floating, fixed and fixed.
Why do people exchange currencies?
In Nigeria there are import and export companies which conducts foreign exchange transactions to pay for goods and services. Consider the example of a German solar panel manufacturer that imports US components and sells finished products in China.
The Chinese Yuan received by the manufacturer after the final sale must be converted back into Euros. German companies have to exchange euros for dollars to buy more US parts. The same system is used in Nigeria.
Do I need a Forex broker for foreign exchange?
If at any point in time you want to change currencies, you will always need a forex broker, in this article I have covered so many information about forex brokers in Nigeria
Top 7 Best Forex Brokers in Nigeria
We have said much about forex broker in Nigeria, just in case you would need to learn more about the top recommended forex brokers to trade with in Nigeria, then this list will help you.
One thing that is certain is that Forex trading in Nigeria has become very popular due to many reasons, a growing tech savvy middle class and the proliferation of competitive online Forex brokers is one of the reasons we have many forex brokers in Nigeria today.
Most forex brokers require a minimum deposit to open a live forex trading account. But what we want to look at in this section of this post is the best brokers that offer excellent trading conditions and solid regulation.
Remember we gave you some guidelines to on how to find a good forex broker in Nigeria, we have pretty much done our own research to present you with the best we can speak of as of today.
In Nigeria alone, we have numerous renowned Forex trading brokers which are provide trading services to local investors. However, many people who are new still find it difficult to find a reliable broker.
While researching the Forex market in Nigeria, we were able to find the top 7 Forex brokers in Nigeria that offer very competitive services to their traders.
Per our research, AvaTrade is one of the most leading and trusted Forex Brokers in Nigeria. This international forex broker is very popular in many jurisdictions around the world. Founded in 2006, the broker has attracted over 200,000 active traders.
Due to its long history, AvaTrade’s trading services are outstanding among local traders in the country. This broker is strictly regulated by major regulators around the world, including the Central Bank of Ireland, FSCA in South Africa, ASIC in Australia and more.
The broker is focusing on the African region including Nigeria. He even has a dedicated website designed specifically for Nigerian traders.
Opening an account through a broker is simple and requires only 100 units of the base currency. The broker also offers an extensive library of educational and research materials.
Online broker FXTM, also known as ForexTime, was founded in the UK in 2011. It has one of the best tutorials for any type of trader and offers both CFD products and Forex pairs trading opportunities. Trading from Nigeria can use the broker service and there are 6 account types to choose from.
Among the major foreign exchange brokers in the country is XM, which serves the citizens of the country. When looking for the best forex broker in Nigeria, XM is one of the best brokers that come to mind.
XM is a very popular Forex Broker not only in Nigeria but all over Africa. This broker is one of the largest and most well-established brokers in the world with millions of active clients worldwide.
The main reason XM is popular is the high level of security it provides to its customers. Regulated and licensed in many jurisdictions around the world, XM adheres to the highest safety standards on the market.
Since its establishment in 2008, Exness has experienced significant business growth and currently has over 60,000 active client accounts worldwide and is one of Nigeria’s leading minimum deposit forex brokers. For traders of all skill levels, Exness offers a variety of account types and financial products, as well as a regulatory environment approved by the FCA and Cyprus Securities and Exchange Commission.
Numerous forex brokers serve Nigerian traders, but none of them have as much experience in financial markets as HYCM. This broker has been operating in the financial markets for over 40 years and is one of the most respected brokers in the world.
Fortunately, HYCM serves Nigerian merchants, giving local merchants in the country access to high-quality, secure and reliable trading services. The broker is well known for offering services in many countries around the world.
AxiTrader is a STP and ECN broker which has been in operation since 2007, with headquarters in Australia and the UK, with respective regulation through ASIC and FCA.
AxiTrader offers the trade in numerous financial instruments spread across Forex, commodities, crypto currency, stocks, shares, indices, metals, energies, bonds, CFDs, and ETFs.
The minimum deposit to open an account is $200 with AxiTrader offering leverage up to 1:400, variable spreads, commissions from $0 to $3.5, and the use of MetaTrader 4 and MetaTrader 4 NextGen.
- HF Markets
Last but not the least on our list is HF Markets, HF Markets has emerged as a prominent choice as a foreign exchange broker among Nigerian investors seeking a trading account that uses the Naira as its base currency and provides STP trade execution.
HF Markets provides customers with the ability to choose from a wide range of account types, as well as the industry`s most extensive range of trading assets and the highest quality software.
In addition, trading conditions on HotForex are advantageous, and the company provides quick order execution.
Final thought on legit Forex brokers in Nigeria
When considering the wide variety of options in brokers, traders from Nigeria have numerous brokers that cater for a variety of traders despite their level of experience, whether they are beginners or experts.
These brokers we have shared offer competitive and comprehensive trading conditions to a multitude of traders despite their trading needs and objectives along with the use of popular and reputable trading platforms through which trading can commence, you can consider any of these when choosing a forex broker in Nigeria.
To wrap up this post, I should say that if you want to be successful in forex trading, it is essential to sign up for a forex broker that offers a risk-free trading environment, competitive prices and a wide range of trading products.
Here we discuss the best Forex Brokers for Nigerian traders, based on our research. The information provided in this post is solely the opinion of the author and is not a 100% certain procedure for you to follow. It is provided for educational purposes only.
By using it, you agree that the information does not constitute trading or financial certainness. Do your own research and consult with your financial advisor before making any forex decisions.