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Forex trading has become increasingly popular in Nigeria, attracting a large number of traders eager to participate in the global currency markets. The rise of mobile technology, better internet access in Nigeria, and local payment options like Paystack and Naira debit cards have made it easier for Nigerians to get involved in forex trading.
As always, choosing the right forex broker is crucial for ensuring a safe and efficient trading experience. In this article, we will look at a few of the many forex brokers that available for traders in Nigeria, highlighting what to look for in a broker, and exploring payment methods, regulation, and support services offered by brokers operating in the country.
Forex trading in Nigeria is very popular today, offering both new and experienced traders the opportunity to participate in the global financial markets. With several reputable brokers available in Nigeria, traders can use local payment methods, and get access to competitive trading conditions and a variety of tools to enhance their trading experience.
To succeed in forex trading, it’s essential to choose a serious and reputable broker, understand the risks involved, and develop a solid trading strategy. By selecting one of the regulated brokers, such as FXTM, HotForex, or Exness, Nigerian traders can increase their chances of enjoying a secure and profitable trading experience.
What to Look for in a Forex Broker in Nigeria
When choosing a forex broker in Nigeria, it’s important to consider several factors to ensure you are working with a trustworthy and cost-efficient broker that will give you a good chance to be profitable over time. It is always important to consider if a broker is suitable for your needs and your particular trading strategy. A broker that is great for one trader can be all wrong for someone else, which makes it difficult to give any recommendations without knowing more about a specific trader and their strategy.
Here are a few examples of points that are good for Nigerian fx traders to consider when choosing a broker:
Regulation and Safety
A reputable financial authority should regulate the broker to ensure transparency and keep your funds safe. In Nigeria, there is currently no specific local forex regulator. Therefore, fx traders in Nigeria will often pick a broker regulated by a foreign financial authority that they have confidence in, such as the Financial Conduct Authority (FCA) in the UK or the Cyprus Securities and Exchange Commission (CySEC) in the European Union. With that said, using a broker that is not strictly regulated by a financial authority within the trader´s own country is always a bit more risky and can make it more difficult for the trader to get efficient help if there is any issue.
Payment Methods
One important factor when choosing a forex broker in Nigeria is the availability of convenient payment methods for deposits and withdrawals for traders in Nigeria. This can for instance include local bank transfers in Nigerian Naira (NGN) or debit/credit card transfers in that currency. Visa and MasterCard issued in Nigeria are accepted by a wide range of brokers.
Within Nigeria, Paystack has grown to be very popular local payment gateway for Naira transfers, and some brokers active on the Nigerian market do accept Paystack. There are also brokers that accept internationally well-known e-wallets such as Skrill and Neteller.
Low Fees and Tight Spreads
Forex brokers typically make their money from spreads, commissions, and miscelanous fees. The lower these costs, the more profit the trader can keep. Look for brokers with tight spreads, low commission fees, and low or no other fees.
Trading Platform
Some brokers have their own proprietary trading platform, while others will give you access to a third-party platform such as cTrader, MetaTrader 4 (MT4) or MetaTrader 5 (MT5). Always test out the platform using a free demo account before you pick a broker and platform.
Learning how one of the major third-party platforms work will make it easier for you to switch brokers or use more than one brokers, since you don´t have to learn a new platform each time – you can simply chose a broker that also uses the big third-party platform you are used to. This lowers the threshold for leaving brokers that are no longer optimal for your trading needs.
Leverage
Leverage allows you to control a larger position with a smaller amount of capital. Brokers often offer leverage as high as 1:500 or even 1:1000 to traders in Nigeria. While high leverage can lead to bigger profits, it also increases risk. When you are using leverage, you are borrowing money from your broker, and you must pay it back even if the market goes against you.
If the broker gives Negative Account Balance Protection to retail traders, make sure you understand exactly how this works and what the drawbacks are.
Since leverage is so risky, many of the stricter financial authorities around the world have clamped down on brokers offering extreme leverage to non-professional traders. If you are using a broker that needs to be in good standing with such an authority, you may find that you are only offered a leverage of 1:30 for forex trading as long as you are classifed as a non-professional trader. For minor currency pairs and exotic currency pairs, the leverage cap may be even lower.
Customer Support
Reliable customer support is important to resolve issues you may encounter. Look for brokers that offer 24/7 support, or at least have support available during the hours when you are most likely to trade. Do you prefer to use phone support, live chat, or email, and is this broker offering this? If phone support is important to you, is there a local Nigerian number available, a toll free number, or a call-back service? You don´t want to be forced to make a potentially costly phone call to a support centre in another country each time you need phone support.
Make sure customer support is available in a language you are comfortable using. English customer support is very common, but some brokers active in Nigeria also offer support in languages that are widely spoken in this country, such as Hausa, Igbo, and Yoruba.
Examples of Forex Brokers in Nigeria
Here are a few examples of forex brokers that are available for fx traders in Nigeria.
FXTM (ForexTime)
- Regulation: FXTM is regulated by CySEC (Cyprus/EU), FCA (UK), and FSCA (South Africa).
- Payment Methods: Supports Naira deposits through Paystack, Skrill, Neteller, and local bank transfers.
- Leverage: Offers leverage up to 1:1000, depending on your account type and trading experience.
- Spreads: Competitive spreads starting from 0.1 pips on ECN accounts.
- Trading Platforms: MT4, MT5, and a proprietary trading app.
- Customer Support: Provides local customer support for Nigerian traders, including offices in Lagos.
FXTM is one of the most popular brokers in Nigeria, known for its user-friendly platform, local payment options, and tailored services for Nigerian traders. They also provide educational resources, including webinars and tutorials, making them a great option for beginners.
HotForex
- Regulation: Regulated by CySEC (Cyprus/EU), FCA (UK), and FSCA (South Africa).
- Payment Methods: Accepts Naira deposits via Skrill, Neteller, and bank transfers.
- Leverage: Up to 1:1000, depending on the account type.
- Spreads: Tight spreads starting from 0.1 pips on major currency pairs.
- Trading Platforms: MT4, MT5, and a proprietary HotForex app.
- Customer Support: Offers localized support, including dedicated services for Nigerian traders.
HotForex is a highly regarded broker in Nigeria, providing robust trading conditions, excellent customer service, and flexible account types. They cater to both beginners and advanced traders, offering educational tools and resources.
Exness
- Regulation: Regulated by CySEC (Cyprus/EU) and FCA (UK).
- Payment Methods: Accepts local bank transfers, Skrill, and Neteller for deposits in Naira.
- Leverage: Offers high leverage up to 1:2000 for some accounts.
- Spreads: Spreads start from 0.0 pips on certain account types, depending on market conditions.
- Trading Platforms: MT4, MT5, and Exness Trader app.
- Customer Support: Provides multilingual support, including services for Nigerian clients.
Exness is known for its low spreads, fast execution, and high leverage options. The broker is suitable for both new and experienced traders, offering competitive trading conditions.
XM
- Regulation: Regulated by CySEC (Cyprus /EU) and ASIC (Australia).
- Payment Methods: Accepts Naira deposits through Skrill, Neteller, and local bank transfers.
- Leverage: Offers leverage up to 1:888, depending on account type.
- Spreads: Competitive spreads starting from 0.6 pips.
- Trading Platforms: MT4 and MT5.
- Customer Support: 24/5 customer support available for Nigerian traders.
XM is a reputable broker with a wide range of educational materials and tools. They offer flexible account types, competitive spreads, and quick withdrawals, making them an attractive choice for Nigerian traders.
OctaFX
- Regulation: Regulated by CySEC (Cyprus/EU).
- Payment Methods: Accepts Naira deposits through bank transfers, Skrill, and Neteller.
- Leverage: Offers leverage up to 1:500 for forex trading.
- Spreads: Tight spreads starting from 0.2 pips.
- Trading Platforms: MT4, MT5, and OctaFX trading app.
- Customer Support: Local support available in Nigeria, with customer service that operates in multiple languages.
OctaFX is another well-known broker in Nigeria, offering a seamless trading experience with competitive trading conditions. Their mobile app is particularly popular among traders who prefer to trade on the go.
Understanding the basics about the Nigerian Naira
Many forex traders in Nigeria speculate on currency pairs that include the Nigerian Naira (NGN), since they have a keen understanding of the NGN market and the various factors that influence the value of this currency in relation to others.
The naira (₦) is the official currency of the entire Federal Republic of Nigeria and issued by the Central Bank of Nigeria (CBN). The CBN is tasked with controlling the volume of naira supplied into the economy, in order to promote monetary stability and price stability.
The naira has been the official currency of Nigeria since the 1st of January 1973, when it replaced the Nigerian pound at a rate of £1 = ₦2. The coins of the Nigerian pound had been struck by the colonial government and featured Queen Elizabeth on the obverse, while the coins of the niara were the first coins struck by independent Nigeria. The name naira is derived from the word Nigeria.
The niara has been pegged to another currency more than once. It was for instance pegged to the USD for several months at ₦197 to US$1, before it was allowed to float in June 2016. On 14 June 2023, the central bank once again removed a peg, and the naira fell by 23% against the USD in one day, reaching ₦600 to US$1. The Central Bank´s fodness for putting in pegs and then removing them is something that forex traders speculating on the NGN need to take into account.
The official exchange rate for the NGN in Nigeria is still set by the Central Bank, but its rate at the illegal black market within the country tend to be very different.
Notable Events
The Second Niara Attempt
The naira was scheduled for redenomination in August 2008, when 100 old naira was to be exchanged for 1 new naira, but President Umaru Musa Yar’Adua cancelled the redenomination.
eNiara and the Nigerian currency crisis of 2023
In October 2021, President Muhammadu Buhari launched the eNaira, a digital version of the naira. The eNaira is a government-sponsored central bank digital currency.
In February 2023, the Nigerian government carried out a currency note changeover, declaring the old niara notes invalid and requiring them to be exchanged for new notes. In an attempt to force people in Nigera to use the eNaira more, the government made sure that too few of the new Niara notes were put into circulation. The government hoped that this would encourage people to start using the digital currency, but the result was extensive street protests in Nigera. Eventually, the Supreme Court of Nigeria invalidated the government´s decision to render the old notes invalid.