I have been into Forex trading for sometime now and making little money. I need to be more profitable. So, how do I become a profitable? I need Answers. All Suggestions are welcomed!
Forex trading is not a get-rich-quick scheme. The steps to becoming a profitable forex trader in Nigeria are getting knowledge of forex trading, finding suitable forex broker, practicing with Demo account, managing risk and maximizing your profit
1. Getting knowledge of forex trading:
Developing the necessary skills is the first step to being a profitable forex trader in Nigeria. If you neglect this first step and just start by investing your money, then you are setting yourself up for failure. Make up your mind to learn forex starting from the basics, although this can take months. You have to first understand the market by picking a currency pair and the best timing to trade that pair and a winning strategy. As a forex trader, you just need one strategy per currency pair and you are on your way to being successful. But there are some things you need to put in place, such as knowing how to minimize your risk and managing your money wisely while protecting your capital. Read now: How to start forex trading in Nigeria : step by step guide
2. Finding a Suitable Forex Broker:
A forex broker provides an internet trading platform that links you to the foreign exchange market and gives you the ability to trade the forex market. You should watch out for scam forex brokers as there is a chance that you can fall victim to these unregulated forex brokers who can scam you of your money. Hence, make sure the forex broker you pick is regulated, has good payment methods, minimal spreads and commission, good reviews, and customer service. Click here to check our list of regulated forex brokers in Nigeria.
3. Practicing forex trading with Demo account:
Opening a demo account comes after selecting a forex broker. Your broker will offer you a demo account, which is a type of account that has demo money. The money in this account is intended for you to practice with and it is not withdrawable. Before spending real money, beginner forex traders should take time to practice on the free demo account. It is a fantastic opportunity for you to become familiar with forex trading in Nigeria and practice different trading strategies before investing your money in a real account. See: Best currency pairs to trade in Nigeria
4. Managing Risk:
Although losses in forex trading are unavoidable, they can be minimized by applying proper risk management through the use of stop loss. A stop loss is set up to make sure that when a transaction is going against you, it will close out at an initially determined level without wiping off your entire account. With proper risk management, you restrict yourself to trading only what you are comfortable losing. This rule helps in managing your psychology when you lose a trade. We advise that you don’t risk more than 2% of your account per trade. Additionally, you must choose a risk-to-reward ratio that is at least 1:2, where 1 represents the risk level at which your stop loss is placed and 2 indicates that you will profit twice as much as you risked on the transaction. i.e., if you are taking a risk of 10 USD, your minimum profit level should be 20 USD. Read: Best Forex trading Apps in Nigeria
5. Maximizing your Profit:
If you can manage a $100 account and be profitable without losing your capital, then you can manage any amount, even millions of dollars. You just need to stick to your rules and use proper risk and money management. To maximize your trading profit, you can use any of the 3 methods previously discussed in this article.
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