• What is Forex Trading?  

• What is the main purpose of forex trading?
• Why do so many people trade forex?
• How to start forex trading as a beginner in Nigeria
• How much money do I need to start forex? 

Have you heard about Forex Trading and still don’t know what it is about? 

Forex Trading is more than just graphs you see on boards or screens. It deals with the buying and selling of currencies to make profits. 

In this article, you’ll understand what forex trading means, why it is important, why so many people are involved in it, how you can start trading as a beginner in Nigeria and how much you need to start. 

What Is Forex Trading? 

The word ‘Forex’ derives from the abbreviation ‘foreign exchange’. Trading means a transaction (buying and selling). 

Forex Trading is an online global market where people buy and sell currencies, by converting from one currency to another to make profits. Forex Trading deals with price fluctuations. 

This means, as a forex trader, you focus on the price movements to determine when to buy and sell different currencies with the sole aim of making profits

What Is the Main Purpose of Forex Trading? 

Forex Trading is very important. Aside from making profits, forex trading helps to make international trades and investments easier. It determines the value of every foreign currency. Through that, you’ll get to know when to buy and sell to generate profits. Also, when businesses or governments need to convert one currency into another, they rely on the forex market. 

Why Are So Many People Involved in Forex Trading?

1. Easy to Buy and Sell 

Because so much money is traded every day, they can easily buy or sell currencies whenever they want. There is always someone ready to trade with you.  

2. Anyone Can Trade Forex

You don’t need a lot of money, fancy equipment or a degree to begin. Anyone with a phone or computer and internet can start trading forex today.

3. Flexible Hours

The forex market opens 24 hours a day, five days a week. People can trade before or after work, during lunch breaks or at night. They choose the most convenient time to trade. 

4. Freedom to Trade from Anywhere in the World 

You can trade forex from anywhere in the world whether at home, office, coffee shop or even while traveling. 

5. Chance to Make Money

Many people are drawn to forex because it offers a way to make money by predicting how currency prices change. You can make profits when prices go up or down. And, you can choose from many different currency pairs to trade in.

6. Leverage That Gives More Power

Forex brokers allow you to control larger trades with less money through what is called “Leverage”, which means you can trade with more than you have. 

7. Low Starting Costs

You can start trading with as little as $5 using our recommended Forex broker, which makes it more affordable than other investments like stocks or real estate.

How Can I Start Forex Trading? 

1. Learn the Basics

Before you invest your money in forex trading, understand the basics like key terms and the forex market structure. 

Here are some key terms to know: 

• Currency Pairs 
• Pips and Lots 
• Leverage
• Market Movements 

2. Choose a Reliable Forex Broker 

A forex broker gives you access to the forex market as a trading partner. You must ensure that you choose a broker you can trust. Look for a forex broker who is regulated by trusted authorities, offers a demo account for practice, has low trading fees, and provides beginner-friendly educational resources to help you learn and become an expert forex trader. 

At Elevator Trading Academy, we provide you with the required educational resources you need to thrive in the world of forex trading. We give you our greatest strategies to move forward, even as a beginner forex trader.

Click here to get our Free Forex Trading Courses for beginners. 

3. Open a Trading Account

As a beginner in forex trading, once you have chosen a reliable forex broker, your next step is to open a trading account. The trading account helps you to trade currency pairs. Most forex brokers offer different types of trading accounts depending on your level of experience and investments. However, we advise you to start with a demo account to avoid risking real money. A demo account allows you to understand the real forex market conditions without losing anything. When you are ready to trade with real money, you can use a real trading platform. 

4. Start a Trading Plan 

To have a progressive forex trading experience, determine how you plan to trade. This plan will include the amount you choose to start trading with, financial goals, risk management, trading rules and desired trading methods. 

5. Select your currency pairs 

In the forex market, you trade with different currency pairs which are categorized into minors, majors and exotics. As a beginner, it is advisable to begin with currency pairs like EUR/USD or GBP/USD. This is because they are easy to buy and sell and have lower spreads. 

6. Analyze the Market

The trading market works with entry and exit prices to determine opportunities. As a forex trader, you must analyze your preferred forex currency pairs to know the best opportunities in the market and the price points to succeed on. There are three types of analysis forex traders use to analyze the forex market. 

They are: 

• Fundamental Analysis — Focuses on economic factors and news updates to determine the currency values of the forex market. 
• Technical Analysis — Makes use of charts and indicators to predict the price movements. 
• Sentimental Analysis — Involves analyzing the overall mood and emotions of some market participants to determine the risk of a currency or currency risks. 

7. Decide to Buy or Sell 

Once you have analyzed the market, you decide to buy or sell your currency pair based on the price movements to make profits. When the signal goes long, it indicates that you should buy. When it goes short, it means you ought to sell. Both are done this way to generate profits. Use key levels like stop-loss, take-profit or entry to lock in.

8. Monitor Trades to Manage Risks 

Although the forex market is full of opportunities, it has its own risks. It is important to monitor your trades regularly to avoid risks. Plan your trades, take advantage of the stop-loss and take-profit points, use the one-percent rule and calculate your expected returns. 

9. Aim to Do Better 

When you have closed a trade, take your time to review your trading experience. Ask yourself, “What went well? What didn’t go well? What do I want to do better?”

Keep a journal and follow top traders on social media. Also, make use of the monitoring and reporting features available on the trading apps or platforms.

How Much Money Do I Need to Start Forex? 

You can start trading with as little as $5. As a beginner, you can start on this low budget to understand the forex market.

Are you ready to begin forex trading but want to avoid the risk of making mistakes at your early stage?

We’re here to help you! 

Click on this link to get our Free Forex Trading Courses best for beginners. 

This programme reveals our secret strategies on how to trade forex like a pro.

Also, join our Telegram community for FREE signals throughout this month of June!