Trading Forex is a high-risk and one of the most exciting investment opportunities in the world. To trade Forex, you need initial capital to start trading. The minimum amount to trade Forex isn’t set in stone.
For some platforms, you can start with as low as 2000 naira and other require one million naira minimum deposit. However, the amount of money you start trading with is the key element to your success.
Before we explore how much capital you need to trade Forex, we will discuss why it is important that you only trade with capital you can afford to lose. The volatility of Forex market is extreme, therefore losses can be huge, so make sure to check out volatility 75 index Forex brokers in Nigeria. Also, never risk money that you cannot afford to lose.
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So how much money do I need to start Forex trading in Nigeria?
As we have already stated in the introduction, there is actually no minimum amount you need to start Forex trading in Nigeria or anywhere in the world for that matter. A lot of factors affect the amount an individual need to start trading Forex in Nigeria. These factors are what will determine what your minimum amount should be.
Some of these factors include, but are not limited to:
- How much you are willing to risk?
- Experience level
- Forex Broker
- Trading style
- How much profit do you want to make
How much you are willing to risk
The risk an individual is willing to take is dependent on how much they can afford to lose. The more you are willing to risk, the more you will earn.
Some traders have started trading Forex with as little as 500 naira and have earned a great deal of money over the years. There are some traders who have started with that same amount but never achieve success in this industry.
Also, there are people who have started with much more and still didn’t achieve much in terms of profit.
Therefore, one factor that determines how much you should start with is how much you are willing to risk. The more you can afford to risk, the more money you should start with because at the end of the day, you need more money to make much money in Forex trading.
Expertise in trading foreign exchange
For the best results, you need to be familiar with the financial markets. The more experienced you are, the more it makes sense to start out with much more capital.
Forex trading, and any other financial market, is all about understanding the market, how to read charts, and what is happening in that particular market at any given time.
If you have a good understanding of this, then you should start with more money, if you don’t, then you should start with less money just to test the waters.
There are a lot of people out there who lost millions of naira because they didn’t understand how to read charts or understand the Forex market in general.
The amount you should start with also depends on the broker you are using. The best brokers in the industry offer leverage trading and low base fees. This means that you will be able to trade more currency pairs with a smaller account balance than other brokers.
Forex brokers that offer leverage trading allow you to trade more currency pairs with less money. Brokers such as FXTM, Pepperstone, and Oanda all offer leverage trading.
With a good broker, you can start with as little as 1000 naira but make sure you’re cautious about who to select.
|Forex Broker||Leverage||Account minimum||Forex Trading Platform(s)|
|FXTM||1:1000||₦2000||MetaTrader 4, MetaTrader 5, Webtrader, iOS, Android apps|
|Alpari||1:1000||₦0||MT4, MT5 for web & mobile. Plus Alpari Invest app.|
|OctaFX||1:500 (variable based on account type & asset)||₦36,000 ($100)||MT4, MT5 on desktop & mobile. And cTrader for web & mobile.|
|Hotforex||1:1000||₦1800||MetaTrader 4, MetaTrader 5 for web & mobile|
|XM Forex||1:888||₦1800||MetaTrader 4, MetaTrader 5 for web & mobile|
|Exness||1:2000||₦350||MetaTrader 4, MetaTrader 5 for web & mobile|
|Avatrade||1:1000||$100||MT4 for Web, Desktop & Mobile App|
This element is very subjective for each individual. If you are a trader who likes to take positions and only takes positions that make sense, then you should start with more capital.
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On the flip side, if you are a trader who likes to trade short-term and only will take positions that have very short expiration dates and don’t mind losing money on your trades over time, then a small amount will be all you need to start. If your style is somewhere in between, then it is up to you.
Basically speaking, if you like to take huge risks, less is better. If you are a trader who loves to take very little risks with very little profit potential, then your only way to make real gains is to trade with more money.
How much profit you want to make
This is another factor that determines how much capital should you start out with when trading Forex. If you want to make large amounts of profit, you will need to trade with a larger capital.
The more money you start with, the more chances for profits and losses. The amount of money you should start out with is dependent on your goal. The larger the amount of money you are willing to risk, the greater your chances of making large profits in trading. However, the more you trade with, the greater your chances of losing more.
The amount of money you should start Forex trading with is dependent on a lot of factors. These factors include your expertise in trading, the amount of money you can afford to lose, and your goal. There is no universal formula for how much money you should start out with. It all depends on the various factors mentioned above.
But here is the thing, if you start your trading journey with 1000 naira, you are likely going to fail because you will be forced to take too many risks. In other to double your money and make an extra 1000 naira, you would need make a 100% profit on your trading amount as opposed to someone who only needs a 1% profit if he started with 100,000 naira.
So, how much do you need to start Forex trading with in Nigeria? I would say the equivalent of $100 dollars. About 50,000 to 60,000 naira. This way, you wouldn’t be forced to take unnecessary risks and you would be able to see your profits.
But remember that you will need money to trade, like in any other investment. The more money you have, the more opportunities you will have and the more your chances of losing your money.
Also note that once you start trading Forex, it will not be a walk in the park. You need to learn how to read and use charts. You will also need to read news, analyze markets, understand the currency pairs and their relation to each other, and trade effectively.
You will also need patience as you cannot make quick profits from Forex trading because it is a very volatile market.
The good thing about this industry is that there are many online tools that help traders with all these aspects.