What is Forex
Forex (also known as FX, foreign exchange) is the market where one currency is being exchanged for another one.
The Forex market as a whole is not regulated by any particular entity or government body.
Unlike stocks and futures, it is not conducted through a stock exchange.
Instead, foreign exchange transactions are taking place on the open market (also known as over-the-counter market, OTC)
because any two parties exchanging one currency into another, from local money exchanger to a
large bank, are the participants of the FX market.
The volume of transactions taking place on the foreign exchange market is mind-blowing.
Some estimates, based on the earlier surveys made by the Bank for International
Settlements, mention an average daily figure of over US$3 trillion per day! The daily combined
turnover of all major world stock exchanges is only around US$200 billion.
Because FX transactions do not need to be registered or reported to any particular
exchange, there are many possibilities for its participants. A person willing to invest into FX
has many options to choose from and can use different trading methods. Using a market maker allows you
to choose the best conditions for trading, use the quotes available and enter large transactions with a minimal initial outlay.
Usually you are able to buy/sell currency contracts equal to $100,000 with only $1000 used as a margin, another words use the 1:100 leverage. However some brokers provide leverage of up to 1:500, which gives greater trading flexibility and increases potential profit.
The size and volatility of the market provides excellent opportunities for making profits, however one should always remember about
the risk factor when entering the foreign exchange market.
There are 5 major currencies: USD, EUR, GBP, CHF, JPY. In the currency pair the fixed unit of currency on the left is
usually called “base” and the variable currency unit on the right is called “terms” or “quoted” currency.
In the pair EUR/USD, EUR is the base currency and USD is the terms one.
Why Forex is easy for everyone
- You can trade in the foreign currency market. It is available to anyone and everyone.
- You don’t have to be a mathematical genius to trade in the forex market.
- You don’t have to be an economist to trade in the forex market.
- You simply have to learn what trading signals to watch for and how to respond when you see those signals.
You can start learning to trade right now. Click here to find more educational material and tutorials.
It is a global electronic network of banks, financial institutions and individual Forex traders, all involved
in the buying and selling of national currencies. A major feature of the Forex market is that it operates 24 hours a day,
5-6 days a week, corresponding to the opening and closing of financial centers in countries all across the world.
At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.
To help you navigate in this market you need a broker.
Forex Regulations and Brokers in Nigeria
Unlike some other countries, forex industry in Nigeria is not over-regulated.
It enjoys a truly free market economy environment.
According to the Central Bank of Nigeria everyone can participate in foreign exchange trading as long as the trading is conducted via a bank or a broker.
There is no specific registration required for forex brokers who want to operate in Nigeria, therefore many well known brokers accept Nigerian customers.
There are a number of brokers operating in Nigeria today. One of them is Forex-Metal. The company welcomes Nigerian customers and will soon be offering local deposit and withdrawal options.
At the moment the payment and withdrawal options include credit cards, wire transfers, Liberty Reserve and other methods.
There are also forex seminars conducted in Lagos and Abuja on a regular basis. Every new customer receives a 30% first deposit bonus and other incentives.
It is true that forex trading could be risky, however by applying your knowledge and using the news and analytical information it is possible to get real results.