In Nigeria, like many other countries, forex trading has gained popularity as a means of financial investment and wealth creation. The Nigerian forex market has seen significant growth in recent years. Many traders from the nation are actively participating in this dynamic and volatile market. Notably, traders in this country are taking advantage of every tool at their disposal. This is one of the reasons why TradingView brokers in Nigeria are so popular. TradingView is a popular trading tool that traders use for technical analysis and placing orders.
In this article, we will delve into the world of forex trading in Nigeria. We will do an analysis and attempt to answer the question what do forex traders from Nigeria trade the most often?
Understanding Forex Trading in Nigeria
The forex market is open 24 hours a day, five days a week, offering ample opportunities for traders to speculate on currency movements. In Nigeria, forex trading online has become an attractive investment option due to several factors. For starters, this market is highly accessible. Investors can trade using their mobile phones as long as they have an Internet connection. This is because most traders support a mobile trading app to accommodate mobile-based traders.
Secondly, traders can use leverage in this market. This helps them control larger positions than they would by using only their capital. Consequently, the potential profits a trader can make from a given position are larger. However, this also increases the potential losses they may suffer. Either way, it is attractive to traders seeking higher returns.
The volatility of the market can also be an attractive feature. By buying low and selling high, traders can make gradual returns over time. Moreover, they can diversify their investment portfolios to spread the risk of investment across various assets. But what exactly do forex traders in Nigeria trade the most? Let’s find out.
What Do Nigerian Forex Traders Trade the Most Often?
Major Currency Pairs
Major currency pairs are the most frequently traded assets in the global forex market. Nigerian traders are no exception to this trend. Major pairs usually have high liquidity and low spreads, making them appealing to traders of all levels. Some of the major currency pairs that Nigerian traders frequently engage with include EURUSD (Euro/US Dollar), GBPUSD (British Pound/US Dollar), USDJPY (US Dollar/Japanese Yen), and USDCHF (US Dollar/Swiss Franc).
These pairs are popular among Nigerian traders due to their stability, somewhat predictable price movements, and the availability of market analysis and news coverage. Additionally, these currency pairs are available on the majority of broker sites. Better yet, they are available with relatively lower trading costs contributing to their popularity.
Exotic Currency Pairs
Exotic currency pairs are less commonly traded but can offer a higher profit potential due to their higher volatility. These currency pairs include one major currency and one currency from a smaller or emerging market. Some exotic currency pairs that Nigerian traders often trade include USDNGN (US Dollar/Nigerian Naira), EURNGN (Euro/Nigerian Naira), and GBPZAR (British Pound/South African Rand). While exotic pairs offer the potential for significant gains, they also come with higher risk. The Nigerian Naira (NGN) is particularly popular among Nigerian traders because it provides them with a direct way to speculate on their local currency’s performance. The South African Rand, on the other hand, is not far from home allowing them to also speculate on the economy of Africa at large.
Minor Currency Pairs
In Nigeria, as in many other parts of the world, the most traded currency pairs primarily consist of major and exotic currency pairs. Minor currency pairs are less popular but can still be of interest to some Forex traders, especially those who are looking to diversify their portfolios. The popularity of specific minor currency pairs can vary among individual traders, but here are a few minor currency pairs that are slightly more popular among Nigerian traders. They include EURGBP (Euro/British Pound), AUDNZD (Australian Dollar/New Zealand Dollar), EURAUD (Euro/Australian Dollar), and GBPJPY (British Pound/Japanese Yen).
But currency pairs are not the only assets that Nigerian traders invest in. Let’s see some other asset classes.
Cryptocurrencies continue to gain immense popularity worldwide, and Nigerian traders are not left behind. Digital currencies like Bitcoin (BTC), Ethereum (ETH), and others are popular on various forex platforms alongside traditional currency pairs. The inclusion of cryptocurrencies in an investor’s portfolio appeals to Nigerian traders looking to diversify their investments and capitalize on the significant price movements of these assets.
Nigerian Forex traders also engage in trading commodities, such as oil and gold. Traders usually consider these assets as safe havens during times of economic uncertainty. They can offer a way for traders to hedge against inflation and currency devaluation. Oil is of particular interest to Nigerian traders, given the country’s reliance on oil exports as a major source of revenue.
It’s crucial to remember that different Nigerian traders often engage in trading major and exotic currency pairs, cryptocurrencies, and commodities like oil and gold. Their choices are influenced by a range of factors, including economic events, local economic conditions, market analysis, risk tolerance, and the regulatory environment. The availability of specific currency pairings to Nigerian traders might be influenced by broker-specific and regulatory variables.
Nigerian traders should always approach Forex trading with caution and proper risk management. While the potential for profits is significant, so is the risk of losses. It is essential for traders to continually educate themselves, stay informed about market developments, and choose reputable brokers to ensure a successful and sustainable trading journey in the Forex market.