Last Updated on by Patrick Mahinge
Forex, also known as foreign exchange market, is one of the largest financial markets in the world. In terms of volume, it is bigger than stock and bond markets combined. It is a decentralized market where currencies from countries around the world are traded for each other. The exchanges occur between two people on an agreed rate, with no middlemen involved.
The forex market is open 24 hours a day, 5 days a week. There are no opening and closing times for trading. Some forex brokers even offer extended-hours trading where you can trade during weekends or early in the morning.
Using the above schedule, people from different time zones around the world to participate in this market by trading during their respective time zones. This is the main reason why forex market is open 24 hours a day, 5 days a week.
How to Trade Forex Profitably in Nigeria
The key to trading forex profitably is understanding how the market works. Because there are no physical locations where trades are conducted, it means that all transactions are done electronically through powerful computers connected by the Internet. With this in mind, you need to understand that price is determined by supply and demand, and is constantly fluctuating throughout the day.
To succeed in the forex market, it is important to do your homework before putting on a trade. If you go into this business thinking you will get rich quick or without understanding how it works, you will most likely lose all your money and put yourself in a very bad situation. Trading should be treated as a business, not just an activity for making quick cash.
There are different types of forex trading strategies to choose from. It is important to find the best one that suits your style and risk profile. Once you have determined which one you like, it is time to put your money into action.
1. Preserve Your Capital
One of the most important tenets of successful forex trading is capital preservation. Losing money can be a disheartening experience, and it can be difficult to make up for losses incurred in the market. A trader’s goal should always be to preserve their capital so that they can continue trading and making profits.
There are a few key things to remember when trading forex in order to preserve your capital:
- Start with a small amount of capital – You don’t want to risk too much money at first, in case you lose it all. Start with a small sum and grow your account slowly over time.
- Use stop losses – This is an essential part of risk management, and will help you protect your capital in case the market moves against you.
- Stay disciplined – Don’t get greedy and chase bad trades. Stick to your plan and cut your losses quickly if things go wrong.
- Trade on demo first – Before risking any real money, practice trading on a demo account so that you can get used to the market dynamics and see how price moves.
- Understand the trade – Make sure you thoroughly understand every single trade you make, so that you know what to expect from it.
- Keep your costs low – Broker fees and commissions can eat into your profits over time, so try and find a way of keeping these as low as possible.
2. Cultivate & Practice Patience
Forex trading can be profitable, but it’s also a risky investment. The best traders are those who have the patience to wait for the right opportunity and the discipline to stick to their plan.
It can take time to find good trade setups, and even longer to see a successful trade result in profits. Patience is key because you’ll need to wait for the right opportunity, and then you’ll need to be prepared to hold your position until the trade is successfully completed. Jumping in and out of trades will only lead to losses.
One of the most important traits for any trader is patience. You need to be able to sit through long periods of sideways movement and not get impatient when the market doesn’t move in your favor. Remember, forex trading is a marathon, not a sprint. So make sure you have the patience to stick with it through thick and thin.
Here are a few tips to help you gain patience in forex trading:
- Don’t trade when you’re angry or upset.
- Only trade with money that you can afford to lose.
- Set realistic goals and expectations for yourself.
- Be prepared to wait for the right trade opportunity to come along.
- Don’t try to “force” things; let the market come to you.
- Remember that success in forex trading takes time and patience.