Forex trading offers attractive perks that draw in traders from all over the world, however, some aspiring traders hit roadblocks when attempting to open a trading account because forex is banned in certain countries. South Korea is a common example of a country that many brokers place on their ban list because it is illegal for residents of the country to open a trading account with foreign brokers.
Traders in the United States often have issues finding brokers that will accept them as well due to strict regulatory requirements. It isn’t possible for traders to lie during the account registration process, due to the fact that brokers require some type of document (like a utility bill) proving that they do live where they claim to. All of these rules and restrictions cause some confusion in the forex community.
If you’re wondering if forex trading is allowed in Nigeria, the quick answer is yes, but there are some things you need to know. Trading is actually becoming quite popular in the country, with more than $1.25 million is being invested in the market daily.
Nigeria has certain rules in place for its stock market stating that local stocks can’t be raised or lowered by more than 10% of its current value for the day. Unfortunately, forex traders don’t see the same level of protection, as forex trading is not currently regulated in the country. This means that there are no government entities watching over Nigeria-based brokers and holding them to higher standards that can protect clients. Here are a few reasons why this can be an issue:
- If your unregulated broker goes bankrupt, traders are at risk of losing all the money in their trading account. With regulated brokers, those traders would be entitled to financial compensation.
- Regulated brokers must comply with rules and regulations, which protect traders from fraud or mistreatment.
Fortunately, you can simply choose a broker that is regulated and based in another country, even if you are a current resident of Nigeria. If you want to open a trading account, you’ll just need to follow a few quick steps to get started:
- Ensure that you have a suitable device with an internet connection, like a computer, a smartphone, tablet, or iPad. If you don’t currently have internet, you’ll want to choose a provider that offers good service. Airtel is known to bring the fastest provider in Nigeria.
- Choose a broker. Now, you’ll need to do some research and invest in a trustworthy broker. Be sure to keep regulation in mind. Your broker doesn’t necessarily have to be regulated, but you’ll be more protected if they are.
- Complete the account verification process. This usually goes fairly quickly, as you’ll be asked some personal details, like name, address, date of birth, etc. You should also be prepared to submit some form of ID and a document that proves you’ve provided the correct address.
- Make your first deposit. The amount that you must deposit depends on your broker, as some will take $10 deposits and others set higher requirements of $100 or more.
- Install your trading platform and get ready to trade! The exact platform you’ll be using will also depend on your broker, as some use 3rd party platforms like MT4 and others offer their very own platforms.
The process of opening a trading account from Nigeria is the same as it is for traders in many other countries all over the world. This is great news for aspiring Nigerian traders that are looking to take advantage of the highly liquid forex market and all of the perks that come with trading. As always, we will remind our readers to get out there and get educated before opening a trading account to avoid losing money at the beginning of your trading career.