Why many Nigerians lose money in forex trading – Nairametrics

Traders of all levels are captivated by the global forex market, one of the biggest financial markets in the world and a place where profits can be earned, from greenhorns who are just learning about financial markets to well-seasoned professionals with years of trading experience.
Many forex traders enter the market quickly, but then quickly exit after suffering losses and setbacks since access to the market is so easy-round-the-clock sessions, with significant leverage, and relatively low costs.
A commonly-used statistic on the internet is that “95 percent of traders fail.”. However, this statistic has not been proven to be true. In fact, research indicates the real figure may be at least double that.
Research report reveals that profitable day traders make up just 1.6% of all traders.
A person’s goal when they enter the foreign exchange market is to succeed and make money, obviously. Most of the time, they are successful because they follow a structure and have the market act in their favour.
Unfortunately, an average forex trader is doomed to failure since this is a zero-sum game in which each group of traders loses if the other groups succeed.
Trade on any financial market is seen by many as somewhat different from ordinary business. This is one of the biggest misconceptions people have. Based on this belief, there is no need for initial planning and the goal is to capture the momentary opportunity the market offers.
Traders lose money on forex because of this ill-advised psychological attitude.
Foreign exchange trading, or any trading activity for that matter, should never be expected to bring a large fortune in a short period of time. Exceptions are possible, but those who have been lucky are just that – exceptions. Maintaining success in the market requires patience and consistency.
Though the forex industry is governed by fewer regulations than other markets, it is likely possible to do business with an unscrupulous forex broker.
Forex traders should only open an account with a firm they can trust regarding safety of deposits and overall integrity.
It is also important for traders to carry out more research about the account options each broker offers, such as leverage amounts, commissions and spreads, initial deposits, and account funding and withdrawal policies.
People also believe that they can start up trading and make tons of money with small capitals, another myth about Forex trade that results in losing money.
For small accounts to generate a decent income, it takes time and effort.
In order to generate high returns on small initial capital, smaller accounts need to use appropriate trade sizing. Unfortunately, most traders milk the market by using inappropriate lot sizes and overleveraging.
If you start with a reasonable sum of about $1000, then you can trade with micro lots. Otherwise, you may have difficulty reaching whatever goals have been set.
As a business, forex trading is no different. It also requires initial planning and strategizing, just like any other business venture. The problem, however, is that most inexperienced traders skip this step and begin trading immediately.
Two things happen as a result: firstly, they lack a set of directions that they are going to follow. Your trades will be all over the place without a specific instrument, a time of day when you will enter the market, a budget, goals for payouts and losses, etc.
Secondly, the absence of structure can easily make even an experienced trader anxious about new markets. In the absence of setting a specific instrument for trading, a specific time of day for entering the market, a budget, and goals for payouts and losses, your trades will be inconsistent.
If you don’t manage your risk properly, your trading account may suffer.
Generally speaking, you should never risk more than 2% of your total capital per trade. Whether you are an established trader or just starting out, this applies to you. You can quickly deplete your account if you become overconfident and risk a higher percentage.
For example, you will have no way to mitigate risks and minimize losses if you fail to use proper stop-loss orders.
There are other methods of managing your money, such as trailing stops, to help preserve your profits, while still allowing you to make more
I enjoy this write up. I dabbled into trading and had my fingers burnt cause of the enumerated pitfalls you mentioned in your article.
Maybe it’s the typical Nigerian in us or the hyped money making stories in the Forex market, we tend to rush into it, ending up with losses. Brokers too dont help matters by the way they market their organisations. They give you the impression that it’s something you can learn within a short period and progressively get better as you trade.
So what’s the best approach and which Brokers should one trust?
Hi follow @tradersberg on IG and Telegram for answers to all your forex questions, you will gain insights from grandmasters with over 20years of trading experience. and it is 100% free
Gd day Nairametrics support team, I wrote an email to you and since you refused to reply my mail. Though the content of the mail is all about what you’ve just enlightened above in this epistle….why many Nigerian failed in forex trading. Am glad that you came out for this piece of information and I will always count on you people because your information is 100% reliable. Thanks and waiting for more to feed on.
This might surprise you, but your comments strikes a note of guidance in mitigating the primary risk of not taking the right decision when it most matters in your trading activities.
If you need further assistance of solid direction of beating the market to capitalize on your investment, might you be high net
worth individual with investable sums of 10 t0 500 million NAIRA
your prospects are at lowest risk between 35% to 40% adjusted
return. Good reading, but a bit technical to preserve on the winning streak. Goddluck. NB: swing the bell when the market kicks off, after lunch is the best times to gear your trading activities, but if you need further assistance to analyse the model that is consistent with frontier acceleration typical example is Nigeria, its not rare not to expect 5000% plus return
on low latency dispersion, within the statistical flow of market movement. My acknowlegement to the fact that derivative has not been mentioned in managing macroeconomic risk implied on the intraday trade. I am a qualified financier and still engaging in my continuing professional development in investment and financial studies.
A true right and helpful right up …. more power
This is a good piece of write up about most Nigerian forex traders. I followed the trend and testimonies of many Nigerians who dabbled into forex market trading as a get rich quick scheme, some without thorough fundamentals of the how the forex market plays out, most of them were misinformed about how the forex works with a lot of hypes centred on quick money making and the use lean capital to make large amount of money from the forex market, unscrupulous traders and brokers just to milk the unsuspecting eye or greenhorns in market place of their money.
Today, after learning my lessons from the happenings in the forex market, your write is well researched and information therein I will recommend for anybody in Nigerian who want to get involved in the forex market trading to read.
I found a global solution for myself and I am using and working with CashFx Group Forex Autotrading and eLearning Academy Company with their brokers called Axiances. Since I started with them in 2020, August I have never lost little or nothing in earning consistently till date. The amazing thing was that even during the COVID-19 pandemic enforced global lockdown we were in profit. Their business model is consistent with what you described how forex market trading should be carried out to get great results long time.
You just said it all. Thanks to you sir. Everything in life needs plans, patient and consistency
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