The Best Forex Brokers in Nigeria
With the best forex brokers in Nigeria, you can join thousands of traders who are already successfully using the market to generate income.
Whilst forex trading in Nigeria is on the rise, it’s difficult to know who to trade with. In such a rapidly developing country, you find yourself faced with great brokers and scam ones too. How can you know who to trust?
The good news is that we’re here to help. We’ve navigated this tricky situation to bring you a list of the very best forex brokers in Nigeria. These brokers boast top-tier international licenses, excellent reputations, and competitive fees. They also accept deposits in Naira and even allow you to trade cryptocurrencies.
Best and most trusted forex brokers in May 2022
Best Nigerian forex brokers – Our winners explained
This list of forex brokers represents the cream of the crop, those that go above and beyond when serving Nigerian clients. To find them, we test hundreds of brokers against our rigorous methodology. Only those that score high in all departments make it to this page. In 2020, those were:
- HotForex – Best overall forex broker in Nigeria
- XM Group – Best broker for beginner traders
- FBS – Best broker for high leverage trading
How we choose the best forex brokers in Nigeria for you
Our testing process considers over 200 criteria points in ten main categories, including regulation, fees, and education. Besides this, we also award extra points in areas important to Nigerian forex traders. This includes the availability of Naira-based accounts, localized payment methods, and strong safety features.
Let’s inspect each of these areas to learn more about what you can expect from the best forex brokers in Nigeria:
- World-class regulation – Although the Nigerian forex market is unregulated, we ensure that all of our recommendations hold licenses from top-tier global authorities such as CySEC, FSCA, FCA, and ASIC. You can trust these brokers to operate responsibly and to arm you with fund protection mechanisms.
- Naira-based accounts – Opening an account based in Naira makes trading easier, as you needn’t deal with currency conversion rates. Whilst not all the best forex brokers in Nigeria offer NGN accounts, those that do score higher with our experts. Those that don’t must offer low transaction fees to compete.
- Localized payment methods – When trading forex in Nigeria, you need fast payment methods. How else can you respond to rapidly changing markets? To avoid delays, all of our recommendations accept wire transfers from the likes of Zenith Bank, Keystone Bank, Guaranty Trust Bank, First Bank Plc, and Diamond Bank. They also allow payments via Bitcoin, Perfect Money, and Webmoney.
- Competitive spreads on major currency pairs – As the Naira isn’t a popular currency for forex trading, our best forex brokers in Nigeria offer low fees on major currency pairs instead. Trade the EUR/USD, the USD/JPY, and the GBP/USD without paying extra.
- Other Nigerian trading opportunities – Besides offering forex trading, the best brokers in Nigeria also allow you to trade commodities, cryptocurrencies, and more. Not only does this allow you to diversify your portfolio, but it also allows you to engage with popular Nigerian assets such as Bitcoin and Crude Oil.
- Quality customer service – It’s important to know you’re in safe hands when trading. If things go wrong, you don’t want to be waiting hours for help. All of our recommendations offer customer support agents that speak English and who are available throughout the main trading sessions. We also award more points to forex brokers with offices in Abuja or Lagos, as this means you can contact them easily via post or in person.
- Fair Islamic accounts – If you’re a Muslim trader in Nigeria, we’ve got you covered. Every firm on our list offers Islamic accounts that are 100% compliant with Sharia law. They don’t charge swap fees, interest, or hidden fees.
Why is forex trading so popular in Nigeria?
Forex trading has become incredibly popular in Nigeria. Each day, retail forex traders in the country trade between ₦300-450 million. If you’re still unsure whether to join their ranks, discover what makes trading in Nigeria so special:
- Being in control of your own finances is more appealing than ever, given Nigeria’s high unemployment rate. Forex trading has a low barrier to entry, as you only need a small initial investment, an internet connection, and a decent mobile or computer. It gives you the freedom to live where you want and work when you want too.
- As Nigeria is only one hour ahead of the United Kingdom, it’s easy to trade during the London session. You can trade during normal business hours, so you needn’t lose sleep or time with your family and friends.
- Forex trading is a great way to avoid the Naira inflation rate. Currently estimated at 12%, losing this much wealth every year is painful. If you register with the best forex brokers in Nigeria, you can avoid this issue completely by keeping everything in a different, more stable currency.
- Forex trading allows you to take advantage of a liquid, yet dependable, market. You cannot say the same of the Nigerian Stock Exchange, where activity is unpredictable and often underhand.
How to start trading forex in Nigeria
To trade forex in Nigeria, you need three things:
- A good understanding of what forex is and how to trade
- A regulated and legal forex broker
- The right broker account for you and trading funds
Luckily, our experts can help you with all of that. Read the following sections to learn everything you need to know about trading forex in Nigeria.
What is forex?
Forex trading is all about speculating on the rise and fall of currencies against each other. Essentially, you buy and sell one currency using another to make a profit. Consider these examples with the EUR/USD currency pair:
- You sell dollars to buy the euro. Once the price of the euro rises in value, you can sell your euros for a larger amount of dollars than you started with.
- You sell the euro to buy dollars. Once the price of the euro has dropped, you can buy more euros for fewer dollars, leaving you a profit.
You always perform these transactions using currency pairs. With the best forex brokers in Nigeria, you can trade popular currency pairs such as the EUR/USD or GBP/EUR. You can also explore more exotic currency markets such as USD/ZAR, EUR/TRY, and CNY/USD.
Trading cryptocurrencies with the best forex brokers in Nigeria
Cryptocurrencies are another new market gaining popularity in Nigeria. As international transfers can be slow in the country, many Nigerians working for overseas countries are choosing to receive their income in Bitcoin. Like forex, keeping your money in cryptocurrencies also allows you to avoid the Naira inflation rate.
If you already own cryptocurrencies or have an interest in them, you can put our knowledge to good use with the best forex brokers in Nigeria. Besides forex, most of these brokers offer cryptocurrency contracts for difference (CFDs).
With crypto CFDs, you can speculate on whether you expect the value of a cryptocurrency to increase or decrease, without owning the cryptocurrency itself. Each time the price moves in your predicted direction, you’ll make a profit. If the price moves in the opposite direction, however, you’ll lose out.
Learn more about the benefits of cryptocurrency trading in Nigeria:
- As you can trade cryptocurrency CFDs without having to own the underlying coins, you needn’t purchase expensive cryptocurrency wallets and hardware.
- You can trade cryptocurrency CFDs with high levels of leverage. Leverage means that you only need to put down a fraction of the value of your trade. The broker loans you the rest to give you more exposure to the markets. Leverage is usually expressed in ratios, and most cryptocurrency CFDs come with a ratio of 1:20. If you wanted to place a trade worth ₦90,000, therefore, you would only need to use ₦4,500 of your capital. This allows you to make larger profits than you would if you traded the coins directly.
- As you can make predictions in either direction, cryptocurrency CFDs allow you to profit even when the price of a coin is falling. You won’t get this benefit if you purchase coins outright.
- Trading cryptos with the best forex brokers in Nigeria is safe as they are subject to regulation from top-tier authorities, such as CySEC, FCA, ASIC, and FSCA.
- You can use your trading platform’s research and analytical tools to increase your chances of success. Popular cryptocurrency trading tools include indicators, candlestick charts, and trend lines.
How are forex brokers regulated in Nigeria?
Currently, there is no central authority regulating forex brokers in Nigeria. While the Central Bank of Nigeria regulates wholesale foreign exchange trading activities, forex brokers don’t need a special license to operate.
This oversight from the CBN puts Nigerian forex traders in a risky position. Anyone can open up shop claiming to be a legitimate forex broker, gain clients, and then behave irresponsibly and corruptly. To avoid this risk, you must trade with a broker that offers regulation from a reputable international authority such as the FSCA, FCA, CySEC, and ASIC.
Do note that even if you choose one of our best brokers in Nigeria, you may have to trade with an arm of the broker licensed by a lesser-known authority, such as those in Belize and Mauritius. This shouldn’t concern you. So long as at least one entity of the forex broker has a license from a top-tier authority, you won’t have any issues.
How to open a forex broker account in Nigeria
Opening an account with the best forex brokers in Nigeria is usually quick and straightforward. To make this process even easier, follow our step-by-step guide.
- Select a broker and begin the registration process. Supply the broker with personal details such as your name, physical address, email address, phone number, date of birth, and National Identification Number (NIN).
- Complete a small questionnaire that asks about your income, employment status, forex knowledge, and trading aims.
- Upload proof of identity and proof of address documents. The former can be a copy of your passport or driver’s license, whilst a utility bill or recent bank statement will be necessary for proof of address.
Once you complete these steps, the broker will perform an identity check. This will take a few minutes, at worst a few days.
How to open an Islamic trading account
Islamic trading accounts comply with Shariah law by removing swap and interest charges. These accounts do not feature CFD trading opportunities either.
The registration process for Islamic accounts differs based on the broker. Some brokers allow you to select an Islamic account during the initial setup, whilst others require you to call customer service. Some may also request proof of your religious affiliation.
How much money do you need to start trading forex in Nigeria?
You can trade with some of the best forex brokers in Nigeria with as little as ₦20,000. In fact, some allow you to open an account with a deposit as low as ₦5,000, although we do not recommend doing this.
To get off to a good start, you need at least ₦120,000. The general rule with forex is that you shouldn’t risk more than 1% of your capital in a single trade. With just ₦20,000, you shouldn’t risk more than ₦200 per trade, yet with ₦120,000 you can risk up to ₦1,200 on each trade.
Whilst in both circumstances your individual trades will be small, you can see that trading with anything less than ₦120,000 means that you won’t have a lot of funds available. This means that you can’t place more than one trade at a time, and you don’t have a buffer against unexpected losses.
With our recommended amount, you have the flexibility to place a few trades at once. This spreads your risk, as you can trade unrelated currencies.
The risks of forex trading in Nigeria and how you can avoid them
Even if you take all of our advice and only trade with the best forex brokers in Nigeria, the nature of the market means that there are still risks to consider. Luckily, our experts are here to help. Below, you can learn more about some of the biggest risks you may encounter, and how to avoid them.
- Trading without training – You are, unfortunately, one of the largest threats to your profits. It may sound obvious, but if you trade without a firm understanding of how to do so, you can easily put yourself in a difficult position. Fortunately, the best forex brokers in Nigeria offer you educational materials and demo accounts. Use them thoroughly and then use them again. Practice is the only way to master forex trading.
- Low liquidity in the market – Although the forex market is one of the most liquid markets in the world, it can suffer lulls. Trading through these periods can be risky. As there are fewer people trading, it may take longer for the broker to execute your trades, resulting in missed opportunities or increased fees. To avoid this, trade only when the market is highly active. For Nigerian forex traders, this is from 7 AM to 6 PM WAST.
- Low liquidity on certain currency pairs – Periods of low liquidity can affect exotic currency pairs, as they are less commonly traded. This can cause huge spreads, even at the best forex brokers in Nigeria. To save yourself from high fees, stick to trading major currency pairs whilst you get to know the markets.
- Poor connectivity and missed trades – If your orders don’t go through on time, a winning trade can quickly turn into a losing one. To avoid this risk, you need two things, a forex broker with a great execution policy and an outstanding internet connection from the best Nigerian ISPs. In this industry, your internet connection and computer can make or break you.
- Emotional trading – Even the best forex traders will make risky trades if they allow their emotions to influence their decisions. The best way to ensure this doesn’t happen to you is to make a trading plan and stick to it. Before you trade forex in Nigeria, decide how much and how often you want to trade, and how much you can afford to lose. Once you’ve reached your daily trading limit, log out and come back tomorrow. No good trades happen without prior planning, so don’t get carried away.