Hopefully this issue has not been trashed too many times.
I am a young graduate, no job and looking for something to get my hands on to do, I have canvassed many options and right now the one thing staring me in the face is to learn how to trade the foreign exchange.
But so I don't make a mistake I would love you to help me paint the real picture of what it is all about and its viability. Around me in the university I finished, there are students who shot to fame in a matter of months and when I ask the same answer keeps coming, "Na forex" but then we began to hear that this guy owed people as much as 20 million naira and ever since then I have been really skeptical about it. I know no business comes with risks but I would love an established trader, to let me know the real risks and strategies with which I can help myself get there.
Thanks.

My advise is for you to be your own broker. Forex is forex, trade in Dollar VS Naira you dont need to transfer any money or seek an online broker. Simply by dollars in naija when its low and sell when its high. Those online brokers are hard hit by the economic down turn they are like sharks waiting to dive at your cents.
Where do you think the local banks make their money from? they trade in local forex, that way they can control their destine and its always 70% a win, win situation. local forex is more lucrative than stocks. The down turn is that it is risky in terms of security within the country. Make sure no body knows what you are doing, so you dont get visitors at night.

Well, Forex is not as easy as you think. I am not trying to discourage you but you have to bear in mind that you have 95.5% chance of loosing out.

Why?

Good question!

For you to be successful as a beginner, you must undergo;

Basics of Forex: I mean what is forex, how it works, different currency pairs. When to trade them and when not to.

This should take you at least one month of intensive study and dedication, of course you need to download a Trading Platform (Meta4) from a Forex Broker (InterBankFX, FXPro, Alpari e.t.c) ,Internet Access, and a PC for this.

Read up articles and information from Forum about the market, economic news and about trading systems.

From there try to develop your own Trading System, I mean your own way not other people's way of winning your Trades in your Demo Account or at least 3:1 Win to Loss ration consistently. Don't rush to invest as this  should take you at least another 4 months.

Now here is the Golden Ratio that Separates 95.5% Lossers from 4.5% Winners;

That your trading system is 70% efficient is not enough for you to be succesful. Why?

Trade and Money Management:

Most Succesful Trading System has at least 2:1 or more Loss/Profit Ratio. Some traders don't put this into consideration why some don't even think of losses only one way (Profit). When you target $500 (10% of Equity) , be willing to loose $1,000 (20% of Equity).

If your trading system efficiency is 70%, i.e you win 7 and loose 3 out of every 10 trades.

If the first 7 trades are in profit, and the last 3 are Losses, you will have a profit of $3,500  - $3000, which is $500 Profit or 10% Profit.

Lets reverse the case, If the first 3 trades were looses, your account Balance will drop to $2000 i.e 60% Loss.

In this Scenario: Anxiety will take charge of you, as you will be thinking of your huge losses which will make you commit more with the hope that the next 7 trades will be good. Some will commit the same $500 per Trade not minding that this amount is now 25% of Equity ($2000), While some may even Commit $1000 (50% of Equity) in order to make up the looses.

For the fact that what you are trading is forex and not selling crayfish, the chances that the next trade will loose is 65% and if it does your account will wipe out just like that.

This is a common average traders mindset (95.5) and of course average Nigerian are not exceptional to this.

HERE IS THE SECRET THAT WILL MAKE YOUR 70% TRADING SYSTEM EFFICIENT.

Equity: $5,000 as our Instance here

Commitment: $25 i.e 0.5% of Equity

Profit Target Per Trade = $25

Loss Target Per Trade = $50

If the First 3 Trades were looses you will have $150 Losses i.e 3%  Loss of your Equity

What if the First 6 Trades were losses, you will have $300 Loss i.e 6% Loss of Equity, Giving you enough equity muscle $4850 or $4700 to trade the next 7 or 14 profitable trades respectively.

If you trade 60 Trades a Month, according to the system you will have:

42 Winning = 1050 and 18 Loss Trades = 450

Therefore Your total net Profit will be 1050 - 450 = $600 or 12% Profit Monthly

Greed will make most people say $600 per month is too small why not $600 a day.

If you apply the law of compound returns after 100% Profit to your trading system;

After 4 Months your account will hit %100 i.e $10000

After 8 Months Your account will hit %300 i.e $20000

After 1 year, Your account will hit %600 i.e $40,000.00

Now tell me how many business in this country started with N850,000 ($5,000) will give you N6,800,000.00 ($40,000) in a year.


So my advice for you is that you need to sacrifies at least 8 months. 1st 3 months for your training and building of your trading system and the next 6 months to demo trade. Some will say 6 months is too much to Demo Trade but I will bet it's worth it, that's the risk. if you can maintain at least 200% Profit after 6 months then I will bet you will be succesful.

Hope this information guides you well in your decision.