Despite Forex trading has been very popular in Nigeria, many traders still don't have the needed knowledge to make serious amount of money. We at Eagle Global Markets will provide you not only with the opportunity to trade in naira, but also make an effort to teach you all basics (...and secrets) to trade Forex like a pro!

The Beginnings Of Forex Trade In Nigeria

In Nigeria, one of the biggest economies of Africa, Forex Trading was earlier dubbed an insignificant term (in the 19th century) for some individuals. At that time, Forex Trading was considered good and affordable only for the big cats of the market, such as huge financial institutions, and those wealthy Nigerian people, who also showed interest in Forex Trading. Two hundred years forward, and nowadays, we have a situation in which Forex Trading is a completely flexible playground, in which all people of Nigeria can participate. If you’re someone who’s not familiar with Forex Trading and its terminology, there are some things you will have to understand well before indulging in earning serious cash. For future reference, remember that the terminologies we’ll use are only metrics that measure how good you are at Forex Trading.

Basic terms for Forex Trading:

Cross rate

You can see us writing a lot about cross rates and the most popular trades of each day, and in case you haven’t known, the cross rate is the currency exchange rate occurring between two currencies. What makes it different from an exchange rate is that both of the currencies in the cross rate are not the official currencies of the country that’s giving the quote. For example, let’s say you’re doing research on an exchange rate between the British pound and the Euro (the default currency of the European Union) within the USA. The exchange rate you’re given is actually a cross rate, because the United States of America do not use the pound nor the Euro as a standard currency. On the other hand, if you’re looking for an exchange rate between the UK pound and the US dollar, then that would not be considered a cross rate, since the dollar is the official currency of the USA.

Exchange Rate

The exchange rate is something you see all the time, and in all exchange offices; it’s the value of one currency expressed when compared to another global/foreign currency. For example, if you see USD/NGN: 314,95, that means 1 US dollar is worth 314.95 Nigerian Naira.

Leverage

Leverage is basically the ability to ‘boost’ your account to a position higher than what your total account margin says. Example: a trader has a margin of $5,000 in his trading account. He then opens a $500,000 position, which means he leveraged his entire account by 100 times. Scales are used more often here, so that would make it a 100:1 leverage. Likewise, if he opens a position of $1,000,000 with an account margin of $5,000, his leverage scale is 200:1. Logically following, if you increase your leverage, both your losses and gains on the market are magnified dramatically. Here’s how you can calculate how much leverage you used: just divide the total value of your open positions by the total margin balance you have in your account. Let’s say you have an account margin of $10,000 and you open a standard lot of USD/JPY for $100,000 (that’s 100,000 base units of your chosen currency; USD in this example), then your leverage ratio is how much? 10:1 (diving $100,000 / $10,000 gives us that). That’s all for leveraging.

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