Skip to main content

Is Forex A Worth-While Investment For The Average Nigerian?










If you live in Nigeria and you actively use social media, odds are on that you have probably heard the term ‘Forex’ being used around a lot, from shady people hitting you up promising that they will give you an 100% returns on your investment if you invest in Forex through them to someone on social media bragging about how they made millions off investing in Forex.

Forex is one of those terms that seems to be shrouded in mystery, the average person knows the word Forex but would be hard pressed to come up with a suitable explanation for it or how it works. Overtime an even more pressing question has appeared, Is Forex another word synonymous with scam like MMM? Should I be investing my hard-earned money into Forex? Today, we’d be breaking down for you how exactly Forex works.

First things first, what Is Forex?
Let’s give you a quick analogy on how Forex works, Say you leave Nigeria and go to Dubai for a vacation, when you get to Dubai, you are obviously not going to spend Naira over there as they don’t recognize the currency for spending in Dubai. No, what happens is somewhere along the line, you exchanged your Nigerian Naira for the Dubai Dirham so that you can spend the Dubai currency over there.

Basically, you exchanged one currency for the other, to you the process of exchanging your money was relatively simple, but overall it’s not that simple, there is a global market structure in place that made the exchange simple for you. It is in this marketplace that exchange rates (how much naira makes a dollar) are determined, it is in this marketplace that currencies are being exchanged and traded against each other on a global scale. And the market is called the FOREX market. The word “FOREX” is basically a mix of two words, Foreign Currency + Exchange.

On how Forex trading works, the whole process of trading currencies is an immensely volatile one, like any other commodity, the more a currency is in demand, the higher the value it has, but the world we live in as an highly unpredictable one, there is a myriad of things that can happen in a short span of time and can’t be seen coming that affects the value of a currency, a currency that had high value yesterday might be of little worth the following day, there is a steady and constant stream of information that affects how the market operates.

 In truth, Forex traders regularly incur massive losses, losses are inevitable, one person’s win is another person’s loss, only a select number of people ever become really wealthy through trading Forex, there is a lot of technical & mathematical analysis involved in Forex trading, it takes years to become an expert Forex trader and the learning curve is quite steep, taking online course or reading a book on Forex is not going to cut it. It has often been said that only 10% of Forex traders make significant profits to actively fund their personal finances

So in conclusion, while Forex is obviously not a scam in the way that Ponzi schemes are, it is a high risk, highly volatile trade environment where anything can happen, the odds are usually stacked against the retail investor, and only few people stick at it long enough to make good money at it, for every seeming success story you see on social media, there are thousands of burn stories in the back-ground of people who lost their money trading Forex.

Is Forex trading something you should consider trying out? Well, if you are not risk averse and you have the patience and fortitude to understand in detail how the market works, build enough expertise and technical knowledge but for the average Nigerian looking for a side-hustle and has a low-risk appetite, well it is not something that we’d advise you to do in the least.

And if someone tells you they can help you invest in the Forex market with the promise of guaranteed returns. Well, we believe you have read enough to be able to make your conclusion.



Labels:

Popular posts from this blog

The Law of Demand and Supply For wealth making (Oyedamola Taiwo) For F&K Savings

The Law of Demand and Supply For wealth making. Next to the introduction of economics as a course is the exposition to how the demand and supply rules and moves an average economic system. I am definitely not here to bore you with economics jargon, I want to tilt your mind in a direction it has probably scarcely explored. This is how it works in the goods market; there is a producer on one side trying to make profit by offering a good/service and on the flip side of the coin is the consumer willingly looking for a product to feed his/her satisfaction in exchange for value. The two parties will have to meet and bargain. Before the transaction can be sealed, the basic requirements of the two parties must be met i.e, the producer must earn profit and the consumer satisfied with the product. Now, you have gotten the basic gist, let me exercise your imagination just a little bit. You want money right? I do too! Now, there is an imaginary money land with producers willing to give ou...
Read more

Meet our customer of the month for the month of may - Famoofo Seyi.

Don't just take our word for it when we tell you that saving with us makes hitting your finance goals really easy. Meet our customer of the month for May, Mrs Famoofo Seyi, an entrepreneur based in Ibadan who has found staying focused on her finance goals much easier since she started using our mobile app, in her own words she has been able to save towards particular goals and smash them without stress and her business and financial lifestyle have greatly improved as a result. Be like Famoofo Seyi and join the ranks of those who save smart and better with F&K Savings, you too will find smashing your money goals not stressful at all. Thank you, Mrs Famoofo Seyi for being such an amazing customer
Read more

The 80/20 rule: Apply it to your finances and change your life, by Olamide Oseni.

A couple of hundred years back, an Italian economist by the name of Vilfredo Pareto discovered something really really interesting that was going to change how we understand the world. He discovered that he could measure the relationship between cause and effect precisely in mathematical terms (80/20). I know that probably sounds a bit mystifying and confusing, it was for me too, so to break it down further what he discovered was that 80% of results come from 20% of efforts. You are probably as shocked about this and if you are honest a bit doubting too. What this means for you is that: - 80% of the money you make comes from 20% of the time and effort you put in. - 80% of your products are the ones bringing in 20% of the money you make. - 80% of your customers bring in 20% of your income. And it also applies to everyday life too: - 80% of the world's wealth is in the hands of around 20% of the world's population. You probably wear 20% of your clothes 80% of the ...
Read more