When is the Best Time to Trade Forex in Nigeria?
Forex trading sessions in Nigeria time

Trading strategies for different Forex Market times in Nigeria

Trading Strategies for Nigerians Overview

👉 It is all about time in forex trading. However, it is far easier said than done to time the market. When it comes to conventional stock markets, timing transactions around recessions and low-priced purchasing opportunities invariably end up costing you money in the long term.

👉 Prices will go up or down, but when they do so is a mystery because of the volatility of the market. It is possible to estimate the timing of these transactions with some degree of precision, but no technique is perfect.

👉 A broad variety of factors, such as government economic statistics and well-known chart patterns, may influence price movement and timing, but others, such as breaking business or economic news or rapid shifts in trader moods, can be difficult, if not impossible, to anticipate.

👉 To succeed as a trader, you need a technique that considers as many factors as possible and helps you discover chances when you can predict the timing of price changes with some accuracy—even though, in the long term, you are not going to get it right every time.

How to choose the right trading strategy

👉 Nigerian traders need to understand how to choose the right type of trading strategy and to help them, here are three elements they need to consider when evaluating a trading strategy:

➡️ Timeframe

➡️ Trading opportunities available

➡️ Overall Position Size

Timeframe

👉 Choosing a timeframe that complements your trading strategy is crucial. There is a significant difference between trading on a 15-minute chart and a weekly chart for a trader.

👉 If you are leaning toward being a scalper, a trader who seeks to profit from smaller market movements, then you should concentrate on the 1-minute to 15-minute charts.

👉 Conversely, swing traders are more likely to use a 4-hour chart in addition to a daily chart to identify good trading opportunities. Different trading techniques correlate to various timeframes (long, medium, and short-term).

Trading opportunities available

👉 When deciding on a strategy, you should consider how often you want to open positions. If you want to open a greater number of positions, you should concentrate on a scalping trading method.

👉 Conversely, traders who devote a greater proportion of their time and resources to examining macroeconomic data and fundamental issues are likely to spend less time in front of charts. Therefore, their favoured trading strategy is predicated on larger holdings and longer time horizons.

Overall Position Size

👉 It is of the highest significance to choose the ideal trade size. Successful trading methods need knowledge of your risk attitude. Risking more than you can afford is hazardous since it might result in greater losses.

👉 A common piece of advice in this respect is to establish a risk limit for every deal. For instance, traders often restrict their transactions to 1%, indicating they would not risk more than 1% of their account on a single deal.

Best Trading Strategies for Nigerians

👉 Once they have indicated a specific timeframe that suits their day, Nigerian traders can choose a position size and the number of trades they want to open at a certain time and over a certain period.

Using Stop-Loss Orders

👉 It is possible to allow your computer to act as your “trading buddy” and it is the most effective trading method for new Nigerian traders and those with limited time to trade.

👉 Because the foreign exchange market is notoriously volatile and hard to keep an eye on, it can be advantageous to be able to make use of trading software that enables you to put information technology to work on your behalf.

👉 Implementing stop-loss orders is another typical trading method. These orders safeguard your capital if the market makes an unexpected move in the opposite direction of your position.

Price Action

👉 Price Action is ideal for mobile Nigerian traders who can only log into their mobile app occasionally (every 10 minutes, or so). These short but frequent trading sessions could be favourable for putting a price action trading strategy into action.

👉 Price action trading is analysing the currency pair’s technicals, such as charts, to inform transactions. Traders can examine up bars and down bars, which are bars that are either higher high, higher low, lower high, or lower low, respectively.

👉 The presence of up bars in a price chart indicates an uptrend, while the presence of down bars indicates a downtrend. Other price movement indicators may include inside or outside bars.

👉 Trading based on a chart period that is most accommodating to your schedule is essential to achieving success with this method.

Taking fewer positions

👉 You must have a solid understanding of the factors that influence the exchange rates of your currency pairings and that you have put in the effort to have a thorough familiarity with the market.

👉 Subsequently, after gaining an understanding of the market and picking certain currency pairings to focus on, a strategy that involves choosing a small number of positions and maintaining them for an extended length of time should be considered wise for part-time traders.

👉 Stop-loss orders are another prudent method that should be used with all your transactions to reduce the amount of money lost if the market goes against you.

Watching out for longer-term trends

👉 Instead of looking at charts updated every hour or even every four hours, it is beneficial to keep an eye on longer-term trends (daily and weekly). Because of this, you will only need to glance at your computer once each day to trade successfully.

Use trading orders

👉 You can avoid missing out on chances to join or leave positions by setting limit orders, stop-loss orders, or other entry/exit orders. Most trading platforms support these orders and do not charge any extra costs for doing so.

Day Trading

👉 It is a term used to describe the practice of buying and selling currency on a single trading day. The forex market is where day trading is most often employed, but it could be used in any market. According to this technique, all negotiations should be started and finished on the same day.

👉 No position should be open for more than 24 hours, allowing traders to reduce risks. Instead, day traders are more likely to stay in the market for the full day rather than just a few minutes. In addition, during the 30-minute and one-hour periods, day traders generate trading ideas.

👉 For many day traders, the news is a primary source of trading ideas. Economic data, interest rate fluctuations, GDP numbers, and elections all have a significant impact on the markets.

👉 In addition to positional limitations, day traders often set a daily risk limit. A common choice among traders is to set a daily risk limit of 3%. The safety of your account and funds will be a top focus here.

Scalping

👉 Scalping is a popular trading approach in the Forex market that focuses on tiny market fluctuations. This strategy comprises starting many transactions to reap little profits on each one.

👉 Scalpers strive to increase the number of smaller victories to enhance their profits. This is the opposite of holding a position for hours, days, or even weeks.

👉 Scalping is a popular method in Forex because of its high liquidity and volatility. Investors seek price movement in a dynamic market to benefit from minor price movements.

👉 This kind of trader is focused on making 5 pips or less on each transaction. However, they anticipate that most agreements succeed since the revenues are consistent, reliable, and easy to attain.

👉 Scalping has disadvantages, such as the inability to stay in a transaction for an extended period. Therefore, scalping takes a lot of time and effort since you must constantly check the market for new trading opportunities.

Position Trading

👉 Position trading is a method of long-term investing. This kind of trading, unlike scalping and day trading, is concerned with the underlying economic realities.

👉 Minor market movements are not considered since they do not affect the broader market picture.

👉 Position traders are likely to monitor central bank monetary policies as well as political developments to spot cyclical trends.

👉 Only a few trades may be initiated by the most successful position traders over a year. These trades, on the other hand, are likely to have profit targets in the hundreds of pips range.

👉 We propose this trading strategy to traders who are willing to wait weeks, months, or even years to observe how their position plays out.