Is Forex Trading Legal in Nigeria?

Is forex considered gambling in Nigeria?

👉 Before answering this question, we must consider the definition of “gambling,” which can be described as an activity where a person:

➡️ Places (a sum of money) at risk of being lost in a game or a wager

➡️ Engages in an activity in which one has a chance of winning or losing money or other valuables

➡️ Puts something (valuable or significant) in danger to accomplish something or get what one wants.

👉 The common theme that can be taken from this definition relates to “losing” as well as “risk”. The inherent thing about forex trading is that there are always risks involved, and it is the cost of carrying out business in forex trading.

👉 However, while the truth is that all forex market participants “gamble” when they trade forex, there are several differences between how these market participants “gamble” and how others take part in conventional gambling, and one such difference is associated with “probabilities.”

👉 Probabilities come down to engaging in transactions in which the potential gain is greater than the potential loss at any given time. In other words, increasing the likelihood of favourable outcomes.

👉 Thus, the greater number of “Confluence Factors” you have working in your favour on a particular deal, the greater the likelihood is that the trade will result in a profit for you.

👉 A gambler never knows for sure whether they will be successful, and unless they are intentionally dishonest, they tend to assume that the odds are always stacked against them. Their odds of winning are consistently worse than those of the casino, or they are almost equivalent to the house’s odds.

👉 Forex traders, on the other hand, are always brainstorming new trading techniques in the hopes of improving their chances of success in the market.

👉 They can make accurate forecasts of market movements with the use of a variety of analytical tools, which enables them to take a position that is sure to bring them a profit.

👉 After engaging in certain deft trading patterns, they are confident that they will eventually arrive at an overall position that is lucrative for them. This highlights the primary distinction between a trader in foreign exchange and a gambler.

👉 The people that participate in these two marketplaces are also highly diverse from one another and exhibit a variety of characteristics. The following are some of the most significant characteristics that distinguish them distinct from others:

➡️ Numbers

➡️ The Participants in the Market

➡️ The tools that are used

➡️ Emotions

➡️ Strategies used

Numbers

👉 The pursuit of financial success is the primary motivation for most individuals to choose any of these professions. Everyone has the goal of making a profitable investment, whether it is in the form of a bet they place or a position they take in the market that will result in positive cash flow for them.

👉 There is a significant disparity in the quantities of money moving around in each of these sectors. Traders from all around the globe conduct daily transactions totalling more than 6 trillion dollars on the foreign exchange market.

👉 The sums of money engaged in the gaming sector are not even close to being on par with such figures. This is a significant aspect that sets these two business sectors apart from one another.

The Participants in the Market

👉 Every industry has its own unique group of individuals that are involved in it. These individuals might be important or small participants, but they all contribute to the overall success of the endeavour.

👉 Retail traders make up most of the participants in the foreign exchange market. Individual investors from various regions of the globe who devise their own trading techniques to beat the market are known as alpha-generating traders.

👉 Another participant in huge financial institutions like banks and mutual funds, such as stock exchanges and stock exchanges. They contribute to the establishment of the legality of foreign exchange trading, and with such large participants, you can be certain that it is legitimate.

👉 On the other hand, gambling is fraught with legal complications since it is outlawed in many regions of the globe. Its members are limited to participating in unlawful underground operations, which casts doubt on the whole enterprise.

The tools that are used

👉 Although Forex trading has its own set of risks, you are fully educated about why you took a certain position. There are a plethora of tools available to assist you in accurately analysing the market, as well as many rules on how to establish and close trading positions.

👉 These change according to your trading strategy and analytical process. When employing technical or fundamental research, you might monitor market developments for many days or even weeks before deciding on a position.

👉 This demonstrates that there is no such thing as a fortunate deal, and they are all influenced by thorough market research. These tools assist a Forex trader to improve and make profitable transactions. However, gambling does not have any tools that can be used.

👉 There are no trends to research to make an educated selection, everything is up to chance, which does not seem to be a sensible concept.

Emotions

👉 The majority of those who gamble will, at some point, develop a gambling addiction. According to the findings of recent studies, this may be traced back to the feelings evoked by gambling.

👉 When a gambler enters a casino with the intention of gambling, their main goal is to walk out with a profit. Their judgment is clouded as a result, and they are ignorant that there is also the danger of losing money.

👉 Because there is no way to make educated bets and the outcomes depend entirely on chance, there is a possibility that they may end up losing all their money if the odds are not in their favour on a specific day.

👉 It is more likely to encourage someone to continue gambling since they will continue to do so until they become addicted to it, rather than discouraging them from doing so.

👉 However, things are different when it comes to trading forex. During one’s training, they will be required to learn how to keep their emotions and thoughts apart from the choices they must make.

👉 To make better judgments and start lucrative transactions, a trader must understand how to differentiate between greed and fear. This assures that there is no involvement of emotions, and a trader is free to walk away at any point if they so want.

Strategies used

👉 The forex market, like any other industry, is fraught with risk. Some believe that traders might be in a losing run for months, but you discover they made their deals without any plan in mind on correct assessment.

👉 These are traders who have bought into the notion that forex trading involves gambling. A trading plan is key to accomplishing your long-term objectives.

👉 Before putting any money into any transaction, first, perform a good analysis and analyse if it will assist you to achieve your ultimate and desired position. This will help you to make better-informed judgments on whether to engage or avoid.

👉 Stop Losses are one of the many components of the instruments you may employ to guarantee that deals are closed at the appropriate times. Gambling, on the other hand, does not entail any strategy since it is left to destiny to determine whether you will win or lose your bets.