suarasolo media Jalin Silaturahmi Dengan Informasi
The OTC Forex market is known to everyone. The daily trading turnover of this segment is about seven trillion dollars. Most of the operations are carried out by large banks, multinational corporations, investment companies and large hedge funds. Individual participants in the Forex market such as Alpari account for only about 5% of turnover. It seems insignificant, but numerically, it is $250 billion. What does Forex trading contribute in Nigeria, and why is this business popular there?
It may sound strange, but in the nineties of the twentieth century, there were quite a few private traders. With the development of communication technologies, their number began to grow rapidly. Also, Forex brokers emerged and provided individuals with access to currency trading.
Forex Brokers in Developing Countries
In advanced capitalist countries, exchange has existed for a long time; the activity of stock exchange brokers and speculators there has been considered normal for centuries. Since its emergence in the 70s of the 20th century, the new foreign exchange market has rapidly adapted to the existing financial system in European countries, dominated by Britain, the United States and Japan. Already in the nineties (with the advent of personal computers), the Forex industry has become commonplace in these countries.
In other countries, the dawn of this technology goes much later. In addition, this occurs unequally across countries due to differences in their economic development and national characteristics. In the countries of the former communist system and the socialist camp, the financial system was reinvented, so market relations have no traditions there.
At first, Western brokerage firms would not even serve customers from these countries. Therefore, there are local Forex brokers who take into account the level of knowledge and financial capabilities of their citizens.
The Forex industry began to develop in the former European colonies. Thus, Forex is currently popular in Southeast Asia – Vietnam, Philippines, Indonesia, Singapore and some African countries such as South Africa, Nigeria and Egypt. Nigeria, which is rapidly developing in this direction, deserves special attention. As incomes grow, many are starting to trade forex.
Reasons for Launching the Forex Industry
There are several reasons for the rapid spread of Forex trading with any commodity in the developing world.
1. Availability
To start trading, it is enough to have a computer, laptop or smartphone with internet access — no need to look for the nearest trading office. Information on training at any level is available to everyone, and start-up capital can be minimal. Access to other financial markets is much more difficult. It’s simplicity that determines the great popularity of Forex trading. Beginners do not need to deposit large amounts and can practice on a demo account.
2. Leverage
Access to the market for small amounts is possible thanks to leverage. Private traders come to Forex only with the intention of making money changing exchange rates — these are Forex signals. They don’t need the currency they buy; they are only interested in profit. On the other hand, Forex brokers are interested in attracting new customers with any investment reserves.
3. Technological advances
The rapid development of computer and Internet technology has made it possible to trade Forex from almost anywhere in the world. The software has been greatly simplified, and the trading terminal has become intuitive for any educated person. In addition, the trading program does not even have to be installed on the computer. The online platform can be accessed from any browser. Trading with mobile devices has become commonplace.
4. Liquidity
Forex currency is the most liquid commodity in the world. There are small differences in the liquidity of the currencies of different countries. But this is governed by higher commissions from low liquid currencies.
5. Communication features – Forex Trading
The rapid spread of the Forex industry has been made possible thanks to the Internet. Besides the fact that business is conducted via the Internet, social networks and forums have also become very important. The first acquaintance with the Forex market now occurs through numerous groups on Facebook, targeted advertising and communication on forums. In addition, the language barrier is practically non-existent. Forex brokers duplicating their sites in many languages; training and technical support are also available in all common languages.