By Chris Cammack Author Information Updated: May 29, 2020

The Nigerian Securities and Exchange Commission (SEC) has so far made no move to provide oversight and control of the Forex trading industry in Nigeria, despite publicly commenting on the potential for abuse in an unregulated Forex market.  Until such time as the SEC offers guidance to Forex traders, and a legal framework for Forex brokers, it is advised that trades register with internationally regulated brokers.

Here is a list of the most trusted international brokers - each offering the security of segregated funds, negative balance protection and best practices when it comes to customer service and assistance for new traders.

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  • Broker
    AvaTrade

    AvaTrade  - Best Forex Broker In Nigeria

    REGULATED BY
    ASIC ASIC
    FSCA FSCA
    B.V.I FSC B.V.I FSC
    FSA FSA
    Trading Desk Type
    Trading Conditions
    11111
    Minimum Deposit
    GBP 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    Good value, beginner-friendly and hugely respected all over the world, AvaTrade is one of the most reputable brokers in the industry. With support for the leading trading platforms and top-quality multilingual support, AvaTrade has built a brand on a solid reputation and continues to add to that reputation with the recent addition of AvaProtect - an automated loss-protection tool - to its product lineup.

    AvaTrade offers trading in Forex, commodities, cryptocurrencies, exchange-traded funds, options, bonds, and equities and is a good choice for any type of forex trader ranging from beginners to scalpers and intraday traders to long-term traders.

    Pros

    • Good for beginners
    • Well regulated
    • Low minimum deposit

    Cons

    • Dealing desk
    • Limited education
    AccountSpread FromCommissionExecutionMin. Deposit
    Islamic1.2 pipsNoneInstantUSD 100 Account Details
    Professional0.9 pipsNoneInstantUSD 100 Account Details
    Retail0.9 pipsNoneInstantUSD 100 Account Details
  • Broker
    XM

    XM  - Most Trusted Broker

    REGULATED BY
    CySEC CySEC
    ASIC ASIC
    IFSC IFSC
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 5
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    XM Group has achieved substantial growth since opening in 2009, earning 1.5 million clients in 196 countries. XM’s operational philosophy is aimed at client satisfaction and low client turnover; they earn client loyalty through award-winning 24/5 personal customer service, varied account types and competitive trading conditions.

    Regulated the FCA, CySEC and ASIC and the recipient of many industry awards, XM Group stands out from a crowded field of market maker brokers for their customer service and educational support.

    Pros

    • Well regulated
    • Excellent education
    • Wide range of assets
    • Fast and free withdrawals

    Cons

    • Dealing desk
    AccountSpread FromCommissionExecutionMin. Deposit
    Micro1.0 pipsNoneInstantUSD 5 Account Details
    Standard1.0 pipsNoneInstantUSD 5 Account Details
    XM Ultra Low0.6 pipsNoneInstantUSD 50 Account Details
    XM Zero0.6 pips$7.00InstantUSD 100 Account Details
  • Broker
    Pepperstone

    Pepperstone  - Best Trading Conditions

    REGULATED BY
    FCA FCA
    ASIC ASIC
    DFSA DFSA
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 200
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    Founded in 2010, Pepperstone is an Australian ECN broker known for tight spreads, ultra-fast trade execution and broad platform support. Pepperstone's award-winning, 24-hour support provides the foundation for its excellent customer service, where personalised assistance is available via several methods.

    As our highest rated pure ECN broker, if you want to pay a small commission for tighter spreads, you won't find a better broker than Pepperstone.

    Pros

    • Well regulated
    • Tight spreads
    • Great platform choice
    • Wide range of assets

    Cons

    • High minimum deposit
    • Limited market analysis
    AccountSpread FromCommissionExecutionMin. Deposit
    Razor0.0 pipsAUD$ 7ECNUSD 200 Account Details
    Standard1.0 pipsNoneECNUSD 200 Account Details
    Swap-free1.0 pipsNoneECNUSD 200 Account Details
  • Broker
    IronFX

    IronFX  - Most Assets Available

    REGULATED BY
    CySEC CySEC
    FCA FCA
    ASIC ASIC
    FSCA FSCA
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    With a huge range of account types, a good micro account and over 80 tradeable currency pairs, IronFX has something for everyone. A globally recognised Forex broker with award-winning education and market analysis, IronFX has also recently introduced market execution accounts with ultra-low spreads.

    For beginners who want to learn to trade on either the MT4 or MT5 platform, and experienced traders looking for strong international regulation, IronFX is an excellent choice in a broker.

    Pros

    • Well regulated
    • Tight spreads
    • Wide range of assets

    Cons

    • Expensive withdrawals
    AccountSpread FromCommissionExecutionMin. Deposit
    Live Fixed Spread2.2 pipsNoneInstantUSD 100 Account Details
    Live Floating Spread1.1 pipsNoneInstantUSD 100 Account Details
    Live Zero Spread0.0 pips$18InstantUSD 500 Account Details
    STP/ECN No Commission1.7 pipsNoneECN/STPUSD 500 Account Details
    STP/ECN Zero Spread0.0 pips$7.50ECN/STPUSD 500 Account Details
  • Broker
    FxPro

    FxPro  - Best Trading Platforms

    REGULATED BY
    FCA FCA
    CySEC CySEC
    FSCA FSCA
    DFSA DFSA
    SCB SCB
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    One of the most respected Forex brokers in the industry, well regulated by the FCA and CySEC, and with over 870,000 client accounts in 173 countries. FxPro is a powerhouse in the industry and very well respected among traditional brokers.

    With MT4, MT5, cTrader and a browser-based platform, a reasonable 100 USD opening deposit and outstanding customer service, FxPro also offers competitive spreads - often as low as 0.6 pips - to match profitability with security.

    Pros

    • Well regulated
    • Great platform choice
    • Tight spreads

    Cons

    • Limited education
    AccountSpread FromCommissionExecutionMin. Deposit
    FxPro cTrader0.45 pips$4.50MarketUSD 100 Account Details
    FxPro MT41.2 pipsNoneMarketUSD 100 Account Details
    FxPro MT51.52 pipsNoneMarketUSD 100 Account Details
    Islamic1.2 pipsVariableMarketUSD 100 Account Details
  • Broker
    HotForex

    HotForex  - Best Education

    REGULATED BY
    CySEC CySEC
    FCA FCA
    FSCA FSCA
    DFSA DFSA
    FSC FSC
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 5
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    An ECN/STP broker regulated by multiple major authorities including the FCA and CySEC, HotForex has built a reputation among traders for its stable, fair, secure and transparent trading environment. Excellent educational and analytical material is available for both visitors and clients, and customer service is world-class.

    Listed as one the Top 100 Companies by World Finance Magazine and with an award for Business Excellence 2015 (World Confederation of Businesses), HotForex is not just celebrated by their industry peers, but also by the financial industry as a whole.

    Pros

    • Low minimum deposit
    • Tight spreads
    • Well regulated
    • Good range of accounts

    Cons

    • Limited base currencies
    AccountSpread FromCommissionExecutionMin. Deposit
    Micro1.0 pipsNoneMarketUSD 5 Account Details
    Islamic1.0 pipsNoneMarketUSD 100 Account Details
    Premium1.0 pipsNoneMarketUSD 100 Account Details
    Auto1.0 pipsNoneMarketUSD 200 Account Details
    Zero0.0 pips$3.00MarketUSD 200 Account Details
    HFCopy1.0 pipsNoneMarketUSD 300 Account Details
    Premium Pro1.0 pipsNoneMarketUSD 5000 Account Details
  • REGULATED BY
    ASIC ASIC
    CySEC CySEC
    Trading Desk Type
    Trading Conditions
    11110.5
    Minimum Deposit
    GBP 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    FP Markets is an ASIC-regulated, STP broker with simple account options and an exciting set of tools for traders with higher minimum deposits. Spreads are tight, even on the Standard Account, and the lack of dealing desk intervention for all accounts removes any concern over conflict of interest.

    Both the MT4 and MT5 platforms are supported and trader education and market analysis are well-presented, structured and useful. Overall, FP Markets is an excellent choice for beginner and more experienced traders alike.

    Pros

    • Well regulated
    • Tight spreads
    • Good range of accounts
    • Great customer support

    Cons

    • Expensive withdrawals
    AccountSpread FromCommissionExecutionMin. Deposit
    Standard IRESSN/A pips$10 AUD min, then 0.1%STPUSD 1,000 Account Details
    Platinum IRESSN/A pips$9 AUD min, then 0.09%STPUSD 25,000 Account Details
    Premier IRESSN/A pipsNo min, then 0.08%STPUSD 50,000 Account Details
    RAW0.0 pips$3.50STPUSD 100 Account Details
    Standard1.0 pipsNoneSTPUSD 100 Account Details
  • REGULATED BY
    FCA FCA
    ASIC ASIC
    Trading Desk Type
    Trading Conditions
    11110
    Minimum Deposit
    USD 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms

    Regulated by both ASIC and the FCA, FX Giants is a trusted and reliable brokerage.  With support for MT4, and tight spreads on their higher deposit accounts, FX Giants is a good broker for the average individual looking to trade, without much support of educational material to get you going. 

    Pros

    • Well regulated

    Cons

    • Limited education
    • Limited range of assets
    • Limited platform choice
    AccountSpread FromCommissionExecutionMin. Deposit
    Absolute Zero Plus STP/ECN0.0 pipsUnknownMarketUSD Unknown Account Details
    Absolute Zero STP/ECN0.0 pipsUnknownMarketUSD Unknown Account Details
    Micro Account1.1 pipsNoneMarketUSD 100 Account Details
    0 Fixed Spreads0.0 pips$18.00MarketUSD 500 Account Details
    STP/ECN 0 SpreadUnknown pips$7.50MarketUSD 500 Account Details
    STP/ECN No CommissionUnknown pipsNoneMarketUSD 500 Account Details
    Premium0.7 pipsNoneMarketUSD 1000 Account Details
  • Broker
    REGULATED BY
    CySEC CySEC
    FCA FCA
    ASIC ASIC
    Trading Desk Type
    Trading Conditions
    11000
    Minimum Deposit
    GBP 200
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms
    • etoro

    eToro pioneered social trading in 2012 and has been widely recognised for making the social trading experience as smooth and engaging as possible. It has since grown to become one of the largest Forex brokers in the world, and its success has made it clear that many traders view an active and helpful community as an essential part of their trading strategy.

    eToro has won multiple awards for innovation, and as cryptocurrencies have become more popular, has introduced a wide variety of cryptocurrency CFDs to traders.

    eToro's trading model is quite different from most other brokers and may take some time to get accustomed to, but if you are looking for a fun and simple social trading experience, then eToro is the broker for you.

    Pros

    • Well regulated
    • Good for beginners
    • Innovative trading tools

    Cons

    • Limited education
    • Wide spreads
    AccountSpread FromCommissionExecutionMin. Deposit
    Professional1.0 pipsNoneMarketEUR 200 Account Details
    Standard1.0 pipsNoneMarketUSD 200 Account Details
  • Broker
    REGULATED BY
    FCA FCA
    CySEC CySEC
    ASIC ASIC
    MAS MAS
    Trading Desk Type
    Trading Conditions
    11100
    Minimum Deposit
    GBP 100
    Customer Support
    • Website Language: English
    • Support Language: English
    Trading Platforms
    • Plus500

    With 50+ Forex pairs available, tight spreads and fast execution, Plus500 is a popular broker with both its new and long-standing customers. Award-winning customer service is available 24/7 and the Plus500 platform is web-based with no need for any downloads or setup, making this a good provider for those starting out who want to keep it simple. 

    Plus500 has one account with a 100 USD minimum deposit requirement and keeps simplicity at the core of its business.

    Pros

    • Well regulated
    • Wide range of assets

    Cons

    • Limited education
    • Limited account options
    AccountSpread FromCommissionExecutionMin. Deposit
    Standard0.7 pipsNoneInstantUSD 100 Account Details

We pride ourselves on giving good advice, and we always put our readers first. When choosing partners, we do our research according to our review process which covers areas such as regulation, trading conditions, and the product offering.

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Our business model never influences our opinion of any partner, and the partner selection and review processes are separate. The compensation we receive from partners may affect how our lists are arranged, but the reviews are genuine, and the data is accurate. Our opinion can not be bought, and we always put our readers and their financial livelihoods first.

Open

How Forex Trading Works

The name Forex is taken from the two words Foreign and Exchange. Simply put, this is the buying and selling of currency pairs in order to make a profit. The most popular traded pair by volume is the EUR/USD. This is where the Euro is pitted against the U.S. Dollar. Let us say the USD is currently worth $1.08, that means that for every EUR you spend, you will get $1.08.

The goal is to BUY low and SELL high for a profit, or indeed to SELL high and BUY low. That’s because with Forex trading you can go long or short, meaning you can trade when markets are rising or falling.

Forex vs. Stocks

Let’s compare that for a second to the stock market. With stock trading, you are actually purchasing the underlying asset, for instance, the Netflix Stock. When buying an asset you will only profit when the price of that asset rises. Each share of Netflix is expensive. At the time of writing, you can buy 1 Netflix share for $436. It’s hard to get sufficient exposure to the market unless you have a huge amount of capital to start with. With Forex trading you can often start with just $100 minimum deposit.

Margin and Risk Management

Most brokers offer you the facility to trade with margin, using leverage. This effectively amplifies the value of your capital, and it also amplifies the risk too. So for a $20 trade, if you are using leverage of 1:100, this will multiply your trade 100 times. $20 x 100 = $2000.

Risk management is perhaps one of the most important lessons you will learn when trading Forex. It is in effect, how to make your capital last as long as possible and how to take as much profit on the way. Almost every broker offers risk management tools on their platforms. These include the stop-loss order to control losses if trades move against you, or the Take Profit feature to capture profits when the trades move in your favour.

Brokers work across different regions and under different regulatory authorities. The best known European licensing bodies include the FCA in the UK and CYSEC in Cyprus. In Australia, the regulatory body for Forex is known as ASIC.

Forex Trading in Nigeria

Now we will skip across the globe to Nigeria, as that is what you came here for. We will look at this from three angles:

  1. Are there laws regulating Forex trading in Nigeria?
  2. What is the role of the Securities and Exchange Commission (SEC) in Nigeria,
  3. Have there been instances of Forex scams perpetrated in Nigeria?

Let’s dive in.

Is Forex Trading Legal in Nigeria?

Forex trading in Nigeria is legal and there are neither laws that support it, nor prohibit it. In fact, they seem to positively encourage it. A recent statement made from a source in the Nigerian presidency encouraged youths to go into Forex trading, as a means of generating foreign currency to back up the nation’s dwindling reserves.  

Nigeria’s foreign revenues come mainly from crude oil sales (95%). The collapse of crude oil prices has hit the country’s financial position very badly. The Federal Government of Nigeria is pressed to balance her budget and has had to downgrade the crude oil price benchmark twice already in 2020.

The Central Bank is also pressing to have banks convert remittances and foreign currency earnings of individual and corporate account holders into the local currencies, at the point of withdrawals. That’s so the US Dollar equivalents can be made available to the Central Bank to shore up the depreciating foreign currency reserves. The government in Nigeria is also keen on taxing proceeds of trading and has recently passed a Finance Law to broaden the scope of taxation.

So there is no legal framework which guides or regulates Forex trading in Nigeria, Nigerians are free to trade Forex with any Forex brokers of their choice.

The Role of the Nigerian SEC

The financial market regulator in Nigeria is the Securities and Exchange Commission (SEC). This body regulates the Nigerian Stock Exchange, the bonds market and the operators within the equity trading industry. Nigeria’s financial markets are not as robust as you would find in the Western world. Short selling is not permitted, and the SEC has not made any moves to regulate the Forex market or other exotic financial trading products. Rather, it has been content with providing disclaimer warnings to the public, asking them to only invest in markets approved by the SEC and only to trade with money they can afford to lose. You might by now be building the picture that there is a huge regulatory lacuna in the Forex industry in Nigeria.

Scam Forex Brokers in Nigeria

The regulatory lacuna has led to a proliferation of Forex broker interest in the country, and also unlicensed money managers, signals providers, introducing brokers and schemes which resemble Ponzi-style operations.

A number of renowned Forex firms have entered the country and established local branches, including Instaforex, Alpari, Liteforex and Avatrade. ACM Brokers also opened shop in Nigeria in 2019. Strangely, these firms are not licensed by the Securities and Exchange Commission to offer Forex trading to Nigerian traders. Rather, they are riding on the licenses of their parent firms in Cyprus and other offshore locations to deliver their product offerings to the local market.

These Forex brokers in Nigeria are not the problem though, as they have conducted business largely with respectability. The biggest scam operations in the Forex market in Nigeria, border on the so-called “trade for me” business models, which are basically a system where someone offers to trade Forex accounts for others with no money management licenses. SEC provides licenses for money managers in Nigeria, but it is virtually impossible to see any one of these “money managers” with an actual license.

In the last three years, three companies have come into the market offering returns of up to 30% per month for money lodged with them. The companies say they will invest your money into the Forex market. The biggest of these companies is MBA Trading, which has hosted a number of high-profile events in which top-ranking members of the Nigerian government have attended. The company claimed it had an SEC license, but in a strange twist, the SEC named them as an unlicensed company and warned the public against doing business with them. Those who claim to have been paid regularly by MBA Trading have hailed them as the best thing to have ever happened to the Nigerian Forex industry, but critics say their mode of operations and returns paid to clients (which exceed average returns on Forex trading) smack of a well-oiled Ponzi scheme waiting to unravel.

Trading with Offshore Brokers in Nigeria

Apart from the Forex brokers mentioned above which are local branches of Forex firms, almost all Forex trading in Nigeria is offered by offshore brokers. There has been quite an evolution in terms of who has been considered the best Forex broker in Nigeria, over the last 15 years. The first offshore Forex broker that offered trading in Nigeria, which commanded a wide section of the market in 2005 was Marketiva (now defunct). This was followed by Northfinance (now FxPro). There has been a tilt towards using Cyprus-based brokers, but the ESMA rules implemented in 2018 are now driving local traders in Nigeria towards the offshore locations of the British Virgin Islands, St. Vincent and Grenadines, Vanuatu and similar locations.

The Importance of Regulation

Prior to 2010, the Forex market in Nigeria was hit by many scams and local Forex traders lost millions of dollars to offshore brokers who simply disappeared with their clients’ funds. There is now better awareness about the need to use brokers who are regulated. However, many local traders still patronize unregulated brokers who tempt them with over-the-top bonus offers. Some established names in the local financial markets have begun to lobby the SEC to follow the examples of Kenya, South Africa and Mauritius, by enacting regulatory protocols specifically for the Forex market.

However, Nigeria is a very ethnically diverse country and certain activities such as the operations of companies in the financial markets are dominated by certain ethnic nationalities. Getting bills to back regulation of such industries to pass in the Nigerian Senate and House of Representatives usually requires a lot of collective bargaining that sometimes has to cross these ethnic lines. This makes it not only a difficult proposition but also a lengthy process. A case in point is a bill that seeks to regulate Nigeria’s highly controversial oil sector, which has still not been passed close to 20 years since its introduction.

Naira Forex Brokers and Naira Forex Accounts

It can be notoriously difficult to source foreign exchange in Nigeria. The sale of Forex to individuals is tightly regulated by the Central Bank of Nigeria (CBN), which arbitrarily fixes the amounts that can be sold to regulated Bureau de Change operators without prior notice. Also, the CBN has set reporting standards that require banks to report to the National Financial Intelligence Unit, any transaction deemed suspicious. The process of documentation and the bureaucracy behind the process has driven many frustrated Forex traders to the parallel market, where foreign currencies are sold at premiums of up to 25% of the official exchange rates.

Some of the Forex brokers in Nigeria have taken the initiative to allow their clients to fund their accounts in Naira. This has been so successful that any broker that offers the Naira funding option is now regarded generally as the best Forex broker in Nigeria. Naira accounts have removed the entire bottleneck associated with foreign currency operated accounts. They have also made it easier for traders to calculate their risk and returns.

Islamic Accounts

Forex trading is conducted mostly by Nigerians from ethnicities in the mostly Christian South of the country, with very little participation from the mostly Muslim North. Therefore, Islamic accounts are not considered an important consideration among the Nigerian Forex trading population. Most Muslim investors prefer to use the Jaiz Bank, Nigeria’s only Islamic-investment compliant financial institution, to run their investments.

Opening a Forex Trading Account in Nigeria

The process of opening a Forex trading account in Nigeria is much like everywhere else. Apart from filling the online form, which normally takes a few minutes, verification of accounts has become easier over the years. There used to be a time when Forex brokers in Nigeria required a notarized copy of the international passport, as the only recognized document to prove identity. But things have changed. A reform of the licensing system for drivers in Nigeria has made the drivers’ license an internationally acceptable document for the purpose of identity verification.

Addresses can be verified with a utility bill or a bank statement, with a 6-month period being the acceptable duration of validity.

How we Rate Forex Brokers in Nigeria

We base our decision on a variety of parameters which include the below:

Broker Type

ECN trading accounts are generally too expensive for the average Forex traders in Nigeria. Most Forex traders in Nigeria have probably been taught with the MT4 platform, which is a preserve of retail Forex brokers and therefore is the platform of choice for many users. Therefore, market makers dominate this market and look like they will continue to do so for some time to come.

Account Types

A large percentage of the market tries out trading with only a few hundred dollars. Therefore, the best Forex broker in Nigeria would be one that provides various account types, which include a micro account to cater to this market.

Trading Platforms

As mentioned previously, MT4 is the most popular platform among Forex traders in Nigeria. Other platforms such as the MT5, cTrader, Currenex, ActTrader, NinjaTrader, etc. have all failed to gain traction in the Nigerian forex market.

Broker Fees

Studies have shown that Forex traders in Nigeria are not too mindful of spreads. Therefore, a reduction in spread costs does not seem to play an important role in deciding who the best Forex broker in Nigeria would be.

Customer Service

Some brokers targeting the Nigerian market now have local support channels, where users can reach representatives who understand the needs of the local populace. This is a crucial ingredient in the marketing and distribution of Forex trading products to the local populace.

Education and Research

Education and research are fast becoming the backbone of market penetration for Forex brokers in Nigeria. However, the local brokers appear to be struggling to deliver this. Most of the education and research output has been through physical seminars. But these appear tailored solely towards bringing sign-ups without delivering extra value. Some offshore brokers are capitalizing on this and delivering education and research using experts. Webinars and online content are also being deployed to a greater degree.

Summary

Forex trading in Nigeria is legal but unregulated, which puts a greater onus of protection of accounts, on the account owners and not the providers.

At any time, the SEC may decide to pull off a surprise by regulating the Forex market in Nigeria. But at the moment, offshore brokers are gradually gaining access to this market using local partners. Traders should aim to understand what the Forex brokers in Nigeria offer and which ones best suit their objectives.

Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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