Selecting A Right Forex Broker – A Dynamic Activity
Whether you are a retail forex trader or a small institutional trader, we all need to trade through a forex brokerage firm. The bigger you are, the closer you get to the major market participants: banks, mutual funds, hedge funds, large investment firms. They occupy approximately 75% of the capitalization of the foreign exchange market. Some banks could be brokers. The remaining 25% are sole proprietorships like you and me, and small business businesses.
Selecting a suitable forex trading in Nigeria is not a static activity. It is dynamic based on one or more of the following factors:
-Regulated or unregulated forex brokers.
-What stage of your commercial career are you at? Trade for your own money or manage other people's money as well.
-Amount of its commercial capital.
-Services of a particular forex broker that meets your trading requirements.
Tax implications if you open a trading account with a broker domiciled in the US or UK or Switzerland or tax haven countries like Hong Kong, Singapore, British Virgin Islands, Bermuda, Cyprus, etc.
Unlike the equity and commodity markets, the foreign exchange market is poorly regulated. Regulation is voluntary rather than mandatory. Brokers that choose to be regulated hopefully attract more clients to open accounts with them. Having your fund deposited with a regulated forex broker certainly increases your fund's chances of safety. Details of this issue are covered in the "Safety of your funds" section.
If you are just starting or exploring a career in forex trading, there are many brokerage firm options for you today. Your goal at this stage is probably to test the water. You could deposit a couple hundred or thousands of dollars. This is a relatively small amount of business capital. However, as you progress in your trading career, tens of thousands or even hundreds of thousands or millions of dollars are large amounts of money, your biggest concern would be the safety of your fund.