Online trading is growing in Nigeria with millennials showing interest in variety of instruments like Nigerian/NSE Stocks, Forex, Bitcoin and even foreign equities.
Nigerian investors these days are embracing new technologies for investing and trading online. There are many local apps & platforms like Chaka, Wealth.ng, Hotforex, Forextime etc. that allow trading on various instruments & financial markets including stocks, indices, FX and commodities.
This developed investing and trading ecosystem has helped sparked lot of interest in investing and trading.
There is growing sense of investing savvy mentality among Nigerian youth and new investors these days are looking towards modern tech stocks like Apple, Amazon and liquid instruments like forex & bitcoin. They want to take financial freedom into their hands and don’t want to lose out on capital market opportunities.
But with all this increasing interest and participation among general public, there is a growing need for investor education and concerns of investor safety arising from lack of proper education among masses on investing related concepts and risks.
Most beginner investors don’t know where to begin and what to learn and they often end up investing without proper knowledge & research or let others invest for them. Some even end up taking wrong advise from others – who are not qualified to give financial advice, these people sometime have ill intentions or personal benefit of giving wrong advice. While some investors read & learn from unreliable sources which is even risky. These mistakes increase the risks of investors by great extent.
We look at the ways and resources, one should learn about investing and get started with trading in Nigeria.
1) Read Financial Articles, Forums, Websites & Publications
This is a quite common & popular way to learn about investing, online trading among beginner investors. Many investors start their learning through these online mediums.
There are various websites, forums and publications that cover basic investing tips, beginner tutorials, finance/trading/investing articles, daily market update, analysis and news. Some of these websites are industry specific, while others focus on all the capital markets & investment basics.
But, it’s important to note that the resource or website you are reading must be published by a reliable publisher and must be trusted in the industry.
Few examples of reliable industry learning & news websites include: Investopedia, fool.com, wsj.com (Wall Street Journal), ft.com (Financial Times), Seeking Alpha, Reuters, Cnbc.com, Bloomberg.com, Forbes.com, Yahoo Finance, Google Finance, Investing.com, Tradingview, Marketwatch.com, Kiplinger.com, Investor.gov etc.
There are also some specialized investing websites like Baby Pips, ForexNigeria.net which cover basics of the forex market, and some online investing communities or forums like – Forex Factory where experienced forex traders share their experiences, analysis & beginners can participate in the discussions, ask questions to clear their doubts.
2) Read Trading & Investing Books
Another effective way to learn about trading and investing is through books. There are many popular investing books by famous writers covering basics to advanced concepts.
Few examples of famous books that every beginner investor must read are – “The Intelligent Investor” & “Security Analysis” by Benjamin Graham, “Beating the Street” by Peter Lynch, “The Essays of Warren Buffett” by Warren Buffet, “How to Trade in Stocks” by Jesse Livermore, “Poor Charlie’s Almanack” by Charlie Munger.
There are also books on specialized investing topics like on forex there are books like “Forex Trading” by Jim Brown and “Day trading and Swing trading” by Kathy Lien that beginner forex traders can read.
There are also many free books on the investing subject available on the internet covering the basics and specifics of each instrument.
Financial Regulators, exchanges & brokers often publish free books & courses to educate new investors. For example – NSE publishes basic investing glossary, SEC Nigeria publishes their research on Nigerian Capital Market.
SEC of the US publishes beginner guides for investors, Nasdaq also publishes free guides on investing. You can download these free books from the SEC.gov, investor.gov, nasdaq.com/smart-investing
3) Follow the latest market news
Another way to learn trading & investing is to follow market news from websites. You will hear about terminologies like buy/sell, options, shares, buyout, IPO, bonds, mutual funds from the news.
You will learn to comprehend, understand what news affect the markets and what moves the value of the various market instruments.
4) Take an investing/trading course or Get a Professional Certification
You can also take a profession trading course or get a professional certification from global institutes like CFA Institute, GARP or on websites like EDX.
CFA (Chartered Financial Analyst) is a professional qualification/certification for financial and investment professionals, it has global legal recognition and many investment firms & banks hire CFA certified individuals for analysis and advisory roles.
Likewise, FRM (Financial Risk Manager) certification from GARP is also very highly respected in the investment industry for investment risk analysis.
EDX.org offer online courses on investing from prestigious universities.
NSE Nigeria also offers X-Academy course on Capital Markets to individuals looking to invest in the markets. US Exchange Nasdaq also offers an investor education program which you can enroll online.
5) Gain Experience with Demo or Simulated Trading
You can also gain experience on trading using a demo or Simulated Trading Account with a broker. Most of the popular forex brokers in Nigeria offer a free demo account with demo trading balance, that can be used to practice or to test your trading strategies and learn about trading tools, charts, market analysis & platform.
These demo accounts allow you to trade in the almost real life like trading environment without investing actual money, your broker will offer you free virtual funds to invest on the market instruments.
Main benefit of demo account is that you don’t lose any money while trading on demo. You can learn how the market movements happen and what news/events affect the market movements, how the market trends work, how you can spot a up-trends or down trends and how it corresponds to charts and news you see in the trading platform.
This way you can learn to devise a trading strategy to make a profit and even test it risk free on demo.
6) Learn from experts in Social Trading & Copy trading
There is a fairly new concept in trading that is popular these days, it is called Social Trading or Copy Trading.
In this you can follow expert investors/traders on your trading broker like Etoro or on websites like Tradingview.com, you will see their live feeds and charts and what orders, the expert trader you follow is placing on these platforms.
From this, you can see & learn what patterns and strategies these traders apply and how successful they are. If you like their strategy and results, then you can copy the same in your account using Copy Trading tool at the broker that offers Copy or Social Trading.
7) Study Professional Traders & Investors
Another popular way, the investors in the markets learn is by following the professional or successful traders.
Like many Stock traders in the US often follow the lead of big-name wall street investors like Warren Buffet – they mirror every move he does in the market, they will follow his news where he is investing, if he has bought some stock in some company or sold some stock, this helps them spot a trend.
It is much like having a role model and following his/her strategy or investment philosophy.
8) Subscribe to Premium Content
Websites like Reuters, Bloomberg, FT, WSJ offer professional analysis, content & insights into various industry and economic data with their Premium Subscriptions, that you can use to learn about the market, with deeper insights from industry experts and financial journalists