Many Nigerians today dream of hitting a fabulous fortune from working on the Internet. While there is absolutely no harm in dreaming big, for some, it is sheer greed. Greed that makes them ready to believe just about anything they read or hear about making money online.
A case in point is forex trading in Nigeria. On my recent trip to Ibadan, I saw several advertising drives, aimed at recruiting forex traders. Huge posters and banners have defaced just about any available public space in some parts of the ancient city. Many of them were advertising “forex training”, while others were advertising e-gold funding/exchange.
Wikipedia describes the term Foreign exchange market (forex trading) thus:
The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex markets currently exceeds US$ 2–2.5 trillion . Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks.
It is indeed possible to make money from forex trading online but then what the “trainers” do is to massively hype the returns one could make from forex trading. Thus, many Nigerians are attracted because they are informed that they could earn very high returns on their investment capital.
These hypes have resulted in many loosing their money due to mis-information and have ended-up denting the reputation of the forex trading brokers to the extent that Fx Solutions (FxSol) had to stop dealing with Nigerians completely. A mail from FX Sol has been making rounds in online forums recently:
Thank you for registering for a practice account. However, FX Solutions, in an effort to help protect the citizens of Nigeria from fraudulent schemes, is no longer accepting live trading account applications from Nigeria.
FX Solutions is taking this action as the company has noticed a rapid increase in instances of fraud that promise unrealistic expectations in foreign exchange trading, while specifically targeting Nigerian citizens. Nigerian citizens should be aware that there are risks associated with all trading, and there is no methodology that can eliminate risk or guarantee performance.
If you are still interested in trading foreign exchange, please consider opening a practice account with another broker.
These “trainers” charge between 15,000 naira and 100,000 naira (between $115 and $781) for training sessions that last for between 1 day and 3 days! Now, how someone can learn the nitty-gritty of a sensitive activity like forex trading in 3 days (talk-less of 1 day), beats my imagination! What such “trainers” only do is to introduce their audience to the basics of forex trading and expect them to figure out the rest themselves. The charitable ones among them give their trainees some printed or CD tutorials, and thus the money spent on training is exhausted.
Do not get me wrong. Forex trading is real and a trillion-dollar industry. It is indeed possible to make money from the foreign exchange market. What Nigerians need to be careful about are scammers who would only give you rudiments and collect your money in the name of training.