Online futures trading platform in Nigeria
Is it possible to make money in investments and how can a newcomer do it? How can you make sure you don't lose your money and have financial security in the future? How to find profitable markets for investing and optimise risks? What are futures and how do they trade on modern exchanges? If you have ever asked yourself such questions, this article is for you. Let's find out together.
What are futures and how do you trade them?
The idea of agreeing to buy a commodity in the future at a certain price dates back hundreds of years. The first exchange for trading in futures, whose existence is well documented, was established in 1710 in Japan - it was a rice futures exchange. In the West, the first official exchange appeared in London in 1877, which was called the London Metals and Market Exchange. In the USA, the first official exchange for using futures appeared in 1848 and was called Chicago Board of Trade. It was mainly used for selling grain or cattle.
Today, a futures contract is an agreement to buy an asset with payment at the time of conclusion of the trade agreement and transfer of the asset into ownership after a certain period (specified in the contract). Each futures contract is characterised by the quantity of the underlying asset, the date of performance and the price. Futures impose an obligation on both parties to the contract.
The underlying asset can be:
- A certain number of shares;
- Stock Indices;
- Commodities traded on exchanges, such as oil;
- Interest rates.
There are two types of futures - settled (non-deliverable) and deliverable. The buyer of a commodity with a futures contract may make a profit by selling the futures, provided that the market price of the underlying commodity, by the time the futures contract is settled, is lower than the price at which the buyer will be obliged to buy the commodity. The Stock Exchange closely monitors all operations with futures and options. They supervise the settlement of futures and the corresponding delivery of the underlying assets.
All investment activities on a stock exchange entail a certain level of risk, which is something to bear in mind.
For the asset transactions referred to in this chapter, you need an investment brokerage account, which can be opened online. You can use virtual money to test your trading strategy.
Online futures trading platform in Nigeria
Before you start trading, it is worthwhile to research online futures trading platforms and choose the one that suits you best.
Modern futures trading platforms offer innovative tools to help you make quick trades and operate with the most sophisticated technical analysis tools.
These are specific programmes that are "tuned" to work with specific instruments, derivatives (futures and options). Unlike universal terminals, they are supplemented with professional add-ons that take into account the specifics of trading with derivative instruments.
The platforms allow you to place orders quickly. Their main functions are:
- tools for the analysis of exchange data;
- creating and simulating trading strategies;
- semi-automatic and automated trading;
- spread trading.
On the platform you can find out the information about quotes, market situation, you can manage your deals and accounts, check the effectiveness of manual and algorithmic strategies on the history of quotes. History of deals is saved in the platform and statistic report is formed.
The main criteria of good trading platforms are functionality, intuitive interface and comfortable design.
The more qualitative knowledge a trader gets, the better understanding of trading becomes. Consequently, opportunities for higher earnings grow. Almost all top trading platforms provide free training materials.
Financial markets are very volatile, so if something happens in them, it is advisable to find out about it as soon as possible. The alerts available on the best trading platforms are very helpful here. The idea behind it is that if the rate of an asset reaches a certain point, you will immediately know about it.
You will also get added value from the 24 hour support and custom chats that can be of help to newbies.
How to register on the platform?
When a user wants to open a trade, the system will ask to create an account.
The registration procedure is very simple - you only need to fill in a short questionnaire to get started. Sample list of questionnaire items:
- email address;
- first name; surname;
- country; city;
- telephone number (mobile);
- date of birth (only persons aged 18 or over are allowed to register).
It is not necessary to confirm the phone number and email at this stage.
Try a demo account
Nowadays, almost every online broker offers a free demo account. Sometimes, however, there are performance time limits or other features that are limited.
A demo account is designed to simulate trading with real money. It is therefore essential to choose a reputable provider.
The best demo accounts for stock trading have full functionality, meaning traders get access to the same markets, orders and features as when trading from a real account. More importantly, the best stock trading demo accounts reflect changes in real market conditions.
This means that the picture on the demo trading screen is no different from what those watching the real market see.
It is advisable to switch to a real account after you have learned the theory and made several successful trades with virtual money.
Funding a Live Account
Right from the trading platform you can request to open a real account to trade with real money. You will need to fill in some simple forms with your personal details, and provide proof of identity and residence address.
Select the 'Open a live trading account' option, then provide the details you require. With most of the modern exchanges, transferring funds to an account is a completely secure and safe process, with user details being protected. For your convenience, there are various ways to transfer funds: via bank transfers, internet banks, e-wallets and payment systems.
How to avoid risks when trading futures?
The risk of loss when trading futures can be very high. You need to decide if trading in futures is suitable for you based on your own financial situation.
Trading is the hardest way to make easy money. Such a conclusion is fully expressed in the statistical summary which gives disappointing facts: more than 90% of traders do not make money in the financial markets.
Having conducted numerous researches and analyzed the current situation, the analysts found out that the reasons for the traders' money losses on the futures market are absolutely the same.
Rules for successful futures trading if your goal is to take money out of the market without giving up your accumulated deposit on a regular basis:
- Make a clear trading plan (choose your trading instruments, loss-limiting order, determine your entry point, maximum daily risk);
- Learn how to interpret the news correctly (you must enter a position at the time of consolidation, when limit investors form the beginning of a trend);
- Focus on current positions with no reliance on past wins and losses;
- Do not make large orders with insufficient capital;
- Use stop orders;
- Match your entries into the futures market with different trend-finding tools and profit-taking positions;
- Apply money management techniques.
Professional traders devote an incredible amount of time to psychology and only occasionally get a glimpse of the rules of trading strategy. They use complicated indicators and other technical analysis tools. They study the market thanks to the price (primary ratio) and volumes, which allows them to anticipate a trend change and at the same time identify a major player in the asset.
In addition to the above, futures trading professionals note another key link which subsequently leads to spectacular trading. It is the common ability to pass all failures and stay in the market at all costs.
Novice traders often assume that futures trading is a fairly easy undertaking, requiring fundamental charting and quotation table skills. However, in 95% of cases the search for an easy and shortcut to enrichment in financial markets ends in a total loss of the trading deposit. And only the remaining 5% of futures traders choose the straight road leading to financial independence through exorbitant work.
Do you want to turn futures trading into a profitable and promising business process? Then you must understand one fundamental point that trading is the hardest route to unlimited cash, seemingly an easy and unencumbered trading process at first.
In this article we have defined the term futures, studied the history of futures trading, looked at the advantages of online trading platforms and the aspects required to fully understand the futures market. Many novice traders find these instruments confusing and complicated at first, but futures will always be one of the most interesting derivatives to raise capital with.
Get out of the field of illusion and into the world of facts, figures and statistics. Not a single trader with a subjective way of thinking has achieved success in trading, only an objective assessment of the market and their emotional state.
We wish all participants success and profitable trades on the spot and futures markets!