Get Rich Quick Syndrome: The major reason why Forex Traders lose money in Nigeria

By: Damian Okonkwo

The idea of people trading the Forex market as an investment package seems to have faded in the Nigerian ambiance. Many young Nigerians dabble into the Forex Market as an avenue to double their capital on a daily and weekly basis without first seeking to understand the market, its structures, and the fundamental factors that moves it. Forex seems to have replaced gambling with this set of traders in Nigeria. This has been tagged get rich quick syndrome leading to excessive loose on a regular basis.

Thoroughly imbued with this wrong mentality, many traders are compelled to take so much risk while trading the Forex Market. Some are pushed to use a very large lot size for entering a position. Others prefer to take multiple trades at once without any recourse to risk management. The aftermath of these dealings is that most lose money daily to the Forex market especially when the market moves a little pip against their predictions.

Major causes of the “get rich quick mentality” among Nigerian Forex Traders

Research has shown that some key factors have contributed to the excessive demand for quick profits from the forex market among Nigerian traders. Some of these reasons are seen below:

« Unemployment: The high unemployment rate in the country has led to many Nigerians taking so much risk than they could afford to bear. Most people who turn to forex trading today in Nigeria are jobless and see it as their full-time job. Hence they often expected high returns from the market-leading them to take so many risks.

« Poverty: Nigeria ranks the third poorest country in the world today despite the rich resources available in the country. Many poor people who dabble into forex see it as an opportunity to wipe out poverty from their generations which leads them to take so much risk.

« Debts/Loans unrepaid: Just as the Nigerian government has been known for borrowing more than the country could repay in centuries to come, the average Nigerian citizen is not left out in this borrowing too. Some have borrowed money to begin their trading journey while others have so many loans obtained yet to be repaid. This leads them to take so much risk while trading.

« High Economic Standard with low income: Generally there is a very high standard of living in Nigeria with little salary paid to citizens. This often leads the youth to dabble in gambling and others get rich quick business online. Of course, the result is that they keep losing money daily to the forex market.

« Greediness: Some Nigerian traders are not comfortable with the little profits they make from the forex market. They just want to make the highest profit possible every day. This has led many to take excessive risks while trading.