How to Trade Cryptocurrency Legitimately in Nigeria: Complete Guide

Cryptocurrency trading has become one of the biggest ways to make money online for many young people today. 

Nigeria has one of the highest crypto trading volumes globally, even with local laws limiting cryptocurrency trading. 

If you are here to learn how to trade cryptocurrency legally in Nigeria, you are in the right place. This article covers how to trade cryptocurrency effectively and legally in Nigeria.

What is Cryptocurrency Trading?

Crypto trading is the buying and selling of cryptocurrencies on a crypto exchange. It is also an act of monitoring the price movements of the cryptocurrency market to make a profit.

To begin cryptocurrency trading, you only need a crypto wallet and a crypto exchange. As a beginner, you can sign up on the Yellow Card App and find practical cryptocurrency training at the YC Academy to get started.

As long as restrictions exist, learning how to trade the cryptocurrency market in Nigeria is vital. For example, commercial banks in Nigeria have limitations on crypto transactions that you need to know to trade crypto safely.

How To Trade Cryptocurrency In Nigeria Legally

In 2021, the Central Bank of Nigeria passed a law that barred banks in Nigeria from getting into crypto-related activities. This made trading cryptocurrencies like bitcoin, ethereum, and Tether (USDT) difficult.

For instance, buying and selling cryptocurrency with a debit or credit card is no longer allowed. Today, crypto traders in Nigeria trade bitcoin and other cryptocurrencies through peer-to-peer (P2P) exchanges.

Here, you exchange your crypto for their cash, while you receive their money and give them the crypto equivalent. To avoid trading crypto illegally, you will need to register on a legit peer-to-peer crypto exchange that allows you to trade the cryptocurrency market.

Read Also: How To Buy Bitcoin in Nigeria Without ID verification

How To Trade Cryptocurrency Effectively: Easy Beginners Guide

Since you decided to start trading in the cryptocurrency market, you need to know how it works and how to trade crypto effectively.

For starters, the cryptocurrency market is very volatile, meaning the price of tokens can rise and fall in seconds.  This makes most traders lose money when using the wrong trading strategies. 

Below are helpful tips to trade successfully in the crypto market;

1. Register on a Legit Crypto Exchange

Before trading crypto, use a good crypto exchange that ensures the safety of funds and provides a good trading experience.

Yellow Card allows you to trade bitcoin, USDT, and other cryptocurrencies at the best rates. The platform offers a zero fee for P2P transactions.

Sign up for a free Yellow Card account to trade on Yellow Card.

2. Build a Crypto Trading Plan

The next step to trading cryptocurrencies is to have a trading plan. A good crypto trading plan should include your motive for trading; are you trading hype or conviction from proper research?

A trading plan should also define your goals for trading the crypto market, e.g., the amount of money you want to make and the trading styles in use such as position, swing, day, or even dollar cost averaging.

3. Choose A Crypto Trading Strategy

As part of effective trading, you need to have a crypto trading strategy before going into the market.

• Dollar-cost Averaging
  Dollar-cost Averaging requires an investor or a trader to buy from the crypto market at intervals.
• Scalping
  Scalping is a trading strategy that allows crypto traders to enter and exit a trade quickly to profit.
• Day Trading
  This involves a trade where you take positions within the market and exit within 24 hours. 
• Arbitrage Trading
  In arbitrage trading, you buy a cryptocurrency such as bitcoin at a low price, then look for another exchange where the price is higher and sell.

4. Monitor Your Crypto Trades

As a crypto trader, you must track your trades constantly so you can easily track what is happening in your transactions and wallet.

5. Don’t Trade Crypto With Emotions

Most traders lose money in the cryptocurrency market trading with emotions. An excellent way to avoid trading cryptocurrency with emotions is to not trade with emergency money or money you can’t afford to lose.

Best Crypto Trading Platform In Nigeria: A Yellow Card Overview

Using the best exchange while trading cryptocurrency in Nigeria is very important. Things like security and transparency are some of the things to look at; other factors include:

• Trading Fees:
  The platform charges little or no fees when carrying out Peer-To-Peer transactions. Always stay on a crypto exchange that will not charge a high transaction fee on their platform.
• Security:
  While trading crypto on Yellow Card, third parties do not participate in the transaction. This is because the exchange acts as an escrow to ensure you don’t lose your funds.
• Payment Methods:
  Yellow Card allows you to trade crypto with your local currency through P2P. You can freely and safely fund your account with naira.
• Volume:
  While carrying out crypto trading, use an exchange with good volume trades. With over 1 million users, Yellow Card has active users across Africa that buy and sell bitcoin and other cryptocurrencies.
• Transparency:
  Yellow Card provides you with the updated price, ratings, supply, and demand before you start making any transactions.
• Privacy:
  When buying crypto on platforms like Yellow Card, your personal information is not made public.
• Customer Service:
  Yellow Card prioritises its users and has a robust customer care staff base that responds to user needs 24/7.

Pros and Cons of Cryptocurrency Trading

Pros of Cryptocurrency Trading

• The crypto market is highly volatile, and with great strategies, you can exploit the market to make a profit.
  
• There's transparency in the crypto market; you will see the amount you invested, the amount you made in profits, and the amount you lost.
  
• While trading cryptocurrencies, you are in total control of what to do with your money; you can either decide to lose or profit in the market.
  
• You can also copy the trades of those who are successful with trading cryptocurrencies and then trade them.
  
• There are many alternatives; you can choose to do day trading, scalping, dollar-cost averaging, swinging, and any other type of trade.

Cons of Cryptocurrency Trading

• The major disadvantage of cryptocurrency trading is that the market is highly volatile, and you can lose all your money at once.
  
• Some trading strategies take a lot of work; you must practice for a long time to learn how they work.

How To Manage Volatility While Trading Cryptocurrency

The crypto market is very volatile, meaning that the rate at which the crypto price rises and falls is fast, which makes many cryptocurrency traders lose money. 

This led to the creation of stablecoins such as Tether (USDT) and USDC. A stablecoin is a type of cryptocurrency that has a stable price. They are backed in reserve by an externally stable currency such as the dollar at an equal ratio to maintain a fixed price. 

With stablecoins, cryptocurrency traders can now buy Stablecoins like Tether (USDT) to preserve their gains and not lose them due to volatility.

Stablecoins like USDT also help you save in dollars through crypto since it is backed by the dollar at an equal rate. This means that 10 USDT is equivalent to 10 USD and vice versa. 

Read also: 5 Reasons Why You Should Save In Dollars (USDT)

Trade Cryptocurrency In Nigeria With Ease

Cryptocurrency trading is a great way to make money online in Nigeria.

Despite the ban on cryptocurrency for banks, crypto activities grew by 17% after the ban. As cryptocurrency adoption increases, trading with approved exchanges becomes the safest option. This makes Yellow Card one of Nigeria's safest platforms to trade cryptocurrencies.

By now, you know how to trade cryptocurrencies, the different strategies, and the pros and cons of trading cryptocurrencies.

Trade Bitcoin Legally Today