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Artificial Intelligence and Profit in Forex Trade

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JULIANA AJAYI writes on playing in the foreign exchange market, especially with the use of robots

Foreign exchange traders have said that the forex market1 may come with a lot of risks, but has proven to be very lucrative.

Despite the losses incurred while trading, some of the trading analysts, who operate forex academies and training centres, affirm that though the business comes with a lot of risks, it is still profitable.

Like crypto like forex, when risks are considered. But stakeholders still draw a line. On the difference between crypto and forex, Matthew Okoidegun, a forex coach and trader with Matino Forex, explained that the forex market is centralised while the crypto’s is decentralised, noting that both crypto and forex are currencies.

He said, “The central bank determines the forex rate and circulation; but for crypto currencies, it is the people behind the project, most importantly sentiments.

“The major difference is that forex is regulated by the central bank, while crypto isn’t. It is more or less controlled by you and I, based on sentiments. If we agree that a crypto currency is valuable, we will keep adapting to it and the more the adaptability of aa particular crypto, the more the worth.”

According to Okoidegun, crypto is almost like the stock market, which is expected to appreciate, whereas in forex, you don’t expect the value to keep appreciating.

His words, “I think forex is the fastest way to make money, while crypto is the safest way to make money. You can use forex as a business, but crypto as an investment.

“Playing in the financial market is very risky; it may lead to huge losses. However, risk is not on the investment, but on the investor. You can prevent losing money by following a strategy; knowing what to do at a certain time. It means you understand the market.

In 2021, some people adopted the slang trending in the crypto world, “buy the dip”. Even people who just started trading were saying “buy the dip.”

He added, “If you don’t understand the dip you’re buying from, your money will be dipping. It’s more or less understanding the charts or technicalities before thinking of investing.”

Youths contemplating going into the forex market must be willing to take the risks and ready to bear some losses at the beginning of their journey into the forex world.

According to Statista, a database company, the unemployment rate in Nigeria is estimated to reach 33 per cent, against 32.5 per cent in 2021.

Okoidegun said, “For starters, trading is an opportunity to earn extra income. However, research has shown that 85 per cent of traders lose money daily.

“Before you think of going into it fully, you need a proper knowledge. And be wary of where you learn from because we have a lot of expired mentors out there, who only make money through teaching. Watch who you learn from. After learning, you practise what you’ve learnt through demo trading, and when you have a proven result, you can invest in it as an additional source of income. If you are able to triple that account, you can choose to face it fully because there are a lot of opportunities around trading.”

He also explained the importance of a broker in the forex market, noting that a broker is a firm that gives you access to the financial market. They also provide a trader access to the financial market.

“To start out as a forex trader, one must have a good forex education, smartphone or a laptop, and an Internet connection,” he advised.

Another forex trader, Ayanwale Sadiq, said, “Forex is broad, the market is volatile, which is a lifetime skill which deals with people’s emotions and psychology.”

According to Sadiq, a trader should never trade what they cannot afford to lose. He, however, reiterated that as a forex trader, the benefits are weightier, which includes a lifetime trading strategy, financial freedom, account money management and self-employment.

He noted that for him to suggest forex as a full-time opportunity would be dependent on individuals’ decision.

Ola Jamiu, a forex trader with Trade Addict, said, “Forex market is a place where different currencies are traded. Crypto, on the other hand, is nothing but money; digital money. In the forex market, we trade one country’s currency against another. We have over $6.6tn in the market.

“Forex is risky, very risky. Before one can venture into it, one has to learn the skill. Earning comes after learning. The cost of learning FX is huge; it is not something you learn in a week and turn to a professional.”

According to him, one trick to succeed in the FX market is by sticking to one strategy. Jamiu noted using different strategies as unhelpful in the market. He affirmed the financial freedom inherent in FX trading.

For the uninformed, the forex market operates Monday through Friday. It closes on Friday night and opens on Sunday night.

“Forex gives freedom and the pay is top notch. Imagine staying at home and making someone else’s salary in one day.

“As a beginner, it is better to learn forex as a side hustle. One will lose a lot of money at the beginning, which is why it is important to have another source of income. One can be a full-time trader, but that depends. It is the trader who gets to decide in the long run if he is ready to go full-time in the forex market,” he said.

Speaking on the importance of a broker, he explained, “A broker is an intermediary between the trader and the market. This is so because forex is not a place where the trader just runs into and starts transacting business. One has to go through an intermediary, which is the broker. A broker gives the trader access to the financial market; both live and demo. Brokers offer live and demo accounts.

“When we talk about demo accounts, it is mainly for practice, pending the time one is ready to go active. Trading a live account is not easy because it is very emotional. This is so because you have funded the money used in trading through your broker.”

He advised beginners to use a demo account. Then as time goes on, they get to fund the live account.

His words, “Ability to control one’s emotion is also very important. Brokers are very important because a forex trader funds and withdraws through a broker.”

In using a broker, caution must be applied, due to the existence of unlicensed brokers.

It was also recommended that a mobile phone should be used when actively involved in forex, noting that a smartphone can be used anywhere and at any time, unlike the PC, which cannot be used everywhere.

Just like other professions, a good mentor is needed in the forex market.

Jamiu said, “It is also important that before you go into forex, you get a mentor. You can learn forex on your own. If you choose to learn on your own, it’s going to take longer time than with a mentor.

“With your mentor, you can use five to six months,”  he added.

Trading with robot

To understand the trend in the forex market, that is the use of robot to trade, Okoidegun said, “Artificial Intelligence, also known as Intelligence Prime Capital IPC, is a software where robot does the trade for you and you get a certain percentage of your profit every month.

“Robot trading, also known as algorithmic or automated trading, is a computer-assisted trading system that allows traders to rely on computers to carry out user-defined activities such as entry and exit by defined rules.

“The AIA BOT System, according to IPC, works by aggregating market information, transaction volume, and other relevant data to accurately predict market trends. This defines the strategy the robot is using, which is important when it comes to forex trading.”

Despite the effectiveness of the robot so far, some expressed fears that the performance of the robot is bound to discontinue in no distant future.

Among those who expressed such concerns was a trader simply identified as Tayo, who explained that having a positive outcome from trades placed by the robot cannot guarantee future profit.

He said, “Robots are programmed with the application of some indicators and market behaviours. The problem, however, is that a robot cannot be effective forever.

“The robot can only work for a period of time because the market changes from time to time. Therefore, as a trader, you need to have solid basic education on forex to manoeuvre your way in the forex market.”

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