Stano Emmanuel Olubayo is the chief executive officer of Dcrocstyle Nigeria Limited, a foreign exchange trading firm. He started this business 15 years ago and has trained over 50 students. In this interview with SIKIRAT SHEHU, he talks about prospects and risks in FX trading, and the need for efficient regulation of brokers by Nigerian authorities, among other issues.
Tell us about your company.
Dcrocstyle Nigeria Limited is a company established for money management. I started the business 15 years ago. We are playing in the foreign exchange market where we have over $5.3 trillion exchanging hands in a day. It is the largest market in the world, where we have big players like banks and other financial institutions as participants. This is relatively the most volatile market.
Tell us how your business works.
We trade directly. The margin is what turns out as our profit. If you want to know the exact rate of exchange, ask us, not bureau de change traders. The fluctuation per time is what gives us profit.
In the foreign exchange market, you can make as high as 90 percent of your investment in one single month while some months you can make as low as 10, 20 or 30 percent. You don’t run with the market. When you pick your trade, you will set some risk levels because for every single trade you pick in this foreign exchange market there must be a particular risk involved.
If, for example, I have a million naira in this business and I want to pick a trade, I will set a ‘Stop Loss’ which is the risk limit that I can bear as a trader. I set a Stop Loss of N 5,000, whether I’m online or not, even if the market is going the other way. The highest that could affect me is N 5, 000 and I have N995,000 to fall back on. This is a way to protect my funds because if I don’t set stop loss, all my funds are exposed to the market.
Tell us management strategy?
Every business has its own particular risk, and telling people about the risk involved is part of being sincere. Setting a risk limit is the main secret. If you don’t set a risk limit, you are most likely to be doomed.
There is what we call ‘resistance’ and ‘support’. So, if you pick a trade from your support, I set my Stop Loss below my support because the support is a
strong point that I don’t expect price to go below so that if any volatility or adversity happens in the future, it will just take me out with that little loss.
If any news is released in America or elsewhere and there is market volatility, it would empty my account. This is what those unprofessional traders don’t utilise because they don’t want to let go of a little amount, but they end up losing all that they have in their account.
About 97 to 98 percent of the time, it will go to your projected direction and make money for you. I have trading statement to prove that.
What is average profit you make in a month?
There are some months we make high profit and some months we make low profit. When the profit is high, we use that to compensate for the month when profit is low.
Do you trade in other commodities?
Yes, we trade gold, silver, platinum, diamond, oil and other instruments.
What else do you do in your company?
What we do here is not Forex alone; we train people on how to analyse the charts and all other instruments when they are given any stock chart to enable them analyse and make forecast of where the stock would be in the next two to three years, all other things being equal. What we are trying to let the world know is this: Scammers can do better things with their time on the internet and it pays them more to earn legitimate incomes.
What are the challenges in the Forex market?
Doing this business requires strong internet connectivity because there is a broker who is the intermediary between you and the market.
When you place your fund with a broker and he puts the fund in your
trading account to trade, if the network is not good, you may not be
able to pick necessary trade you want to, at that moment.
Also, the issue of unregulated brokers in Nigeria is a problem. We have about 30 international brokers in Nigeria, but there are so many scam forex brokers who only make profit from your loss.
What do you think can be done to address the challenge?
We are calling on government, security agencies, regulatory commission and CBN to work hand in hand to regulate the Forex brokers in Nigeria.
