You have probably heard about the new business in town; online forex trading in Kenya. In fact, it has become so popular that it is threatening to overshadow every other online earning venture in Kenya.
Nairobi has the highest number of online forex traders in Kenya. But this number is still less than expected, more so considering the number of Kenyans who are asking questions about it.
Needless to say, the trade is enjoying the limelight and will soon become one of the best investment opportunities for any interested person.
Here are just some of the very few benefits that you stand to reap by taking action to invest in online forex trade right now.
- Forex Trade Markets are Open 24 Hours- What this means is that you can adjust your lifestyle to trade at the hours that best suit you.
- High Liquidity:-Forex trade is the most liquid trade in the world. Trades worth of trillions of dollars are traded daily. There are always traders on the look out to trade currencies in the market.
- Free to Trade:- You can trade forex at no fees at all or at a reduced fee if you choose to use forex trade brokers (recommended). Many forex exchange brokers will provide you with a free demo account which you can use to familiarize yourself with the ins and outs of the forex trade. Follow this link to open a free demo account if you would like to start practicing forex trade now.
- Very Low Startup Capital:- You can start trading forex in Kenya with as little as $50 in your online account. That is less than 4K! This is possible through macro and micro forex trade accounts that are offered by some forex brokers.
How To Get Started With Forex Trading in Kenya
Before you read the rest of the article, I recommend that you have a look at the resources in the widget table below. They have been monumental in building my knowledge about forex trading in Kenya. Some of them are free while others are available in Amazon.Com for less that 500/=.
Additionally, investors who are early adopters are teaching people how to go start trading forex in Kenya. There are particular Kenyan Facebook groups, pages and blogs that have dedicated themselves to the subject of online forex trade in Kenya.
If you are one of the action takers in Kenya, you could be soon on the path to eradicating the financial instabilities posed by insufficient salaries, unemployment, aborted business ideas and unmet dreams by letting your money work on your behalf, which is what forex trade does.
In Kenya, there is actually no law prohibiting private online Forex trade. This is probably one of the reasons why it’s becoming one of the most lucrative businesses in Kenya today. Anyone who is interested with trading forex in Kenya can do so with the assuarance that there are no illegalities involved in trading forex in the country.
Now that most Kenyans are curious to learn more about forex trading, it should be the high time for you to go the same route.
If you are not sure where to begin, the next section of this article will give you the basics that you need to master in order to start trading forex in Kenya.
Step I: Open an Online Forex Trade Brokerage Account
If you want to trade forex in Kenya, you will have to do so through a broker. This is basically a firm that handles the trades for you. You make your orders through them just like you do when trading stocks and securities at the NSE.
It is important that you research on different brokerages to find one that works best for you and is reliable. Doing your due diligence before you invest your money in forex trade also steers you away from the path of cons, scams and fraudster. I personally recommend XM Forex Brokers.
How to Choose Forex Trade Brokers
Give these factors a consideration when selecting your forex brokerage firm:
- Look for forex brokers who have been in this industry for many years, say, over 10 and have a good pack of experience. Experience simply indicates that whichever the company you have approached, it fully understands its job and treats its clients well.
- Check to confirm that the forex brokerage firm is regulated and its reputation is way up there. There are oversight bodies that are in charge of this. If the broker you selected voluntarily submits oversights to their government, you can have the confidence and assurance about its transparency and honesty.
- See the number of products offered by the forex broker. In case the broker trades securities as well as commodities, for example, you know that the broker in question has a larger client base plus good business reach.
- Read the forex broker’s reviews but make sure you are careful while doing this. In some cases, unscrupulous brokers may go into the sites and publish reviews boosting their standing and reputation. Reviews only give you a taste of the broker not what the broker really is. It’s a grain of salt.
- Visit the brokerage website. The broker’s website must appear very professional, with active links. If you find anything like “Coming Soon!” or simply unprofessional looks, then you have no deal with that broker.
- Check the costs incurred in transacting. Remember to find out how much you will be charged by your bank to wire money over to your forex account. Optionally, consider trading with a forex brokerage firm that allows you to fund your forex account using Paypal and other convenient online money transfer methods widely used in Kenya.
- Focus carefully on the essentials. You require outstanding customer support, transparency and easy transactions. Gravitate towards brokerage firms that have a nice reputation.
Step II Request information for opening a forex account.
You can either open a personal account or select from managed accounts. With personal accounts, one can perform his or her own trades while with managed accounts, the broker you registered with will perform trades on your behalf.
Before you start trading with the brokerage firm you have selected, it is important that you fully understand the type of accounts that they operate.
What I personally do is ensure that I have contacted customer support with any little query or doubt that I have. It is my money that I am risking and the next thing I want is to walk into any business idea or investment blindly.
Step III Fill out the necessary paperwork.
You may request for the paperwork via mail or simply by downloading it as a PDF file. Remember to check transaction costs for getting your money into your bank account from that of the brokerage account. You never know the fees may cut into your hard earned profit so first find out on that.
Activation of your forex trading account. Usually, brokers send you emails that contain links for activating your account. Just click on the link and follow the simple instructions to get going with trading.
Step IV: Starting Forex Trading in Kenya
- Do an analysis of the market. There are several different methods you can try:
- Technical analysis: This involves the process of reviewing historical data or charts to help you in predicting the shifts in currency with past events as the touchstone. You can make use of a trusted platform such as Metatrader 4 or just charts depending on your preference but the two will actually do the work.
- Fundamental analysis: it involves analyzing a country’s economic base and deciding based on this factor.
- Sentiment analysis: This type of analysis is in one way subjective. Ideally, you try analyzing the market mood in bid to figure out whether it’s “bullish” or “bearish.” While you may not on a regular basis put your fingers on the market sentiment, you may often guess well hence influence your own trades.
- Determination of your margin. You can proceed with investing little bits of money whilst making great profit advances. However, this largely depends on your broker’s laid down policies.
- For instance, if you need to trade10, 000 units at a 1% margin, the broker will ask you to deposit $100 cash in your forex account as security.
- Any gains or losses increase or reduce the amount in the account. It is therefore for this reason that you are advised, as a general rule, to only invest 2% of your total ash in any particular currency pair even if it’s very profitable then.
Step V: Place Forex Orders Through Your Forex Broker
There are three different types of forex trade orders that you need to familiarize yourself with.
- Market orders: With this one, you will instruct the broker to perform the transactions based on the current rate in the market.
- Limit orders: The orders instruct the broker to perform a trade only at specific prices. For example, you may buy currency only when it reaches certain price(s) or simply sell currency in case it lowers to a specific price.
- Stop orders: Stop orders are choices to purchase currency only when it’s above the current price in the market. This is usually done in anticipation of an increase in value or selling the currency anything below market price to lower losses.
Never at all get emotional. This is a volatile market and along your paths ups and downs will knock and wave. The only thing that matters here is doing your research very well; holding on to your strategy and watching your profits rise.
Do you have any questions regarding trading forex in Kenya? Always feel free to ask. We have an expert in the house waiting to tackle them all.