Forex trading in Kenya has in the last ten years taken off as a result of penetration pf internet. Unlike the years gone by, almost every Kenyan has access to the internet.
Additionally, the options and trading applications and platforms, now on offer from the abundance of web sites promoting their services – quite literally spoils one for choice.
But what is Forex trading?
Forex trading in its simplest form is trading one currency against another currency. Traders profit from the fluctuations in the value of the different currencies.
The internet forex trading of today can be traced back to the time when man first started trading one or several items in exchange for others. This was and is known as bartering and that’s how things continued until the introduction of money.
The origins of the word money stem from the Latin word, “moneta,” which in turn comes from the Greek temple of “Hera the Moneta.” And this is where money first came from, in the early days of Rome.
Money, in itself, must be a scarce good and many items have been used as money, from naturally scarce metals and minerals, to conch shells and cigarettes, to artificial banknotes; i.e. paper money.
Money is, in its crudest form, a token – an abstraction and perhaps the most popular of that is the form of paper money, in the design of banknotes, which is the most common sign of physical money. Gold and silver retain, however, many of the essential properties of money. An example of cigarettes, being used as “money,” may be found in many prisons, where the usual forms of coins and notes are prohibited, from being held by their inmates.
Bartering, however, has several problems, most notably timing constraints. If you wish to trade fruit for wheat, you can only do this when the fruit and wheat are both available at the same time and place. That may be a very brief time, or it may be never. With an intermediate commodity (whether it be shells, rum, gold, etc.) you can sell your fruit when it is ripe and take the intermediate commodity. You can then use the intermediate commodity to buy wheat when the wheat harvest comes in. Thus the use of money makes all commodities become more liquid.
Forex trading is where (as already mentioned), one currency is bought and sold against the fluctuation rate of that of another, on the international currency exchange market, with the idea of selling one currency against the other for profit. Money has always been traded, through the centuries. However, this was, until the advent of the Internet; usually the exclusive domain of the rich and that of their brokers. Before the Internet, anyone wishing to make a currency exchange, went through an agent, known as a broker, who bought and sold, at what he thought were the best rates of exchange. For this, they extracted a fee, unusually via of a percentage of the total sum of the deal.
The forex trading market I always in a continuous state of flux due to the continuous rates of variability on the foreign markets and this as a direct result of supply and demand and, amongst other things, domestic stocks, and international trade patterns, tendencies, and movements.
Today, with the richness and abundance of the Internet, anyone can become their own forex trader, from the comfort of their own home, start trading and stand a good possibility of making money, after a little trail and experience.
Forex trading, on the Internet really started to take off, in the mid-nineties and at that time there were only a handful of web sites, with (in comparison to today’s usage) a handful of people. These people started trading from home, during the day, and rapidly became known as Day Traders and all of this really got started in the US. For many forex trading even became a way of life, with many giving up their regular jobs, and making money for themselves, in real time and at home.
With the advent of broadband, with good and secure high speed connections becoming a forex trader is not difficult and simply requires a degree of understanding of how the markets work, spotting what the tendencies are and making a trade on what you think is going on in the forex market. Forex trading is no longer the exclusive domain of the rich and their brokers – rather it there to be used by one and all, with a degree of intellect, and an aptitude for spotting market trends, and making a trade on what he or she thinks will happen to that currency next.