Learn Forex Trading – FX Guide

1.
4.8 stars from 552 ratings

Broker Verified

With Blackstone futures, you'll pay low fees and trade under good conditions. So is this broker a good choice for Kenyan traders?
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
2.
4.7 stars from 389 ratings

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Markets.com is among the best forex brokers that offer PayPal deposits in Kenya. The Markets.com review discusses the broker in detail.
CFD service. Your capital is at risk.
69% of retail investor accounts lose money when trading CFDs with this provider.
3.
4.6 stars from 156 ratings

Broker Verified

Exness is among the best forex brokers that offer M-Pesa deposits in Kenya. We've provided a review to check how good this forex broker is.
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.

To become familiar with the forex market and learn Forex trading successfully, they may need to do some study, but getting started in forex trading is fairly easy. The only thing a trader needs to begin trading is capital, a brokerage account, computing power, and an internet connection.

In 2017, Kenya increased its regulation of local forex businesses, which made the market safer for retail traders. This is good news for residents of Kenya interested in trading on the forex market. However, for forex trading in Kenya, you will need a viable trading strategy backed by a sound trading plan that should include money management and a reputable broker to handle your trades. If you’re interested in learning how to trade in Forex, keep reading to learn how that can be accomplished.

Get started with Forex in Kenya

Kenya’s business potential and demographics have led online forex brokers to establish branches in Lagos and other Kenyan cities as a result of the attractive business environment in the country. As a result, it is relatively easy to trade Forex in Kenya, even if you are a new trader. Below are six steps you can follow.

  1. Use relatively modern, internet-connected devices, such as a smartphone, tablet, or computer.
  2. Search for an online forex broker accepting Kenyan clients.
  3. Forex trading on margin can be done by opening an account with the broker.
  4. Deposit funds by using one of the payment methods accepted by the broker.
  5. Obtain a trading platform that is compatible with the broker or download one he offers.
  6. You can start trading!

You should learn about trading currencies

FOREX TRADING inscription coming out from an open book, creative business concept

Broker
Rating
Regulated
Bonus
Min. Deposit
Max. Leverage
1.
Blackstone Futures Broker Review
4.8 stars from 552 ratings

Broker Verified

FSCA

up to 30%

USD 100

1:400

Review Visit Site Visit Site
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
2.
Markets.com Broker Review
4.7 stars from 389 ratings

Broker Verified

FCA, ASIC, CySEC, FSCA, BVIFSC

up to 50%

USD 100

1:300

Review Visit Site Visit Site
CFD service. Your capital is at risk.
69% of retail investor accounts lose money when trading CFDs with this provider.
3.
Exness Broker Review
4.6 stars from 156 ratings

Broker Verified

SFSA, FSC (BVI), CBCS, FSCA, FSC (Mauritius)

up to 10%

USD 10

1:2000

Review Visit Site Visit Site
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
4.
CM Trading Broker Review
4.6 stars from 156 ratings

Broker Verified

FSCA

up to 100%

USD 250

1:300

Review Visit Site Visit Site
CFD service. Your capital is at risk.
Remember that CFDs are a leveraged product and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.

You’ll also have to learn what you’re trading if you want to get started. Traders who are new to the market tend to trade anything that seems to be moving. As a result, they can use high leverage and trade in both directions at random and lose money.

Your success can be greatly affected by knowing the currencies you buy and sell. A currency may bounce back after a large decline, for example. The new traders may then try to take advantage of this.

There may have been bad employment reports in its country for many months, causing the currency to fall. Is that something you’d buy? Not likely. An example of the importance of knowing and understanding what you buy and sell is this.

There are many different currency pairs to trade when you trade currencies, and you can use leverage.

However, this does not mean that you must trade them all.

With a little experience under your belt, it’s OK to increase your trading capital after you’ve traded for a while with a small live account.

Getting good at trading comes down to eliminating bad habits, understanding the market and your trading strategies, as well as managing your emotions. Those are the keys to success in trading forex.

Example

The Kenyan shilling (KES) is the currency that Kenyans use and is called KSH. There are 100 cents in each Kenyan shilling. Bank Kenya (CBK) is responsible for issuing and managing Kenyan currency.

Recently, 106.50 Kenyan shillings were exchanged for 1 US Dollar.

According to your market analysis, you might be able to buy 100,000 dollars now at a 106.50 exchange rate against the Kenyan shilling if the USD/KES exchange rate increases.

The following calculation will determine your profits if USD/KES rises to 107.50:

100,000 USD x (107.50-106.50 KES/USD) = 100,000 KES

This amount of Kenyan shilling profit should then be converted into dollars by calculating:

100,000 CAD /107.50 KES/USD = 930.23 USD

If the USD/KES exchange rate drops to 105.50. Instead, your trading loss would be:

100,000 USD x (105.50 – 106.50 KES/USD) = -100,000 KES

The loss incurred in KES, when converted into US dollars at the current USD/KES exchange rate of 105.50, would be as follows:

-100,000 KES/105.50 KES/USD = 947.87 USD

Kenya forex trading strategies

Once you complete each step outlined above, you will have a funded online brokerage account that allows you to trade Forex from Kenya. Optimum results can then be achieved by developing a trading plan that consists of a profitable trading strategy.

Below you will find several strategies which have proved successful for some lucky retail forex traders, depending on your experience and expertise in the market. Strategies listed can be used from anywhere globally, whether the trader is in Kenya or not.

News trading

If you enjoy hearing about economic and geopolitical developments, you might enjoy news trading. Following a key economic news release or another important news announcement, traders take advantage of sharp movements in major currency pairs.

Scalping

This type of trading involves taking advantage of very short-term market fluctuations. The goal of a scalper is to capture a few pips of a profit at a time by entering and exiting the market quickly.

Day Trading

Trading strategies involving day trades typically restrict transactions to one session. While day traders buy and sell during the trading session, they close out all positions at the end of the day because taking overnight positions incurs additional risk.

Swing trading

In this strategy, entry and exit points are based on indicators that measure market momentum. It is swing traders’ primary goal to buy low and sell high when they go long or sell high and buy low when they go short. In addition, swing traders can take overnight positions because they have no time constraints.

 Trend trading

Trend traders follow the direction of the currency pair’s movements over the long term. To execute this strategy, one must identify trends and then establish currency positions following them until they are fulfilled.

Making Money with Forex in Kenya

For Kenyans to make money in the forex market (or anywhere else in the world for that matter), they must develop a solid trading plan that includes a profitable trading strategy. You can easily copy successful traders’ trades via social trading platforms without developing a trading plan for new traders.

Developing your trading strategy will largely depend on the strategy’s success and how disciplined you are to follow the strategy within the overall scope of your trading plan. Whether you prefer to position yourself for long-term gains or scalp the market intraday, you can incorporate any successful strategy into your trading plan.

Generally, good trading strategies incorporate objective criteria, some form of risk/reward analysis, and a sound money management principle into an approach you can realistically and systematically apply. However, it is important to remember that many strategies may initially work well but yield little or no value as market conditions change.

 How long does it take to make money on Forex?

There is no answer, and you’re going to hate it. How well you learn will determine the outcome. Learning the basics takes up to two months on average. Is this sufficient for trading?

Of course, but not on a real account where the possibility of losing money is high due to lack of expertise. During the initial stages of your trading career, a demo account will prove to be your best friend. That’s where you will find all the trading platform’s features and see the market for yourself.

Furthermore, the length of your practical learning on the demo account depends on the pace of your knowledge acquisition. To open a standard account, you need to see that the implementation strategy pays off for some time.

It’s important to keep in mind: your successful trades are not those that resulted from an unexpected combination of circumstances but those in which you exercised some control of the market.

Understanding trading from a technical and a fundamental perspective isn’t enough. As much as the emotional part influences our decisions, we need time to become psychologically ready to step forward.

To acquire trading expertise, one must spend many years on the job. Traders have reported that 6 years is enough to gain confidence, whereas, for others, 2-3 years is sufficient to play for high stakes. Managing to trade profitably is considered to be a more challenging part than learning how to do it. It is here when practice becomes critical.

Legal environment tightens for forex trading in Kenya

Traders can trade foreign exchange in Kenya, and the country has its own regulatory body over brokers based in Kenya and conduct business from there.

Kenyan traders can access the services of a variety of brokers around the world with the necessary regulations and authorisation. Recently, these brokers have been growing due to competition and obtaining the necessary licenses to offer to trade.

Traders from Kenya have had more opportunities to participate in the forex market. Kenyan traders have also become more prevalent because brokers offer live trading accounts starting at $1.

More Kenyans will benefit from forex trading because they can trade with small amounts of capital.

Best online forex brokers in Kenya

Kenya’s main financial regulator, the Capital Markets Authority of Kenya (CMA), oversees the country’s financial sector.

According to the Capital Market Act, the agency was founded in 1989 to improve Kenyan investors’ access to capital markets. Kenyan brokers who provide access to the forex market must be registered with the CMA and regulated.

Forex terminology

Before you start trading Forex, you’ll probably want to learn the unique terminology forex traders use. Here are some terms to know:

Base currency

The initial currency in a pair. First, the price is displayed, and then the price for the second currency is converted for comparison.

Arbitrage

Trading simultaneously in different markets to capitalise on minor price differences.

Future

A contract that dictates the price at which a buyer will purchase an asset in the future. In the future, buyers can cash out early and pocket the difference in price between their current asset and the contracted price.

Going long

Investing in assets with the expectation that they will increase in value.

Going short

Selling an asset before its value drops, expecting a lower value in the future.

Margin calls

When your trading positions require more margin than the money in your account, your broker can request you deposit additional funds. Having this situation may result in your trading position being liquidated automatically.

Lot size

100,000 base currency units are the standard lot size for forex trading.  The online brokers support smaller sizes, including a mini lot representing 10,000 units of the base currency and a micro lot representing 1,000 units.

Ordinance

These are instructions to your forex broker so that they can execute your positions. You can also place market orders, stop-loss orders, take profit orders, and limit orders in the forex market.

Pip

A pip is an acronym for “percentage point.” A pip represents the smallest possible movement for a particular currency pair.

Is trading forex in Kenya right for you?

Decision making concept

Trading forex requires knowledge about a specific market, a viable strategy, and the discipline to follow your overall plan unless you use a social trading platform. You are more likely to become a successful forex trader if you meet all of those requirements.

If you plan to start trading Forex from Kenya, you must use a trustworthy and well-regulated broker. To open a trading account, choose a broker on your list that takes Kenyan clients.

To determine what trading strategy to pursue, it is helpful to analyse how much time should be invested behind the monitor, the risk-reward ratio, and the frequency of opportunities. Each trader will appeal to a different trading strategy based upon their particular qualities. To take the first step in the right direction, traders need to match trading personalities with the right strategy.

Bottom line

Learn as much as you can when trading on the forex market, which is the most important aspect. It would be best if you had discipline, patience, and vision to succeed. Once you’ve mastered the fundamentals, open a standard account that requires just a $1 deposit to begin trading.

Day trading and swing trading in small amounts are easier for traders with limited funds than in other markets in the forex market. However, if you have an applicable strategy and additional funds, you may profit by trading or long-term fundamental analysis. Forex traders who focus on understanding macroeconomic fundamentals can become more profitable by using technical analysis and understanding.

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