What is a Forex Trading Live Account? – FX Guide

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Everyone in Kenya, having a small amount of money and the desire to achieve maximum results, can participate in forex trading. However, the first hurdle they face to start trading is opening a forex live account.

Individual traders can begin trading currency via retail forex brokerages since the emergence of the internet in the 1990s, allowing anyone with an internet connection and a small amount of starting capital to start trading currency.

For forex trading, the procedures to open an account are similar to opening a bank account or other types of brokerage account. However, before you begin trading foreign exchange, it’s a good idea to familiarise yourself with some information that can help you ensure that your trade is safe, positive, and successful.

What is a forex trading live account?

This is essential for everyone who wants to start up and make their first trade. The good news is that anyone with a modest amount of cash in the pockets can begin a forex live account. A live account does come with some parameters, though. Even though many companies provide live accounts, they are frequently different in what they offer. What parameters? Yes, parameters. They include:

  • Balance: The number of funds or currency the trader can or must deposit into their trading account to start trading. Having more funds increases your earning potential. But, on the other hand, you can lose more when you have more funds.
  • Forex lot Sizes: The size of a lot is the number of units of the base currency that are contained in the account. Adding 10,000 to the lot size means it has the equivalent amount of the trade’s base currency of 10,000. A lot of structure or type can be divided into three categories: Standard, Mini, and Micro lots that contain 100,000, 10,000, and 1000 units of a base currency, respectively.
  • Forex pairs: As the name suggests, Forex pairs are pairs of currency quotes that the forex trading live account works with. To clarify, currency quotes are pairings of different currencies with a value coefficient attached to them, like EUR/USD = 1.56. The number of currency pairs that an account deals in is usually determined by the size of the account.
  • Risk Feature: These are generally available to small accounts or to those just starting out. An account with a ‘Guaranteed Limited Risk’ feature is designed to prevent investors from losing more than the initial investment.

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A forex broker is required to trade currencies in the forex market. In over-the-counter markets, retail currency trading has evolved into a decentralised and lightly regulated activity. To avoid scams, prospective currency traders should thoroughly research the reputation of brokers before opening accounts.

By verifying the broker’s history with local, national regulatory agencies, you can determine whether there is any history of unfair or irregular practices. Technically, all forex brokers provide access to the forex market, but they are not all alike. To make the financial commitment to fund an account, it’s important to ensure the broker is regulated, licensed, and has good standing in the law.

Before opening an account with a broker, you might want to research the services they provide. While some brokerages may offer basic, plain-vanilla services, other firms may have some sophisticated platforms with analytical tools you can use to make informed trading decisions.

The best way to get the most value out of your money is by working with a totally dedicated broker to provide you with the highest quality products and services.

In addition to comparing commissions and other fees brokers charge, traders will also want to compare how brokers charge for their services.

The forex brokerage industry typically charges for traders through a bid-ask spread, which is a difference in percentage between the current buying and selling price of a currency.

Some brokerages may charge different types of commissions for their services, though. Therefore, if you want to evaluate the overall profitability of your trading, you should take into account these extra costs.

What Information Do You Need To Open An Account?

Technology has developed in such a way that opening a forex trading account is a relatively simple process. The applications are submitted through a secure online application and are processed promptly. The approval or denial of a retail trading account may occur instantly in certain situations.

Several pieces of information are needed to open an account. These data mostly fall under personal information, which includes your country of origin, name, contact information, and tax ID number. Similarly, Kenyan residents may need to provide their Utility bills and bank statements if they want to open a forex account.

Since forex trading is conducted on margin, the trader and broker are both at risk of loss. Therefore, forex brokers generally inquire about your financial circumstances to ensure that you have the funds to cover any unexpected losses. Last but not least, the application will ask if you are a financial professional and how much experience you have in forex trading.

Procedure For Opening An Account

Forex traders do not need any complicated equipment to open an account, but a few things will help them get going.

Generally speaking, you’ll have to provide information about how much experience and knowledge you have, along with your trading intentions in an application. Along with that, you will have to provide identification and funds to your account.

To open an account, brokerages may follow somewhat different procedures, but typically, the following steps are involved:

  • Review the account types available on the broker’s website. For example, small accounts with low minimums can be tailored for beginning traders, while accounts with sophisticated features can be tailored for experienced traders.
  • Apply by completing an application form.
  • Your account will be created once you have completed the application and received a username and password.
  • Log in to the broker’s client portal.
  • To deposit money into your account, arrange for your bank to send funds to you. Depending on your bank, you may do this via check, credit card, or electronic transfer from your account. However, it is important to note that using a credit card for this purpose could result in interest charges.
  • When your account has been funded, you will now be able to trade Forex. Before making your first trade, you should review any recommendations or information that your broker provides about using the trading platform. In addition, some brokerage firms may offer trading through demo accounts so that traders can practice before putting money on the line.

Live forex trading account types

With a recent computer and an Internet connection, anyone with a recent computer can now trade Forex. The forex market was once the domain of large banks, multinational corporations, and hedge fund managers. However, individual traders, the largest capital market globally, have now gained access to the forex market through this development.

In addition, those interested in trading forex online will often find a myriad of online forex brokers that offer live forex trading accounts. However, to start trading Forex online in Kenya, you will need a small sum of money to access a live trading account.

A good broker in Kenya can save you considerable money and frustration over time if you choose a good one to manage your online forex trading account. The broker should be able to open the type of account that is applicable for your needs, as well as grant you the option to deposit and withdraw funds from your account as you wish.

The following sections contain a list of some of the more common types of live forex trading accounts currently offered by online forex brokers.

Live trading account basics

The majority of Kenyan forex brokers also offer a range of funded account types that can be used to trade Forex in a live environment, in addition to demo accounts for the practice. In general, such accounts are suited to traders with varying levels of sophistication and with varying funding capacities.

Live accounts are usually selected based on the number of funds that are available for a deposit. In addition, traders might decide which live account to use for their live trading based on the quality of pricing, the minimum transaction amount, the lot size, and the leverage ratio offered per trade.

Mini live accounts

With most forex online brokers, prospective clients can typically open a basic account type with short deposits, ranging from $25 to $500.

Many of these micro or mini accounts come with educational tools to train with and access to the broker’s trading platform and basic technical analysis tools. In addition, they can be a great way to try out a new forex broker in Kenya.

The margin requirements of these mini accounts are also usually low, and the minimum account size is often small. As a result, traders who want to learn the ropes of Forex but don’t want to take on too much risk can benefit from them.

Standard live accounts

According to the broker and the initial deposit, live forex trading accounts usually offer a wider range of features.

A standard live account typically also has a larger initial deposit between $500 and $10,000, a smaller minimum trading size, and tighter spreads.

A standard live account tends to offer more services that are more sophisticated than basic ones. The live standard account features of a broker can include, alongside the trading platform:

  • SMS alerts for mobile devices
  • Market information can be obtained directly from dealers.
  • Software for high-end trading analysis.
  • Services that alert traders to trading signals.
  • News wires like Reuters are available.
  • Commentary on the market provided on a proprietary basis.
  • Automated trading support for Forex.

VIP live accounts

Forex traders in Kenya usually have the option of choosing a VIP account from many of the forex brokers they deal with. A Kenyan trading account of this nature will generally appeal to experienced Kenyan traders who desire the best service a broker can offer.

Also, depositing at least $10,000 into this type of account is generally required. This kind of client typically qualifies for tighter spreads. They can also access the firm’s dealing desk directly. Minimum transaction sizes tend to be the highest for this kind of account.

VIP accounts include customised trading reports in addition to the standard features of live accounts. Messages sent by dealers to provide customised market updates are also included, as are messages sent to a cell phone.

Choosing a live trading account type

Good knowledge of your personal trading needs is the key to choosing the right type of live forex trading account for you. When you have addressed those key requirements, you should evaluate what features each online forex broker has to offer that are beneficial to you.

A forex broker’s ability to make deposits and withdrawals is another important consideration. They should also be well regulated and well capitalised. Considering your intended forex trading purposes, you should know how well-designed, ergonomic, and reliable their trading platform is.

forex margin

To use margin or not

A trader must decide whether to use margin after opening a forex account. Margin implementation greatly increases risk. In essence, margin can be seen as a loan from the brokerage to a trader that enables them to multiply the amount of capital available to make a trade.

A Kenyan trader’s access to margin can range from 2:1 to 400:1, depending on the country they are operating from. To provide collateral for their trading activity, they will be required to deposit a certain amount of capital into their account when using margin.

Profits can be increased with margin, but risks can also be multiplied with it. The reason is that traders must cover any and all losses they incur in their trading activity, even those outside of their initial investment.

Bottom line

The forex market has become more accessible to Kenyan traders. Kenyan traders are also attracted by brokers’ offer live trading accounts for as little as $1.

Traders in Kenya can benefit from forex trading by trading with small amounts of capital, thereby increasing their earnings potential.

Forex trading accounts are similar to other types of accounts in the financial world. However, traders should carefully compare different brokerage firms’ reputations, services, and costs before committing capital and beginning trading with one.

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