Forex trading in Kenya is steadily growing but not many people are aware of it. It is one of the many money making avenues available in the country. This is a viable way to invest money, especially for people who don’t want the hustle that comes with running a business or being employed. In fact, you become your own boss. Before getting into this trade, you need to be aware of the benefits and all the risks involved. While this is the fastest way to make money, it is also the fastest way to lose it.
What is Forex Trading
Every time you visit another country, you need to get that Country’s currency. Your currency may not work in another country. This exchange is what is referred to as foreign exchange, forex in short. Forex trading is the buying and selling of currencies with an aim of making a profit. The foreign exchange market is the largest financial market in the world. An average of USD200 billion is traded every hour and over USD5 trillion every day and it is open 24 hours a day, 5 days a week.
How do you make money?
For example if you decide to sell dollars against the Shillings.
Assuming that today 1 dollar equals 100 Kenyan shillings and next week or tomorrow the same dollar is equal to 110 Kenyan shillings. If you had bought a dollar today at 100 shillings you can sell it next time at 110 shillings making a profit of 10/=.
If you had bought $1,000 then you make a profit of 10,000. So basically forex trading is the buying and selling of currencies. You can sell the currency when value goes up or if you feel value is likely to go down. When the value goes down, you may end up loosing money. This is why it’s important to be wise. The higher the amount you invest, the higher the profit or loss and vice versa.
Forex Trading in Kenya
Unlike in other countries like Japan, USA and Britain, forex training in Kenya is neither familiar to many people not properly regulated. This is why it is very important to do research before venturing into it.
Both online and offline research is very important. For online research you can use the internet which is a wealth of information. For offline research, contact people who have done it successfully. There are those who may not help you and others would gladly help you. Contact as many as you can and take into consideration every given detail.
Things you’ll need to start trading
It is an investment you are making so money is definitely key. You may need to start off with at least 10, 000 Kenyan Shillings to make money.
There are many brokers out there, some are regulated and others not. For a long time, many Kenyans used offshore brokers because there were no trusted brokers in Kenya. In 2016, the Capital Markets Authority (CMA) developed a framework to regulate forex trading. The online Forex Exchange Trading regulations became effective in 2017 paving way for players such as EGM securities to start offering services to Kenyans.
EGM securities offers access to the global markets with local support. It is a trusted forex trading broker licensed by CMA that offers:
An exclusive client portal and advanced Research tools
A state of the art trading platform with free tutorials
24 hours a day 5 days a week multi-lingual support and a personal account manager
An education academy and access to expert webinars
Coverage from their offices in Kenya and across MENA region, UK and USA
There are many other CMA licensed brokers such as : IG, saxo bank, swissquote, city index, Forex.com, easyMarkets, pepperstone, XTB and XM group.
Conduct an in depth research on the brokers before investing the money.
Importance of using a CMA licensed brokers
Recourse in case if dispute. If a client is dissatisfied then, he/she can file a report with CMA.
Market conduct and transparency. Dealing with unregulated brokers may expose one to illegal activities. CMA brokers on the other hand can always assure one of transparency in their dealings.
Ease of accessibility. All licensed brokers are required to have a physical office in Kenya enabling clients to visit if they have issues
Your funds are protected since the rule requires all the clents’ money to be stored in their account.
Types of accounts and money needed for each
Official account – this is for people who are willing to invest a lot of money, like, 10,000 US dollars.
Mini account – this is for people willing to invest enough money but not that much, for example, 1,000 US dollars
Micro account – this is for those with little money or people who don’t want to spend too much money on forex, you can invest as little as 100 US dollars an equivalent of 10, 000 Kenyan Shillings.
While forex trading may make one a millionaire, it requires patience. Don’t get into the market with the aim of making money very fast as you may end up poorer than you started. It is also important to invest with only what you can afford to lose, don’t put all your money in at once. Invest 1% of the money in your account at a time.