Forex Trading is an excellent way to grow wealth in Kenya. But how do you actually start? How do you succeed? Follow the steps below to learn everything you need to know about Forex trading in Kenya.
Forex trading is the simultaneous buying or selling one currency in exchange for another, in an attempt to extract a profit from the price movements or interest rate differential. All currency trades involve two currencies, and trades are facilitated by a forex broker. Currency markets are open 24-hours a day during the week, which is an advantage over the stock market which is only open for a portion of each weekday.
The forex industry is not heavily regulated and provides high leverage. This makes it an attractive option for new traders starting out with limited capital (leverage increases the "buying power" of the trader's capital). That said, there are also risks that forex traders need to be aware of, as well as some basic information they should know before starting.
There are 3 ways to approach forex trading in Kenya. Choose the option below that best represents your situation:
Once you have a preference in mind, you’re ready to shop for an account.
This guide provides an overview of these crucial basics, including detailed pieces of information on how to get started with forex trading in Kenya and how to become a successful money manager or introducing broker.
Step 1: Choose a broker
As with evaluating any vendor, to find a suitable forex broker in Kenya — whether you’re a new investor or a seasoned active trader - do your homework. To maintain maximum objectivity, we will neither recommend brokers nor speciﬁc reviews or websites that provide them. To speed your search, however, we offer the following guidance.
When you’re a beginner investor, the right brokerage account can be so much more than simply a platform for placing trades. It can help you build a solid investing foundation — functioning as a teacher, advisor, and investment analyst — and serve as a lifelong portfolio co-pilot as your skills and strategy mature.
You’re going to need an online broker, and that broker should offer a reasonable investment minimum, high-quality trading tools, robust access to customer service and no hidden account fees.
For example, for active forex traders in Kenya, we note providers offering volume discounts on trade commissions and robust mobile trading platforms. For people venturing into investing for the first time, we call out brokers that provide educational support and on-call chat or phone support.
While there are many forums you can ﬁnd online, anyone can post anything to many of these, making them great spots for any loser seeking to vent frustration at a broker. Unhappy customers are more likely to post than satisﬁed ones.
When visiting these sites, look for evidence credibility. Does the site reveal weaknesses as well as strengths, or do the reviews sound like they were written by the broker’s marketing writers? Also, take note if the same brokers that get to previews are running advertisements or have links on the site to open an account, which creates potential conﬂicts of interest. Check other sites and forums and try to pick up the overall level of satisfaction. Sites dedicated to industry news and can also be a source of who’s doing well and who’s in trouble.
Step 2: Open an Account
The requirements for opening a Forex trading account in Kenya have become simpler since the growth of online Forex trading. Today, opening a Forex account is almost as simple as opening a bank account.
Many brokers allow you to open an account quickly online. You'll need to fill out a brief questionnaire about your financial knowledge and trading intentions. You'll also need to provide an ID, and the minimum deposit your Forex account institution requires. You can fund the forex trading account by transferring money from your bank account or online with a CC, a process that takes from a few minutes to a few days. That's it. You're now free to trade.
There are several types of forex accounts. Which is right for you will depend on your investing goals, what kind of investments you plan and how much help you’d like in choosing and managing those investments.
The classification of Forex account types can be based on the following criteria:
An online forex trading account likely offers your quickest and least expensive path to trading forex in Kenya and a variety of other investments like stocks, ETFs, commodities or cryptocurrencies. With a broker, yoU can open a retail or professional forex account - here are the conditions and differences - or you can open an institutional account if you’re a high-volume trader.
Money-managing service offers the benefits of forex trading in Kenya but doesn’t require its owner to do the legwork required to pick trades. The appeal of this approach is obvious for those who want forex exposure and lack the time, will, or ability to do it themselves. As with anything else that requires skill and experience, most people will get much better results by hiring a professional.
Income investors without the time or expertise should approach forex in Kenya by using a proven trader via a managed forex PAMM account or social trading MAM account.
This may sound expensive, but the management fees here are generally a small fraction of the generated profits.
Become a succesfull forex trader and money manager with AM BrokerOpen Account
Step 3: Decide how much money you invest in forex
Forex trading in Kenya has among the lowest entry or startup costs in money and time of any ﬁnancial market, in terms of trading capital and training/equipment costs, as follows:
Unlike most markets, you do not need many thousands of dollars to get started. That’s because in forex, we can trade with leverage (borrowed funds), typically 100:1 or more. This allows us to make substantial proﬁts on small price movements. However, as noted above, that also means:
Much of this course is about how to minimize the risk of large losses while maximizing the odds of proﬁting. It involves learning to cut losing trades short and let winners run so you can be proﬁtable even when wrong on most of your trades.
In theory, you can often start with as little as $100. However, you’ll learn that you’ll lower your risks and have more chances to proﬁt by starting with $1.000 minimum amount (or the equivalent) if possible. The small position sizes available from mini and micro-accounts allow those with limited funds to trade smaller positions, which keeps the percentage of capital risked per trade acceptably low.
Step 4: Install the platform
The very first step when making your first forex trade is opening the trading platform. A trading platform is a software that enables fx traders to place trades and monitor accounts through financial intermediaries.
The platform should offer advanced financial trading functions, as well as superior tools for technical and fundamental analysis. It should also trade forex automatically by using trading robots and trading signals. In addition to the desktop and mobile versions, the platform should be available on the web to be accessed from any device.
Oftentimes, trading platforms will come bundled with other features, such as real-time quotes, charting tools, news feeds, and even premium research. Platforms may also be specifically tailored to specific markets, such as stocks, currencies, options, or futures markets.
Successful forex traders in Kenya have chosen the MetaTrader 5 multi-asset platform for trading Forex, exchange instruments, and futures. MT5 is an award-winning trading platform that puts you in charge, whether you are a long-term investor or actively trading global markets. The platform offers advanced financial trading functions, as well as superior tools for market analysis.
MT5 can also trade automatically by using forex robots. If you are tired of trading manual forex strategies without success, the ultimate Expert Advisor Builder can improve your trading and spend less time in front of the screen. With such a powerful tool used by hedge funds and institutional traders, you can build your own strategy without any programming skills and without writing codes. You will see real results right away and with one click you can export the strategy as Expert Advisor and trade with MetaTrader 5.
>> Download MetaTrader 5 (also watch MT5 tutorial bellow)
Step 5. Make the first trade
Once you have chosen your platform, you can start forex trading in Kenya. Just open the deal ticket for your chosen market, and you’ll see both a buy and a sell price listed. You’ll also be able to decide the size of your position and add any stops or limits that will close your trade once it hits a certain level. Hit buy to open a long position or sell to open a short position.
You can monitor the profit/loss of your position in the ‘open positions’ section of the dealing platform.
Once you’ve decided it’s time to close your position, just make the opposite trade to when you opened it. Now, let’s take a look at one example of forex trade and the possible outcome.
EUR/USD has a sell price of 1.35540 and a buy price of 1.35550. You think the euro will lose value against the US dollar because the ECB (European Central Bank) might cut interest rates, so you decide to sell 5 standard lots at 1.35540.
Each contract is equal to 100,000 of the base currency of the pair. In this case, selling a single EUR/USD standard contract is equivalent to trading €100,000 for $135,540 so your total position is worth $677,700 (€500,000).
CFDs are a leveraged product, so you don’t have to put down the full value of your position upfront. A deal of this size on EUR/USD has a margin requirement of 0.20%, so your margin would be 0.50% of the total exposure of your trade, which is $1,35540 (€1,000).
The euro falls as you predicted. You decide to close your position when the buy price reaches 1.35440.
To calculate your profit, you multiply the difference between the closing price and the opening price of your position by its size. 1.35540 – 1.35440 = 10 points, which you multiply by five lots to get a profit of $500.00 (minus any overnight charges). Another way to think about it is that your $677,700.00 is now worth €500,369.17 ($677,700/1.35440), so your profit is €369.17 (€500,369.17 – €500,000.00).
Calculating profit from your trade:
1.35540 – 1.35440 = 10 points, which you multiply by five lots to get a profit of $500.00.
Just remember that you only need to pay overnight funding charges if your position is held overnight.
Since the mid-‘90s, the term has become a lot more popular in the spot Forex market because of the rapid growth that foreign exchange (or “FX”) has experienced. Since that time, many individuals and organizations have tried their luck at the IB business — and crashed and burned in the process. Many thought that because Forex was the “sexy” market to be in, their success was guaranteed. It’s really not that simple. Becoming a Forex Introducing Broker is easy, but running a successful IB business takes prudent planning and good execution. It’s very important that you follow the recommendations laid out in this Forex IB Manual guide — that is if your goal is to experience ongoing and long term success.
The idea behind it is that you promote forex trading in Kenya, earning a commission - up to $2.000 CPA or up to 50% Revenue Share - if people actually end up opening an account thanks to your efforts.
As stated in standarmedia.co.uk, AM Broker is recruiting introducing brokers and local representatives, who would operate online or through their own office. Franchising is also possible.
Watch how you can start forex trading in Kenya within a few minutes (click here to sign up).