Kenya has seen a surge in forex trading in recent years as more and more people have become interested in profiting from the global currency markets.
If you’re looking to start forex trading, this guide will teach you everything you need to know.
We’ll cover the basics of what is forex, how forex works, how to open a trading account, and some of the best strategies for beginners.
So whether you’re a complete novice or just looking for a refresher course, read on for all the information you need to start trading currencies today!
What is Forex?
A forex transaction is an act of changing one currency for another. The euro, for example, may be exchanged for the US dollar.
The forex market is where foreign exchange transactions take place.
The Forex market is the world’s largest and most liquid market. Billions of dollars change hands every day in this market, which is decentralized and run purely online.
This industry uses a digital network made up of banks, brokers, companies, and individual traders that operate electronically to operate.
How does it works?
When you buy or sell a currency, you are betting on that country’s economy. For example, if you think the euro will be stronger than the US dollar, you would buy euros and sell dollars.
Alternatively, if you think the US dollar will be stronger than the euro, you would sell euros and buy dollars.
If your assessment is correct and the currency moves in the desired direction, your trade will make a profit. If your prediction is incorrect and the currency moves against you, your trade will result in a loss.
Benefits of trading Forex in Kenya
The main reason people trade forex is to make money. Unlike stocks or commodities, there is no central exchange for currencies.
That means that transactions can take place 24 hours a day, seven days a week. This makes it very convenient for traders in Kenya who want to take advantage of opportunities as they arise.
Another benefit of forex trading is that you can start with a small amount of capital. You don’t need to have thousands of dollars to get started – many brokers will let you open an account with as little as $100.
This makes forex trading much more accessible than other types of investment, such as buying property or investing in shares.
How to open a forex trading account in Kenya
In order to start forex trading, you will need to open a trading account with a broker.
There are many different brokers out there, so be sure to do your research and choose one that is regulated by a reputable organization such as the Financial Conduct Authority (FCA) in the UK or the Commodity Futures Trading Commission (CFTC) in the US.
A forex account is an arrangement between an investor and a dealer that allows the investor to deposit money with the broker to trade currencies.
Once you have found a broker, you will need to fill out an application and provide them with some personal information, such as your name, address, and date of birth.
You will need to fund your account with enough money to cover your margin requirements and any losses you may incur. This can be done via bank transfer or credit/debit card. After your account is funded, you can start placing trades!
The best strategies for beginner forex traders in Kenya
If you’re just getting started in forex trading, it’s important to use a strategy that minimizes risk.
One popular strategy for beginners is known as ‘buy and hold.’ This involves buying a currency pair and holding onto it for a long period, regardless of market fluctuations.
Another common strategy is known as ‘trend following,’ which involves buying currencies that are experiencing upward momentum and selling those that are losing value.
Whatever strategy you choose, make sure you backtest it before putting real money on the line!
Keep in mind that forex trading is a high-risk activity and you can lose money, so don’t invest more than you can afford to lose. And always remember to practice risk management by using stop-loss orders and limiting your leverage.
With these tips in mind, you’re well on your way to becoming a successful forex trader!