The value of your order will depend on the units of a currency traded. Generally these units are referred to as lots. You will see the option to choose the number of lots that you want to trade on the brokers platform. Most brokers allow to trade custom number of lots, for example you can trade 5 Mini Lots, or even 5. Brokers like FxPesa, Exness etc. that offer MetaTrader have this option. Capital Markets Authority CMA of Kenya has made online forex trading in Kenya more regulated now.

To trade forex in Kenya via a locally regulated broker, you need to open an account with any of the forex brokers regulated and licensed by CMA. There are six such brokers who are regulated by CMA: EGM Securities, PepperStone Kenya, ForexTime Exinity Group , HotForex, Windsor Markets and Scope Markets. There are also global foreign regulated forex brokers accepting traders from Kenya - that are regulated with foreign regulators like Financial Conduct Authority FCA , Financial Sector Conduct Authority FSCA , Australian Securities and Investments Commission ASIC and the likes.

It is recommended that you choose the only brokers that are licensed by CMA. Only this will ensure that you are trading forex legally. Almost all the brokers provide demo accounts. Demo accounts are like real trading accounts, and your can trade and understand the nuances of trade just like real trading account without risking your real money.

But it is still a good place to learn trading. Most Forex brokers have a Live Account Opening page on their website. Live this example from FxPesa's website. Generally, the steps involved are the same. You need to fill your 'Account Information' details, your Financial Adequacy information.

Then you need to submit your 2 KYC documents i. For the KYC, it is essential that you submit valid documents as this will prevent any issues during withdrawals. For ID proof you can submit copy of your Passport or any other National ID.

For Address proof, you can submit your phone or any other Utility Bill. ECN Electronic Communications Network brokers is where the investors directly get connected to the other investors in the Forex Markets and the fee is calculated by the volumes traded by the clients that pass through the ECN environment. STP or Straight Through Processing is where the broker passes the trades to liquidity providers for execution and gives access to interbank market structure.

Even though having DMA gives you wider access to markets with higher rewards and risks, but finding true brokers providing DMA is difficult and tricky.

You should avoid brokers that are market makers as these brokers take position against you. So any loss that you make with a market maker forex broker is the profit of that broker. All the CMA licensed online forex brokers are 'Non-Dealing' which means they don't operate a dealing desk.

So, they are not market maker brokers. If you are a beginner, you should choose brokers with standard spread accounts only where the broker preferably offers STP accounts like in case of Hotforex. The expert traders can go for ECN type account. These have low fees but commission is charged as per the trading lots.

With Zero Account it is 0. So, if you are a trader trading high volume, it would be right decision to open your trading account with Zero Account for saving on the broker's trading fees. Many brokers offer a lot of options when it comes to opening accounts with them.

All these accounts require a minimum account balance. This would ensure that a sizeable position could be taken in trading and a good profit could be earned on positive market movements. However, it should be kept in mind that a position would depend on the balance maintained and the leverage offered by the broker. Trading positions also depend on the lot size that one opts for.

One can trade in Standard lots , units , Mini lots 10, units or Micro lots units. Knowing this information is very helpful as this would help in determining the level of risk one can take and what position to take in the trades. The broker offers a leverage of and 0. Generally, the very liquid forex pairs have changes in the range of of pips. So, one can generate a good return if you invest wisely with low leverage.

However, the risk appetite should also be kept in mind. Regulated forex brokers like FXPesa, Scope Markets Kenya , PepperStone Kenya allow traders the option to fund trading account in KSh. using local bank trasfer via bank account in Kenya. With this method it can generally take upto 24 hours for the broker to credit your trading account.

Generally both these methods are instant for funding, and it takes few hours in case of withdrawals. But it takes few days for withdrawals in your bank account. It is really important to understand the risks, so you can take preventive action to minimize them. Forex deals with exchange rates and currency pairs. Forex market is quite volatile. As per the global financial markets, the fluctuations in exchange rates could be various economic, geopolitical, social, etc. The currency pair which can give a profit today may incur a loss tomorrow.

Therefore, to cover the volatility risk, one has to study the exchange rates and currency movements very carefully. In forex trading, the risks of incurring huge losses should be covered using hedging instruments like derivatives. High leverage means trading on the capital which is not owned or is borrowed. So, if the leverage is high then the losses on that becomes a double burden on the investor to pay off. To safeguard the money invested and to cover oneself from any fraudulent practices, one must always trade with regulated brokers.

The risk-reward ratio should be calculated before investing as the markets are volatile and an investor should be sure how much money is expected to be gained and what is the maximum loss that can be incurred.

The predictable loss should always be less than the predictable profit. There must be a limit stop loss order in place that protects against loss to the minimum. Remember, Trading CFDs are risky instruments as they involve a leverage. The loss incurred may be more than the money invested. Hence, these products should be tracked and tested on demo before trading live.

The traders in the financial markets lose money, as losing is one of the aspects of trading. Most traders use Technical analysis in their trading, but it is still important to learn both.

Fundamentals affect the outlook of an economny. A bad economy would mean a bad currency, and vice versa. So it is important to undertand the basics of Fundamental trading. Technical analysis involves trading based on the charts, reading the patterns, using charting tools, indicators etc. to figure out the currency's movements. Traders that use technical analysis read the chart using methods like candlestick patterns, Supply Demand, trendlines, support resistance etc.

Below is an example of how a trading chat looks like. A technical trader would analyse different time frames as well during analysis. If you are just starting out, it is really important to spend as much time as you can to learn about the concepts of Forex, CFD trading; it's risks, strategies etc.

Once you have learned the basics, start by opening a demo account with a broker of your choice. Trade using that demo account until you have a good strategy that works, and has been tested over a period of months minimum. Ony once you are fully comfortable, then you can start by investing real money. Start with low capital, and trade mini lots only.

Follow all the money management lessons. Enter your email to get the link to download the PDF version of this Forex Trading in Kenya PDF guide. Forex Trading in Kenya Complete Guide for Beginners. Download PDF Guide. Emmanuel — Last Updated February 11, Summary of Best Online Forex Brokers for Beginners in Kenya in Forex Broker Highlights Average Fees EURUSD Account Minimum Current Offers Learn More. Chapter 1 What is Forex Trading? How does Forex market work?

By trading in the forex market, you can exchange one currency for the other. Example of Real Life Foreign Exchange Trading Let's say you have 20 US Dollars, but you want Kenyan Shillings instead. Chapter 2 Currency Trading Terminology. Retail traders come to the forex market to speculate, hedge against currency and interest rate risk, etc. The activities that take place in the forex market are what determine the exchange rate of any currency pair.

The higher the demand for a currency, the higher its exchange rate. The forex broker is a regulated participant who acts as a bridge between the forex trader and the market. The broker is a middle man who places buy and sell orders for retail traders and some brokers also offer research services as well if required by the trader. The forex broker charges a fee for their services. That being said, retail traders need to pass through a forex broker that accepts retail traders if they are to access the market.

There are several forex brokers in Kenya to choose from. There are two types of brokers. They are classified based on their execution model. Here is the breakdown. Dealing Desk Broker: Dealing desk brokers take the opposite side of your trades. When you buy a currency pair, they sell. When you sell, they buy. Because of this, when you lose a trade, they make money off it, leading to a conflict of interest.

This is why traders tend to prefer non-dealing desk brokers. Non-dealing Desk NDD Broker: NDD brokers do not take the opposite sides of your trades and they are divided into two. This type is referred to as an ECN broker.

The second type is the STP brokers. Retail forex traders are individual investors who wish to trade in the forex market for personal gain. They account for an estimated 5. Retail traders are in the market mostly for speculative reasons. They hope to profit from differences in exchange rates between currencies. Their presence in the forex market is to create policies that can affect the currency, intervene and stabilize the currency through increasing or decreasing interest rates, performing Open market operations in some situations, etc.

Central banks can also devalue their currency to make exports of their country more competitive to international buyers. In short, the Central bank plays a major role in deciding the value of a currency.

Commercial Banks make up the interbank market where they trade forex with other banks in very large volumes. These volumes are large enough to dictate the bid and ask prices for any currency.

They trade on behalf of themselves and their customers. Big companies that operate in different parts of the world have to trade in the forex market to hedge risk and also for business purposes.

A company hoping to buy raw materials from another part of the world may need to convert its currency to be able to pay the supplier at the other end. Big companies who have business operations in other parts of the world may also want to convert and repatriate their profits in a stronger currency to hedge against the risk of currency depreciation.

Depending on the currency that you want to trade, some sessions can be better than others. The best time to trade the majors is when some of the major sessions overlap. At this time, market participation and liquidity are high, and spreads are at their lowest.

All the countries participate in the forex market and their currencies are represented as three-letter codes. However, we will focus on the popular currencies here. The popular currencies and their codes are listed below.

They usually have the USD on one side of the quote either as a base or quote currency. Examples in order of popularity are:. These are currency pairs involving a major currency and a currency of a smaller economy. These smaller economies are often referred to as emerging economies.

Examples are. The base currency is usually on the left while the quote currency will be on the right. Here is an illustration below. When you go long buy on a currency pair, the base currency is being bought while the quote currency is being used to pay for the base currency.

It is the other way round when you go short sell on a currency pair. Currencies are always traded in pairs at an exchange rate. The exchange rate is how much of the quote currency is required to buy the base currency.

The Bid price is the highest price a forex trader is willing to pay to buy the base currency from the broker. Forex brokers quote these two prices on their trading platforms.

They are always obvious that you cannot miss them. Certain terms are widely used in forex trading and understanding is very important. We shall discuss some common terms below. A spread of 0. Variable spreads: As the name implies, variable spreads are spreads that fluctuate. This fluctuation is due to changes in the condition of the market like high or low volatility. This type of spread is usually offered by NDD brokers as they try to get the best market price for your trades.

Fixed Spreads: These are spreads that remain the same regardless of market conditions. They are usually offered by market makers. Market makers determine the price of the currency pairs they offer. So they can keep the bid and ask price stable no matter the market condition. As seen in the example above, if the spread is 0. This is for a currency up to the fourth decimal. So, the margin that you need to trade depends on the total lots or units that you are trading.

If you are trading 2. Leverage in forex trading is essentially taking a loan from your forex broker to trade most lots. The loan is repaid after you sell and make a profit or a loss. But this is very risky and can result in huge losses. For example, if you lose big on a trade, and if the forex broker does not have Negative balance protection in place, the trader may have to repay more than the initial capital if the losses exceed capital.

This is a good faith deposit a trader must keep in his trading account. It is expressed as a percentage and is inversely proportional to leverage. Once you lose the deposits in your CFD trading account, the brokerage system automatically closes all your positions.

It limits your loss to just your capital and ensures that the forex broker does not take the risk of your position. Negative balance protection is offered to only retail traders and not institutional traders. Some regulated forex brokers in Kenya like Hot forex, Avatrade, and FXPro offer negative balance protection.

CFDs are derivatives. Derivatives are complex financial instruments that derive their value from other underlying assets such as Stock, Currency, Commodities like Gold, precious metals, etc. When trading CFDs, a trader does not own the underlying asset and is only speculating on the price of the instrument.

Traders sometimes trade derivative instruments such as currency futures and currency options to hedge against currency and interest rate fluctuation risk. Day traders are usually speculators and use derivative products like CFDs to try to profit from the rise or fall of the price of an asset. To open a forex trading account, you need to first choose a reputed broker that is regulated by the CMA.

After you have done your research and decided on the forex broker that you want to trade with, then you should proceed with opening your trading account. We will take FXPesa as an example. The steps involved are generally the same for all forex brokers. Step 2 Open your Trading Account: Go to the website of the broker that you want to signup with.

This can be a very lucrative investment opportunity if done correctly. In this article, we will discuss the basics of Forex Trading and provide some tips to help beginners get started.

Forex trading is the simultaneous buying of one currency and selling of another. Currencies are traded through a broker or dealer and are sold in pairs. When you buy a currency pair, you accept the base currency and sell the quote currency. To buy or sell a currency pair, you first have to open a margin account with a broker that offers forex trading services. Once your account is funded, you can place orders to buy and sell currencies.

Leverage is a loan your broker gives you to increase your exposure to the market. Margin is the amount of money that is required to open a position.

Once you have placed your order, the trade will be executed at the current market price. If the market price moves in your favour, you will make a profit. If the market price moves against you, you will incur a loss.

It is important to note that leverage can work both ways. While it can help you make more profits, it can also magnify your losses. This is why it is crucial to use stop-loss orders when trading with leverage. A stop-loss order is an order that will close your position at a set price to limit your losses. Forex trading is conducted online through a broker.

You will need to open an account with a broker that offers Forex trading services. It is crucial to choose a reputable broker that is regulated by the Capital Markets Authority CMA. Once your account is funded, you can begin trading! When choosing a broker, it is important to compare fees, spreads, and leverage options. Some brokers may also offer bonuses or promotions to new clients. It is essential to read the terms and conditions of any bonuses or promotions before signing up.

Here is a step-by-step guide on how to start trading Forex:. Before you start trading, it is vital to learn the basics. You can find a lot of information online or in books. An excellent place to start is the Babypips website which offers a free online course. As we mentioned, you will need to open an account with a broker that offers Forex trading services.

Choosing a reputable broker regulated by the Capital Markets Authority CMA is crucial. A demo account is a practice account that allows you to test out the platform and try trading with virtual money.

This is a great way to learn how to trade without risking any real money. Most brokers will require you to fund your account with a minimum deposit before you can start trading. Once you have placed your orders, you must monitor your positions to ensure that you are making a profit.

All Forex brokers in Kenya should be authorized and regulated by the Capital Markets Authority; this is good and should protect you as a trader from losing your money. However, it would be best if you were careful as companies could scam, or something they do can get you charged with a crime.

Finding a broker requires some research, but you can do this easily by looking for a broker approved by the government. In addition, you should look for a company that offers low commissions on its trading platform.

One central point to look for in an online forex trading broker is customer service. It should be one of the essential points you consider when looking at brokers, assuming it can make your experience better or worse. There are various account types for forex traders, depending on the size of their capital. Brokers operate in Kenya to make money, charging fees on transactions, so you should expect excellent customer service. Although brokers can be native or foreign, it does not matter if they serve Kenyans.

To minimize the negative impact of a bad broker, they should be prompt with their responses and resolve trading problems quickly. Furthermore, if a broker ignores you or provides poor service, you should not work with them. If brokers offer good support services, it is worth opening an account because they are less likely to treat you poorly than less.

Forex is a subtle way of making money online. It would help if you approached it with care. In addition, consider the tips below to be a successful Forex Trader in Kenya. Here are a few additional resources to help you in your journey to becoming a successful Forex trader:. The School of Pipsology : This website offers free courses that teach Forex trading basics.

The BabyPips Forum : This forum is a great place to ask questions and get advice from experienced traders. TradingView : This website offers free real-time charts and market data.

Good luck! Home Business Finance Mobile Loans Investment Technology Online Phones Agribusiness Education. Home Personal Finance. Forex Trading in Kenya: The Definitive Guide Written by Simon Mwangi. November 14, Simon Mwangi As a freelance writer with a background in banking and accounting, Simon has the financial know-how to produce quality content on various topics. His experience gives him a strong foundation in understanding complex financial concepts and communicating them in an easy-to-understand way.

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I will tell you in this article where we will list some of the highest currencies in Africa. The African continent is home to 54 countries with various How to Send Money from Mpesa to Equity M-Pesa and Equity are the best platforms for business owners.

Most business owners receive money via M-Pesa, and the easiest way to bank the money is by transferring it to Equity Bank. The process eliminates unnecessary bank trips, and it The Importance of Retirement Planning in Many people do not realize the importance of retirement planning until it is too late.

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All these accounts require a minimum account balance. In this post, we will talk about How Cash App works, the different features it offers, and how Currencies are traded through a broker or dealer and are sold in pairs. Day traders are usually speculators and use derivative products like CFDs to try to profit from the rise or fall of the price of an asset. Step 4 Download the Platform: All brokers offer platforms like MetaTrader or their own proprietary platforms. CMA Regulation Kenyan Best FX Brokers Kenyan Brokers List Verify CMA Brokers Brokers accept M-Pesa ECN Brokers Kenya MT4 Brokers Kenya High Leverage Brokers Kenya Lowest Spread Broker Kenya.

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