Kenyans have continued to embrace the immense opportunities offered by the internet. From academic writing, article writing, digital marketing, and even working as online virtual assistants, thousands of Kenyans have ventured into online work and business in a massive way.
The latest hot cake is online Forex trading in Kenya where, unlike the traditional Forex exchange in Kenya, trading is completely done via internationally affiliated internet portals.
Now, the purpose of this article is to shed light on some of your burning questions on how to make money from online Forex trading in Kenya.
I will also expound on the various Kenya forex answers as we obtained them from our interview with one of the most successful Forex traders in Kenya (She requested we withhold her names because of privacy).
Let’s start with the basics:
What is Forex Trading?
Forex stands for foreign exchange. Subsequently, Forex trading simply involves actively buying and selling various currencies including US Dollars (USD), Euro(€), Sterling Pound(£), Japanese Yen (¥), and more.
This business largely involves speculation. This means you buy/sell your currency of choice hoping to make a profit later after selling/buying from a raise/fall in the prevailing currency prices.
Let’s take a very simple illustration:
If today you buy a USD at sh100 and sell it at shs.101.5 after 2 hours, you will have pocketed a gain of shs.1.5. Let’s now assume that you had bought 100 Dollars (Shs.10,000). The profit would now be sh.1.5×100= shs. 150. Like other businesses, the more you invest, the more the earnings. And of course, the higher the risk since prices can also fall within a fraction of a second.
This trade has been existing for years with many of Tier 1 and Tier 2 banks in Kenya exclusively offering this service under the close supervision of the central bank.
But now technology has opened up the Forex world leading to an explosion of internet-based Forex trading (online Forex trading) in the country.
What is Online Forex Trading?
As I have hinted above, online forex trading is conducted via the numerous genuine Forex trading sites, most of which are foreign controlled.
This means that Forex no longer operates on a central foreign currency exchange site like say the conventional stock exchange market trading so online Forex buying and selling runs 24-hour across the globe.
Here is the most interesting bit:
The Forex trading market is now the largest exchange market in Earth and beats even the gigantic New York Stock Exchange (NYSE) in terms of typical daily trading volume by over a hundred times (Over 6 Trillion dollars change hands in Forex markets daily!).
And since the majority of the trading is conducted by private individuals and entities, Forex trading has become a money-spinning side hustle.
How Does Online Forex Trading Work?
Since there is no controlling central exchange, Forex trading takes place directly between two parties. Sellers and buyers thus communicate and do business via their phones (Apps), computers, tablets, or any other device which can access the internet.
How Do I Start Trading Forex?
The best way to commence this business is to undergo some training first. This helps you reduce the risk and avoid some of the losses usually suffered by individuals who venture directly without prior know-how.
Basic Forex education will take you from the introduction to the terms including pips, volume in trade, candles, and more (I don’t want to scare you with terms for now LOL) and all the way to how to open and manage your own online Forex account with one of the established and licensed Forex brokers.
I know you are wondering where to go for forex trading training – Kenya. Well, you can self-train on sites such as BabyPips.com then open a free demo account to practice the trade.
But there is an easier route if you have the resources- that of enrolling in a physical Forex training institution like the Kenya Forex school for a comprehensive online forex training program. The charges are about $500 (shs.50000).
There are also several successful private Forex traders offering training and mentorship online and offline. Another option for self-learning is the numerous Forex forums in Kenya (You can search for them on Facebook).
As you will learn during trainings, the best time to deposit your money and start actual trading is after mastering the nitty-gritties of the business.
Trading itself is super simple (The hardest part is studying and understanding the markets):
- You Log into your account.
- Then select whether to trade through spread betting, spot FX or CFDs.
- You will now pick your currency pairs (normally the currencies are selected in twos for example USD/JPY, EUR/USD etc.) then open a position.
From there you will be accessing live price feeds, the all-important streaming charts, and Forex news instantly in addition to trading 24-hours a day.
However, Forex is not a get-rich quick scheme and you need to be patient, focused, and have great money discipline to succeed.
Can you make money in forex trading?
Yes, and a lot of it- if you have the right attributes. One of the Kenyan professional traders (again name withheld) mentioned that you can easily reach the $1000 income per month within a couple of months after starting.
He also added that it’s possible to make as much as $10000 per month once you become a guru.
In short, the earning potential is humongous.
How Much Is Needed To Commence Trading Forex in Kenya?
Gurus advice that you can start with as little as $10 (shs.1000) as you learn the ropes though a number of them recommend a minimum of $100(shs.10000).
Please note that this should be after you have aced the demo trading. Then, as it happens with every other investment, only invest the amount you can afford to lose since the risk is as tremendous just like the income prospects.
My Forex veteran further advises that you should engage in online Forex trading like a true business and to treat it with the commitment needed to see a real business succeed.
Trading Accounts Verification
Remember that you have to verify your trading account to be permitted to operate it. The company will ask for a document like a utility bill (water or Kenya power post-paid bill) showing your physical address. They also request for a copy of your national ID or passport to authenticate your full names.
This is one way that these companies filter fraudsters and bad elements from their Forex trading platforms.
Is Forex legal in Kenya?
Sure, Forex trading is legal in Kenya. Indeed, like the Nairobi stock exchange, Forex is regulated by the CMA (Capital markets authority). They are the body responsible for licensing and monitoring of all Forex brokers.
Currently, CMA has only approved execution point limited (trading as EGM securities) and Standard Investment Bank (SIB) Limited to practice as Forex brokers.
Equity bank also launched their online Forex brokerage system recently.
That being said, it’s important to know that there are thousands of Kenyans who offer Forex account management services for those willing to trade but lack time to personally learn the markets. These individuals are outside the scope of CMA so you will need to do your own due diligence before trusting anyone of them with your money.
Let me now explain what Forex account management is to help you understand what I mean:
What Is Forex Account Management?
Under this arrangement, you enter into an arrangement with an experienced Forex trader where he/she will be trading on your behalf in return for a commission.
You will need to deposit with your chosen expert a specified amount of money (most will ask for a minimum of $100) then wait to receive a share of the profits at the end of the month.
The expert can be a broker, for example, a registered company like SIB. The deducted commissions range varies from one trader to the next as do the percentage share of the profits.
There have been some Forex scams in the past so be careful when selecting an account manager- that is if you decide to head in that direction.
The best bet, however, remains you creating time to understand at least the basics as it will be hard to be scammed when armed with sufficient knowledge.
Which Are The Recommended International Forex Brokers?
Most of the trade has to go through an independent offshore Forex broker’s platform. Now, there are both great and not-so-great Forex brokers so you will need to be careful.
Here is a list of some of the legit international Forex brokers that you can trade on from Kenya:
What Is The Best Time To Start Trading Forex In Kenya?
As far as online Forex trading is concerned, there is no better or worse time to trade in Forex in Kenya.
Rather, it’s an issue of doing your market analysis thoroughly and making the right moves.
That way, you will never have to worry what time of the day it is and you can continue earning 24/7.
How To Top Up and Withdraw Funds From Your Forex Account In Kenya
You will often be withdrawing and topping up your Forex account depending on your trading strategy and how the business goes.
The thing with Forex account money topup/withdrawal is that some of the banks are skeptical of huge deposits/withdrawals to a bank account so traders use other means such as Skrill, Netteller or the Bitcoin – for platforms that accept these methods of payments.
In addition, topping up using your credit card is tricky as banks tend to be suspicious especially as some of them consider online Forex trading to be a form of internet gambling!
Even worse, credit card top-ups may take up to 7 days for your payment to be completed wasting for you precious trading time.
As I promised at the start of this article on how to make money from online Forex trading in Kenya, I have tried to provide some of the fundamental forex trading in Kenya answers.
And as we have seen, with persistence, determination, and hard work, online Forex trading can make you the newest millionaire in town.
Most importantly, invest what you can afford to lose. And play smart.
Happy and fruitful trading!