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7 Best Regulated Forex Brokers in Kenya

Forex Trading in Kenya is an extremely popular activity among retail and institutional traders. All forex transactions are overseen and well-regulated by the Capital Markets Authority (CMA) of Kenya and according to statistics, there are over 100,000 active retail traders in Kenya, with this number steadily increasing as more individuals discover the benefits of trading forex.

 

Top 10 Brokers in Kenya

Broker

Rating

Regulators

Min Deposit

Leverage

Sign Up Bonus

Spreads

Website

1

9/10

FSCA, FSA, CySEC, FCA, CBCS, FSC (BVI), FSC

$10

1:Unlimited

10%

0.1 pips

2

8/10

ASIC, FSA

$100

1:400

40 USD

0.91 pips

3

8.7/10

CySEC, FSC, CFTC

$5

1:500

30 USD

1 pips

4

8/10

FSA, FCA, CySEC, FSCA

$100

1:20

30 USD

0.07 pips

5

8.5/10

FSA, FSCA

$100

1:200

20 USD

0.9 pips

6

8.4/10

FSA, CySec

$1

1:3000

30 USD

0.3 pips

7

8.3/10

IFSC, CySEC

$100

1:3000

100 USD

0 pips

8

8.2/10

FSC, IFSC, MFSC

$10

1:400

50%

0.4 pips

9

8.1/10

IIROC, ASIC, CFTC, NFA, FCA, FFAJ, MAS, MFSA

$0

1:200

1000 USD

0.2 pips

10

8/10

CySec, FSC, FSA, BaFin, NFA

$100

1:200

30%

1.5 pips

Top 10 Brokers

Broker

Deposit

Leverage

Website

1

$10

1:Unlimited

2

$100

1:400

3

$100

1:500

5

$100

1:200

6

$100

1:3000

7

$100

1:3000

8

$10

1:400

9

$0

1:200

10

$100

1:200

 

While there are hundreds of forex brokers in the world, it is crucial for Kenyan traders to only use the services of reliable, regulated forex and CFD brokers to ensure the safety of their funds. We have created a comprehensive list of the best-regulated forex brokers in Kenya.

 

We have compiled a list of the best Forex brokers in Kenya based on reliable and independent evaluations. Our evaluations, cost comparisons, and regulations may help you pick the best choice for your needs. Beginner forex instructions are also available on our website. If you are interested in learning more about forex, check out our articles and tutorials.

 

The Best Regulated Forex Brokers in Kenya are:

🏛️ Broker⚖️ Regulation and Authorization💳 Minimum Deposit📈 Lowest EUR/USD Spread📊 Leverage🔎 KES Account
ExnessFSA, CBCS, FSC, FSC BVI, FSCA, CySEC, FCA4,100 KES0.0 pipsUnlimitedYes
FXPesaCMA, FCA500 KES0.0 pips1:400No
Pepperstone Markets Kenya LimitedASIC, BaFin, CMA, CySEC, DFSA, FCA and SCB16,000 KES0.0 pips1:400No
Scope MarketsIFSC, FSCA, CMA, CySEC11,400 KES0.9 pips1:500No
Exinity East Africa LimitedFSC, FSRA, CMA, FCA, FSCA2,200 KES0.0 pips1:2000No
HotForexFSCA, CySEC, DFSA, FSA, FCA, FSC, CMA550 KES0.0 pips1:1000No
AvaTradeCBI, BVI FSC, ASIC, FSCA, JFSA, FFAJ, ADGM, CySEC, ISA11,400 KES0.9 pips1:400No

 

Pros and Cons of Forex Trading

✔️ Pros❌ Cons
Of all the financial markets, forex is the most accessible with low minimum deposit requirementsAll markets show certain degrees of volatility, the forex market is not any different and Kenyan traders can experience unexpected and drastic volatility
Kenyan traders can participate in online forex trading using trading software such as MetaTraderThe forex market is massive and there are trillions traded daily by major participants like banks, hedge funds, financial institutions, and others, which means that they have an advantage over small volume retail traders
Retail traders can use leverage to increase their exposure and profit potential in the forex marketThe regulatory protection in the Forex market is not as strict as others, such as the stock market, attributable to the fact that the forex market is an over-the-counter (OTC) market
There is a lot of potential to earn fast returns because the market is fast-moving and liquid because of the sheer daily trading volumesAs opposed to stocks and bonds, forex trading does not have residual returns and capital gains are made from one of two currencies in a pair appreciating
Kenyan traders can easily short-sell when they trade forex
The Forex market is the most liquid financial market in the world
Kenyan traders can do extensive technical analysis to help them become more profitable traders
The potential of insider price manipulation is very small because the forex market will always correct itself and because the forex market is decentralized and not influenced by insider information
Fewer fees and lower commission charges because forex trading costs are only determined by the bid-ask spread
Forex trading is subject to simpler tax rules than other financial markets
Kenyan traders can easily automate their forex trading using expert advisors and other trading robots

How to Start Trading Forex In Kenya Step by Step

✅ Step 1 – Educate Yourself in Forex Trading and the Foreign Exchange Market

👉 Everybody learns Forex trading in their own unique way, which is why it is so difficult to discover a universal guide.

 

👉 Typically, traders would research success stories from across the globe and attempt to incorporate some of the ideas into their own ways. This, however, might be quite dangerous, simply because most success stories involve individuals taking significant risks and getting fortunate in the market.

 

👉 While it may take longer, risk-free methods of learning about Forex trading for novices are highly recommended and these include:

➡️️​ Online guides, videos, tutorials, and other materials for education

➡️️​ Using Copy Trading platforms to copy the trades of successful traders

➡️️​ Learning through trading by using Micro and Cent Accounts

Step 2 – Learn and understand the terminology

👉 If you are new to the Forex market, chances are you have come across an article or forum post that references phrases like “pips”, “cross-pairs”, and “margin”. These are fundamental terminology of the Forex market that all traders should be familiar with. Other terms that you must know include:

➡️️​ Currency

➡️️​ Currency Pair

➡️️​ Exchange Rate

➡️️​ Bid/Ask Price

➡️️​ Spread

➡️️​ Pip

➡️️​ Going long/short

➡️️​ Leverage

➡️️​ Margin

➡️️​ Lot Size, and others.

Step 3 – Open a Demo Account

👉 A demo account for FX trading is a trading account that contains virtual money and is linked to the live market. Trades can be executed in real-time and reflect what realistic losses and profits would look like if the money were real.

 

👉 Before you invest a single dime in trading, you will need some experience. A demo account enables you to practice trading without the risk of losing money.

Step 4 – Familiarize Yourself with the Risks associated with Trading Forex

➡️️​ Leverage in the foreign exchange market has the potential to result in losses more than the trader’s original investment.

➡️️​ The interest rate risk difference between currencies may cause forex prices to fluctuate rapidly.

➡️️​ Transaction risks are currency exchange rate risks linked with the time difference between the contract’s opening and settlement.

➡️️​ Counterparty risk is the risk of a dealer or broker defaulting on a transaction.

➡️️​ Forex traders should examine the nation risk associated with a certain currency, which means they should analyse the issuing country’s structure and stability.

 

👉 Forex risk management is a collection of discrete steps that traders take to protect themselves against the downside of a deal. Increased risk implies a larger potential of generating substantial rewards – but also a greater danger of incurring major losses.

 

👉 Subsequently, the ability to manage risk to limit losses while maximizing profits is a critical talent for every trader to possess.

Step 5 – Learn about Forex Trading Strategies

👉 You must adopt a disciplined attitude to the forex market, execute buys and sells according to the data, and avoid letting your emotions get in the way.

 

👉 Research the currency pairs that you want to trade and pick a trading strategy that reflects your personality. Additionally, it is prudent for novices to first concentrate on a single currency pair and avoid risking more money than they are willing to lose.

 

👉 If you believe your psychology is not up to the challenge, you can explore copying an expert’s trades, a practice known as ‘copy trading.’

Step 6 – Practice Trading Forex and Improve Your Trading Skills

👉 Experience is irreplaceable and it will assist if you invest the necessary time to practice trading. Countless brokers offer, therefore ‘free’ virtual demo trading accounts.

 

👉 Practice on the supplied demo account before risking any real money. Impatience and inexperience are the two key reasons why many novices fail at forex trading. Numerous forex ‘gunslingers’ charge headfirst into the market and they often run out of capital before they can make any profits.

 

👉 Develop a plan and practice executing trading orders, minimizing the risk of loss, and safeguarding your winnings, which is why veteran traders are adamant about their practice routine.

Step 7 – Register a Live Account

👉 You can register a demo account with any broker, but it is recommended to register a demo with a broker that you may want to deal with and register a live account first, this way you can test their trading platform and see whether their trading conditions are as stated on the website.

 

👉 Kenyan traders are urged to only use the services of a well-regulated forex broker. The Capital Markets Authority (CMA) is the regulatory authority in Kenya that oversees the forex market. There are currently six forex brokers who are regulated by CMA, and these are:

➡️️​ EGM Securities, trading under FXPesa

➡️️​ SCFM Ltd. trading under Scope Markets

➡️️​ Exinity East Africa

➡️️​ Pepperstone Markets Kenya Limited

➡️️​ HFM Investments trading as HotForex

➡️️​ Windsor Brokers

 

👉 However, these are not the only forex brokers who cater for Kenyan traders, and it does not mean that all other brokers are banned from operating in the country. Kenyan traders are free to use the services of other forex brokers who are not regulated by the CMA.

 

👉 However, if traders run into issues with their broker, and are not regulated by the CMA, Kenyan traders may find it difficult to get support on issues such as client fund security or the trading environment.

 

👉 Other Forex regulators who oversee many other brokers include the FCA, FSCA, CySEC, ASIC, and several more. These regulatory entities ensure that forex brokers that are licensed and authorized through them operate in a safe, transparent, and fair manner.

 

👉 To register for a live trading account, Kenyan traders must complete an online application in which they must provide personal information, contact details, their residential address, employment and financial details, and trading experience.

 

👉 In addition to the application, Kenyan traders are required to complete a “Know Your Client” (KYC) process in which their identity and proof of residence will be confirmed per the information they provided in the application.

 

👉 To prove their identity, Kenyan traders can upload:

➡️️​ A copy of their identity card

➡️️​ Driving license copy

➡️️​ Passport copy

 

👉 The proof of address that Kenyan traders must provide includes any of the following:

➡️️​ An updated utility bill

➡️️​ A bank or credit card statement

➡️️​ Any other document that has been issued by the Kenyan government and shows your full name and residential address

 

👉 These documents can be uploaded using your broker’s online platform or client portal. Ensure that the documents are clear, and that all information is visible.

Step 8 – Download Your Trading Platform

👉 Once your application and supporting documentation have been received and your broker’s team has reviewed it and approved your account, you can proceed by downloading your trading platform. This can either be a desktop terminal, a mobile app, or access to a Web-based browser, which does not need download or installation.

 

👉 You can sign into your account with the credentials that you registered or that you received from your broker once your account is verified and approved.

Step 9 – Fund Your Trading Account and start trading

👉 Before you can start trading, you must deposit funds into your trading account, unless your broker offers a no-deposit bonus that does not require a deposit. When you fund your account, you can only use the payment methods that are supported by your broker, and which are indicated on the broker’s website.

 

👉 Most brokers have a minimum deposit requirement that you must comply with if you want to start trading, this ensures that you can cover the margin requirement when you want to execute a trade. Alternatively, if the minimum deposit is low, you can apply leverage to open larger positions despite your initial deposit.

 

👉 Once your account is funded with the right amount, you can start trading!

Best Forex Currency Pairs for Beginner Kenyan Traders

👉 Choosing the best currency pairings to trade as a novice is not an easy undertaking, contrary to common assumptions.

 

👉 Many novice traders make the mistake of jumping into the first currency pair that comes to mind, only to discover that finding the best currency pair to trade as a beginner necessitates some research.

 

👉 Here are the best forex pairs for beginners:

➡️️​ EUR/USD – This pair is the most liquid, and has medium volatility, in addition to being supported by a stable economic structure.

➡️️​ USD/JPY – It offers competitive spreads and a more predictable trend than other currencies. This pair provides traders with extraordinary and rewarding chances. It accounts for 17% of all transactions on the Forex market, making it the industry’s second most liquid instrument.

➡️️​ USD/CHF – This pair is easier for beginners to understand than the others on this list. The pair, on the other hand, presents a challenge for traders who rely only on technical analysis.

➡️️​ EUR/GBP – Predictability makes this currency pair ideal for novices. A currency pair that is less volatile than any other is the Euro. Recessions and economic crises, for example, have a significant impact on currency values, so traders should keep an eye out for them.

Best Forex Currency Pairs for Professional Kenyan Traders

👉 More professional traders know how to effectively manage their risk and turn volatile conditions into more profitable trading opportunities. For this reason, the following currency pairs are perfect for Professional Traders in Kenya:

➡️️​ USD/JPY – It moves in a straight line and is more volatile than EUR/USD. Profitable pips and in-depth market analyses are generated by this forex currency pair, making it ideal for professional traders

➡️️​ USD/CAD – This pair is heavily influenced by Canadian oil prices. When oil prices rise in Canada, the Canadian currency strengthens, and vice versa when they fall.

➡️️​ GBP/JPY – The high volatility, risk tracking, and plenty of trading tools are just a few of the reasons why you would wish to trade this pair. Remember that the yen’s relationship to energy prices may have a substantial impact on the value of the British pound when trading the GBP/JPY.

 

👉 Beginners tend to choose large currency pairings like the EUR/USD or GBP/USD, which have lower liquidity risks. Because of the high volume of trading, the spreads on certain currency pairs are narrower and the danger of slippage is lower than on most other currency pairings.

 

👉 The USD/TRY or AUD/JPY are popular cross-currency pairings and minors for certain experienced traders. Carry trades, for example, are a common option for experienced traders.

 

👉 Traders are attempting to take advantage of the difference in interest rates between the two nations in this market. One of the most popular carry-trade instruments is the Australian Dollar/Japanese Yen (AUD/JPY).

 

👉 Cross-currency trading can be exceptionally dangerous since it often involves currencies from developing markets, which are often plagued by geopolitical instability.

Best Forex Brokers in Kenya

👉 We chose Exness as the overall best forex broker in Kenya because of its competitive trading conditions, low minimum deposit, micro-lot trading, and ultra-low variable spreads.

 

Forex Brokers in Kenya that offer MPesa

👉 Pepperstone Markets Kenya Limited is our choice as the best forex broker in Kenya that offers MPesa along with several other deposit and withdrawal options. Pepperstone is a CMA-regulated broker that ensures client fund security and provides some of the best trading solutions.

 

Best CMA-Regulated Forex Brokers in Kenya

👉 The best CMA-Regulated forex brokers in Kenya are Pepperstone Markets Kenya Limited, FXPesa, Exinity, Scope Markets, HotForex, and Windsor Brokers. These brokers are the only CFD and forex brokers who hold regulation through CMA, proving that they are trustworthy and reputable.

 

Top 10 Forex Brokers in the World

👉 The Top 10 Forex Brokers in the world, according to our in-depth research on the forex and CFD markets are:

  • Exness
  • Pepperstone Markets Kenya Limited
  • HotForex
  • XM
  • AvaTrade
  • FXTM
  • OctaFX
  • CM Trading
  • OANDA
  • com

 

Forex Brokers with a No-Deposit Bonus

👉 A Forex No-Deposit bonus allows Kenyan traders to start trading without needing to pay a minimum deposit first. The best Forex Brokers that offer a No-Deposit Bonus are:

  • Trade Nation – 1,000 points when Kenyans register an account
  • Tickmill – 10% Reward
  • SuperForex – $88 No-Deposit Bonus
  • MTrading – $30 No-Deposit Bonus
  • FBS – Up to $140 Level-Up Bonus
  • XM – $30 No-Deposit Bonus
  • MiTrade – $30 No-Deposit Bonus
  • RoboForex – $30 No Deposit Bonus

 

Forex Brokers with a $1 (110 KES) Minimum Deposit

👉 We chose FBS as one of the best brokers that offer Kenyan traders access to international markets with a deposit of 110 KES, or an equivalent of $1. FBS also offers the benefit of a Cent Account, maximum leverage up to 1:3000 and competitive spreads.

 

Forex Brokers with Low Spreads

👉 For the second year in a row, Tickmill’s VIP and Pro trading accounts earned the broker first place for commissions and fees in an annual study of the industry.

 

Forex Brokers that Accept PayPal

👉 We chose IG as the best forex broker in the industry that accepts PayPal deposits and withdrawals. IG is well-regulated and ensures that all client funds are kept secure. We also prefer IG because the broker has a long-standing history of excellence and reliability.

 

Best STP Forex Brokers

👉 We chose FXTM as the best STP broker in Kenya because of its reliable trade execution speeds, superior pricing structures, and its well-regulated trading environment that is safe for all Kenyan traders.

 

Micro-Lot Forex Brokers

👉 XM is an excellent option for traders who want to trade micro-lots. Accounts with XM are tailored to meet almost any trading style. XM Micro, XM Standard, XM Zero, and XM Ultra-Low Accounts are all available to Kenyan traders via this broker.

 

Forex Brokers With Cent Accounts

👉 RoboForex has been voted the best overall forex broker for cent accounts. Kenyan traders can open a Pro-Cent trading account with RoboForex with a low minimum deposit of 1,100 KES ($10), making it an ideal starting point for beginner Kenyan traders.

 

Forex Brokers that Trade the US30

👉 We chose Markets.com as the best Forex Broker that offers Kenyan traders access to the Dow Jones or US30. The DJIA costs that Kenyans can expect start from 2.4 points, with financing charges of SOFR +/-3.75% in overnight financing.

 

Best Forex Trading Apps

👉 We chose FXTM’s proprietary trading app as the best forex trading platform for mobile devices. Through the FXTM app, Kenyan traders can trade forex, make use of automated trading strategies and tools, and access instant deposits and withdrawals.

 

Best Kenyan NASDAQ Forex Broker

👉 We chose Capital.com as the best NASDAQ broker for Kenyan stock traders. Capital.com is a UK-based CFD broker with a significant foothold in the market. There are over 3,000 stock CFDs and 87 ETF CFDs to select from on this trading platform. In addition, Capital.com’s low-cost commission-free trading is one of its most appealing characteristics.

 

Best Volatility-75 Index Forex Brokers

👉 We chose Pepperstone as the best VIX broker because of its tight and competitive spreads from 1 pip. In addition, Pepperstone offers more than 28 indices that can be traded across trading accounts.

 

Copy-Trading Forex Brokers in Kenya

👉 For this category, we rank eToro as the #1 copy-trading platform for Kenyan traders. eToro’s social trading and Copy Trading capabilities have made it a popular choice for traders. You can simply imitate other experienced traders’ transactions using the copy trading feature.

 

PAMM Account Forex Brokers

👉 We chose SuperForex because the broker offers PAMM Accounts through its comprehensive SuperForex Bank.

 

Best Forex Options Brokers

👉 We chose AvaTrade as the best Options broker in the industry. Global brand AvaTrade is well recognized for its wide range of trading platform choices.

 

👉 During our investigation, we discovered that AvaTrade excels at copy trading, is competitive on mobile, has pricing and research that is in line with the industry average and excels at investor education.

 

Social Trading Forex Brokers

👉 With eToro’s easy-to-use copy trading platform, Kenyan traders can participate in social trading and use the platform to copy the trades of more experienced investors and get special benefits for sharing their own trading ideas. In addition, another added advantage is that self-directed trading and copy trading are seamlessly integrated through the eToro platform.

 

Forex Brokers that trade Cryptocurrency CFDs

👉 For its high-quality research, instructional material, and innovative online platform, Capital.com is an excellent choice. According to our research, Capital.com has been voted Best in Class for Cryptocurrency with a broad selection of over 200 cryptocurrency CFDs.

 

Best ECN Forex Brokers

👉 Over a dozen different currencies are supported by Admirals’ ECN accounts, making this broker ideal for minimizing currency translation costs. Admirals also provides MetaTrader add-ons that enhance the functionality of the platform with extra indicators and order tracking systems.

 

Forex Brokers with High Leverage

👉 We chose Exness for this category because the broker offers unlimited leverage ratios on some trading account options. In addition to this, Kenyan traders have a choice between trading accounts and access to powerful trading software.

 

Best Forex Trading Robots

👉 MT4 and MT5 trading platforms are supported by AvaTrade, making it one of the most competitive automated Forex brokers. In addition, DupliTrade, ZuluTrade, and the MQL5 Signal Service all enable social trading. The proprietary WebTrader, AvaOptions, and AvaTradeGO round out the wide range of trading platforms available at AvaTrade.

 

Best Forex Trading Tutorial / Education Broker

👉 IG provides a diverse range of educational resources in several media, as well as a specialized educational mobile app called IG Academy.

 

Forex Trading Versus Stock Trading VS Crypto Trading

💰 Forex Trading💰 Stock Trading💰 Crypto Trading
24/59 am – 3 pm (GMT+3) Monday to Friday24/7
InstantSlowInstant
OTCExchangesOTC/Exchanges
FastSlowFast
0.01 lots1 share or fractions1 lot or fractions
HighLowHigh
Very HighBlue Chip Stocks are the most liquidOnly major crypto e.g. BTC, ETH, LTC, DOGE, etc.
HighHighMedium
$6.6 Trillion7,369,200$500 Billion+
Short, Medium, Long-TermMedium and Long-TermShort, Medium, Long-Term
1:100 – 1:3000+<1:100<1:10
Yes
·Rarely as turbulent as Crypto
Yes
·Economic Performance
Yes
·Consumer Behaviour
·Supply and Demand

5 Best Professional Forex Traders in Kenya

👉 Some of the most well-known traders in the world have lived lives marked by victory and sorrow, and their exploits have become legends in the profession. The 5 Best Professional Forex Traders in Kenya are:

➡️️​ Patrick Mahinge

➡️️​ Sylvia Muchai

➡️️​ Ken Githaiga

➡️️​ Silah Obegi

➡️️​ Paul Mugenda

 

👉 It is easy to see certain similarities among this select group of very successful and well-known traders, namely:

✅ Trading discipline refers to the ability to formulate and adhere to a trading strategy.

✅ Management of Risk refers to the process of identifying and mitigating the potential dangers associated with each business transaction.

✅ Confidence in their work and analysis

✅ Shrewdness refers to the capacity to discern how perceptions are influencing market movements.

 

➡️️​ Patrick Mahinge

He founded Kenya Forex Firm, a company that offers training and portfolio management services for Kenyan currency traders. Additionally, he works from his home as an internet blogger and serial entrepreneur.

 

👉 Based on a friend’s recommendation, he got his start in the forex market and has gone on to become a successful trader and guide for other traders via his Kenya Forex Firm.

 

➡️️​ Sylvia Muchai

👉 Sylvia Muchai is the brains behind Sylvia’s Traders Lounge, a resource for aspiring stock market traders. With a $250 trading account, she entered the forex market in 2014.

 

👉 Through her own self-education, she has become one of the most successful merchants in the nation. In addition to reading books and going to seminars, you may establish sample accounts and practice trading.

 

👉 Today, she is eager to assist anybody interested in learning about forex trading from the ground up, regardless of whether they have any past trading experience.

 

➡️️​ Ken Githaiga

👉 When Ken Githaiga left college in 2008, he began trading forex. Self-taught, he learned what he knows through Google searches and YouTube tutorials.

 

👉 He does not consider forex trading to be his full-time profession and it subsequently only represents a minor portion of his overall portfolio. Githaiga is also an accountant and teaches novice forex traders at Jay Forex Academy.

 

➡️️​ Silah Obegi

👉 Silah Obegi is the founder and CEO of Meta Capital Limited, a financial firm that provides trading solutions for Kenyan forex traders. He is also the creator of the Nairobi School of Forex, one of Kenya’s most popular forex training programs.

 

👉 He graduated from Moi University with a degree in Business Management, and he put the knowledge he obtained there to good use when he began trading forex in 2012.

 

➡️️​ Paul Mugenda

👉 Paul Mugenda founded Paris Fx Kenya, a company that teaches newbies how to trade binary options. He has been trading the forex market since 2014 when he began with a $300 loan. He also advises young people and loves to trade binary options during his spare time.

How to Choose A Forex Broker in Kenya

👉 Before you decide on using a forex broker’s services and trading solutions there are a few things that you must consider and evaluate about a forex broker. To help you out, we have compiled a list of the necessary points to consider:

➡️️​ Regulation and Authorization

➡️️​ Trading and Non-Trading Fees

➡️️​ Range of Markets

➡️️​ Customer Support

➡️️​ Accounts and Features

➡️️​ Education and Trading Tools

➡️️​ Trading Platform

➡️️​ Deposit and Withdrawal Options and Speed

 

Regulation and Authorization

👉 There are many top-tier regulatory agencies, such as CMA, FCA, FSCA, ASIC, and others, that you should look for when selecting a forex broker.

 

👉 For example, a regulated broker may be held responsible for any illegal practices, such as stop-hunting or trading against consumers. However, if a broker defrauds you while you are dealing with an unregulated broker, you will have no recourse.

 

👉 As of February 2022, there are six forex brokers licensed by the CMA. The “List of Licensees” on CMA’s website might help you find these brokers. The list is typically updated once a month.

 

👉 The regulator’s website has a list of all regulated forex brokers. The CMA has a list of updated licensees that may be obtained from their website, as do most regulators. From this list, you may locate the license numbers of all licensed forex brokers.

 

👉 If a new broker is licensed in Kenya during the following month, or an existing broker loses its license, CMA will also update their list of brokers. The CMA-Regulated Forex Brokers in Kenya Are:

➡️️​ EGM Securities, trading under FXPesa

➡️️​ SCFM Ltd. trading under Scope Markets

➡️️​ Exinity East Africa

➡️️​ Pepperstone Markets Kenya Limited

➡️️​ HFM Investments trading as HotForex

➡️️​ Windsor Brokers

 

👉 Lastly, any sector, including forex, benefits from previous experience and a proven track record. Professionalism and expertise, as well as investor trust, are all signs that a brokerage firm has been in business for some time. It is usually preferable to work with an established broker rather than a startup.

 

Trading and Non-Trading Fees

👉 The ‘total fees’ charged by a forex broker should also be scrutinized. If you are looking for an all-inclusive price, you will need to look at the charges for both trading and non-trading fees, including spreads, commissions, overnight fees, inactivity fees, admin fees, deposits, withdrawals, and so on.

 

👉 Even if a broker claims to have a minimal spread, it may not disclose the fact that it charges a commission per transaction or fees for withdrawals. Therefore you must register a demo account when with brokers when you have narrowed down your list to at least 3 potential brokers to trade with, allowing you to see their trading conditions in action.

 

Range of Markets

👉 This refers to the number of financial instruments and the range of asset classes offered by the broker. Some brokers may only offer a few (less than 100) while others, like IG, offer over 17,000 different financial instruments.

 

👉 Evaluate what the broker offers and decide whether its range is extensive enough to ensure that you can diversify your portfolio.

 

👉 The availability of additional tradable assets may imply greater trading chances, but you must examine the trading instruments supplied by your broker to see whether they are compatible with your trading goals.

 

Customer Support

👉 You never know when you will need assistance, so having access to 24-hour customer service is critical. It might be anything from a question about withdrawals to a problem with the site itself.

 

👉 Only by testing a broker’s customer service can you tell whether it is excellent. To test it, you can use the communication channels that are present on the broker’s website under “Contact Us.” Forex brokers that have a Kenyan office and a local phone number should be sought out as a rule.

 

👉 Some forex brokers such as Scope Markets, EGM Securities, and others, have local offices in Kenya. However, while other international brokers do not have local support, they typically operate either 24 hours a day, 5 days a week, or 7 days a week.

 

Accounts and Features

👉 Every trader has their own unique set of trading objectives and requirements. Because of this, a reputable broker will provide a variety of account options to suit the demands of its clients.

 

👉 Individual traders may choose from a variety of forex account types, including regular, small, micro, and managed accounts. In addition, opening a trading account necessitates making periodic deposits and withdrawals of money.

 

👉 Multiple safe, secure, and easy payment methods and account currencies accessible for deposits and withdrawals are essential features of a reliable broker that caters to customers from across the world.

 

👉 This means that you should not be subject to high conversion fees when you deposit or withdraw funds as you are doing so in your local currency. Leveraged trading allows Kenyan traders to take greater positions in the market by risking a lesser margin amount.

 

👉 Overnight and on weekends, a credible broker will offer both variable leverage and fixed margin needs. For risk management purposes, a reputable broker would also protect traders against negative balances.

 

Trade Execution and Overall Execution Policy

👉 The fast-paced and dynamic nature of the FX market necessitates a high level of execution. Poor execution may quickly destroy even the best-laid plans. Investors may maximize their returns by taking advantage of market opportunities with the aid of a broker with fast execution and clear rules.

 

👉 Make sure you choose a broker that places a high priority on order execution excellence. As well as real-time execution, the broker must guarantee that there are no slippages, re-quotes, or price rejections at any given time.

 

Client Security and Fund Safety

👉 Every investor wants to know that they are doing their business in an atmosphere that is free of danger. Foreign exchange trading is about making money, not losing it.

 

👉 Trading with a broker that can guarantee the safety of your money and personal information is critical. To keep your money and personal information safe, the broker must use the most up-to-date security procedures and encryption technology.

 

Education and Research

👉 Continuous education and knowledge are essential for successful investment. If you do not know what you are doing, you will not be able to earn money from it. You should be able to access free educational resources, like articles, eBooks, videos, and webinars, from a reputable broker’s education center.

 

👉 To assist you to make better trading choices, they should provide you with market information and commentary from professionals. What you learn at foreign exchange school should eventually be a tool that helps you always make the best possible option in any market circumstance, no matter how challenging.

 

Trading Platform

👉 When it comes to forex trading, trading platforms are your front door. They make it possible to purchase and sell financial products, which is at the heart of the FX market’s operation. Traditional MT4 and MT5 platforms, as well as bespoke ones, are all options available to brokers.

 

👉 MetaTrader 4 (MT4) brokers appeal to investors because of the platform’s robust features and easy-to-understand interface. It is common for a trustworthy broker to maintain its own custom trading platform in addition to MT4 and MT5.

 

👉 Proprietary trading platforms offered by brokers with questionable reputations or no regulatory oversight should be avoided at all costs. Investors should be aware that such platforms might be abused to their detriment. Spreads may be widened, stops can be struck early, or take-profit orders might be missed at the proper timings.

 

👉 Choosing a broker with a trading interface that works well on both mobile and desktop platforms is essential for easy and flexible trading. Other considerations when evaluating brokers include:

➡️️​ Automated Trading Strategies

➡️️​ Social Trading and Copy Trading Functionalities

➡️️​ VPS Functionality

➡️️​ FIX API

 

Awards and Recognition

👉 For a brokerage firm, an industry award is a significant honour. Brokers’ reputation rises as a result, as do their total trading services as compared to those offered by competitors. Investors and traders can rely on them to verify the quality of the service provided.

 

Online Reviews

👉 Reviews are today’s equivalent of infomercials, and they might give you a better idea of what to anticipate from your chosen broker. Even yet, getting feedback from actual customers as opposed to the corporation or its marketing partners is priceless.

 

👉 Negative reviews are a warning indicator that a broker could be a forex scammer, while positive ratings serve as a testament to a broker’s trustworthiness.

 

Deposit and Withdrawal Options and Speed

👉 Always check to see whether the broker accepts your preferred deposit and withdrawal methods.

 

👉 The most common deposit and withdrawal options for merchants in Kenya are M-Pesa and local bank transfers. Make certain that the forex broker you choose has these options. In addition, verify the broker’s deposit and withdrawal processing times.

 

👉 In addition, verify the deposit and withdrawal fees that you may face when you use any of the payment methods offered.

The Basics to Forex Trading in Kenya That You Must Know

👉 Even though the currency market is open every day of the week, it is only closed from Friday evening till Sunday evening, making it a 24-hour market.

 

👉 The European, Asian, and New York trading sessions are all held at the same time. The most important currencies in each market are traded mostly during those market hours, notwithstanding some session overlap.

 

👉 The only way to trade currencies is in pairs. If you want to purchase or sell a currency in the forex market, you must buy one currency and sell another currency. In addition, all currencies have their values priced to the fourth decimal place.

 

👉 To trade at a given price, the smallest increase is called a pip or percentage point. Typically, one pip represents one-hundredth of 1%. Forex can be traded in different lot sizes namely nano, micro, mini, and standard lots.

➡️️​ A nano lot is 100 units of the base currency

➡️️​ A micro lot is 1,000 units of the base currency

➡️️​ A mini lot is 10,000 units of the base currency

➡️️​ A standard lot is 100,000 units of the base currency

 

👉 Compared to the hundreds of companies accessible on the global equity markets, the vast majority of currency trading activity is concentrated in only 18 currency pairings.

 

👉 Currency markets are attracting an increasing number of stock traders since many of the same variables that move the stock market also move it.

 

👉 Supply and demand is a major factor that drives the prices of currencies in the forex market. For instance, the value of the dollar increases as the demand for it increases and when there is too much money in circulation and supply trumps demand, the price will drop.

 

👉 Currency prices may be affected by other variables, such as interest rates, fresh economic statistics from the major nations, and geopolitical concerns.

Basic Forex Terminology

👉 Having a basic understanding of forex terminology is essential before you begin trading. To get you started, here are a few of the most often used terminology in the industry.

 

➡️️​ Currency Pair – Currency pairs are exchanged in forex: one currency is purchased, and the other is sold. 

 

➡️️​ Exchange Rate – the exchange rate at which one currency can be exchanged for another

 

➡️️​ Base Currency – the currency, which is first in the currency pair, e.g. in EUR/USD, EUR is the base currency.

 

➡️️​ Quote Currency – the second currency in the pair to the right, e.g. in EUR/USD, USD is the quote currency

 

➡️️​ A long position is when an asset is purchased with the hope that its market value will increase.

 

➡️️​ A short position is when an asset is sold with the anticipation that its market value will decline.

 

➡️️​ Bid and Ask Price – the bid price refers to the market price at which an asset can be sold and the ask price is the market price at which an asset can be purchased.

 

➡️️​ Spread – this is the difference between the bid and the ask price, expressed in “Pips”

 

➡️️​ Percentage in Point (Pip) – Any currency’s exchange rate can fluctuate by a pip and the change in the value of a currency pair on the forex market is quantified by this metric. In addition, profits and losses on the stock market are measured in pips.

 

➡️️​ Leverage – Increase your currency holdings without having to pay the whole exchange value upfront. It enables you to exchange bigger sums with a smaller quantity of money.

 

➡️️​ Margin – the minimum deposit required to keep a position open.

 

➡️️​ Lot – refers to the trade or the position size in lots, with a standard lot equal to 100,000 units of the base currency.

 

➡️️​ Stop-Loss – It is a risk management tool that allows a position to be closed when a certain price is reached. If the market continues to move in an unfavourable direction for the investor, this may safeguard against future losses on an open position.

 

➡️️​ Take-Profit – You may close a trade when it hits your pre-determined profit target using a take profit order. This safeguards against the investor losing out on profits due to a sudden change in price direction before the trade can be closed.

 

➡️️​ A bear market refers to a market in decline, suggesting that traders anticipate prices to decrease, implying that there will be more short selling (or traders ‘going short’).

 

➡️️​ A bull market refers to a rising market in which traders are eager to enhance their long trading activity (often referred to as ‘going long’).

An Introduction to Forex Trading Strategies for Kenyan Traders

👉 A forex trading strategy is a method that a forex trader uses to decide when to purchase or sell a currency pair. Forex trading methods may be technical in nature or fundamental in nature, depending on news occurrences.

 

👉 Typically, a trader’s currency trading strategy is comprised of trading signals that indicate when to buy or sell. Forex trading techniques may be found online or created by traders. There are almost no limits to the number of various criteria that may be used to assist you in developing a foreign currency trading strategy.

 

👉 Many Kenyan traders even like combining elements of other techniques to create one that matches their unique circumstances, interests, and ambitions. Developing your own forex trading strategy might be challenging if you are new to the market (or building strategies).

 

👉 Fortunately, there are several known ways that you can approach the forex market. You may either follow one of these popular solutions or design your own by incorporating elements from several sources. Some of the most popular ways to trade forex include:

 

➡️️​ Day Trading – Day trading methods for forex are like those used in other forms of investment. Instead of keeping positions open overnight, forex day traders will open and close trades on the same day.

 

➡️️​ Scalping – There are numerous low-margin transactions using a scalping technique throughout the day. The idea behind scalping is to enter and exit the forex market quickly, and the key to forex scalping is executing many transactions and having the discipline to search for a small profit that will eventually add up.

 

➡️️​ Swing Trading – Forex swing trading is based on the “swings” of the market, which is a longer length of time than forex day trading but shorter than position trading.

 

➡️️​ Position Trading – A position trading strategy is a more long-term approach to trading. This is when you take a firm position on a currency and hold it for an extended period. Because position traders often ride out significant negative swings, which means that they must ensure they have the capital to do so.

 

➡️️​ Hedging – You play both sides of the long and short fences in the currency hedging strategy. However, by taking both long and short positions, you could reduce your profit potential.

 

➡️️​ Trend Trading – Several popular forex techniques use elements of the trend trading approach. With trend trading, Kenyan traders monitor currency movements to choose whether to purchase, sell, or hold.

 

➡️️​ Range Trading – This can be viewed as a more inclusive approach to describing trend notions in trading. Traders search for broad ranges of currencies that will remain stable for extended periods. These ranges, or channels, will provide traders with a solid notion of what resistance and support will look like and when they will occur.

 

➡️️​ Breakout Trading – Traders use the breakout trading method when a currency moves outside of, or breaks out of, certain specific ranges. A currency that breaks above a previously recorded range may indicate that it will continue to gain, signalling a buy.

 

➡️️​ Momentum Trading – A forex momentum trading strategy places a premium on the direction in which the value of a currency is moving. Traders that use this method believe that a currency that is trending in a certain direction will maintain that momentum going ahead.

 

➡️️​ Retracement – Some more conservative traders choose the forex retracement technique, which involves waiting for a currency to “retrace its steps” in the opposite direction before entering.

 

➡️️​ Reverse Trading – For people with minimal expertise in the foreign currency exchange market, the reverse trading technique is not the ideal choice. This method involves traders analysing data to forecast when a trend will reverse, allowing them to purchase or sell in advance of the reversal.

The Basics of Forex Charting

👉 A forex chart is a visual representation of the price movements of currency pairs over a period. Technical analysts and day traders use these charts to spot trends and patterns that may indicate reversals, continuations, entrance positions, and exit points in the market.

👉 Many traders utilize forex charting software packages in combination with other technologies such as online trading to get an advantage over their competitors in the forex markets.

👉 A wide variety of periods are available in most Forex trading platforms’ charting tools, ranging from tick data to annual data. The x-axis of a standard forex chart represents the time or period, while the y-axis represents the exchange rate.

👉 There will be customizable options for technical indicators like price, volume, and open interest on the forex charting software. These indicators are often used by active traders because of their focus on short-term price fluctuations.

👉 The three most popular chart types are:

➡️️​ Line Chart

➡️️​ Bar Chart

➡️️​ Candlestick Chart

➡️️​ Line Chart

👉 One closing price to the next is shown by drawing a straight line. The overall price movement of a currency pair can be seen by tracing a line across the data points. Line charts are very easy to follow but they fail to provide in-depth information regarding the price movement within a certain period.

👉 All that traders know is that the price closed at X at the end of a certain period. However, line charts help traders see and follow trends easier and it allows them to compare a closing price from one period to another.

👉 Some traders place more importance on the closing price than on the open, high, or low. When just the closing price of a trading session is considered, price variations inside the session are overlooked.

(Image source: https://www.babypips.com/learn/forex/types-of-charts)

➡️️​ Bar Chart

👉 A bar chart is a graphical chart that is used to illustrate financial market pricing. Each tick on the chart represents the open, maximum, lowest, and final or “close” prices for a certain time. Each trading session’s price range can be seen clearly when using bar charts. If you have a variety of bars on a price chart, you will notice that the bars are different in size.

👉 The bottom bar shows the lowest traded price for that period; the top bar represents the highest paid price for that period. The currency pair’s trading range is shown by the vertical bar and the bars widen as the price fluctuation becomes more irregular. Subsequently, as the price changes grow less frequently, the bars become smaller.

➡️️​ Candlestick Chart

👉 Candlestick charts are an effective approach to tracking the price movements of an item. Candlesticks illustrate rapidly how far and in which direction an asset’s price changed within a certain period. Candlestick charts are popular because they have a more pleasing visual appearance than bar or line charts.

👉 Each candle signifies either the passage of time or the conclusion of a certain number of deals. You may customize the period and number of transactions in the chart provider’s settings. In addition, one minute and five-minute candlestick periods are popular for day trading.

Forex Trading Risk Management Components

👉 Forex risk management helps you to establish a set of rules and controls that will help you manage any unfavorable effect of a forex deal. Effective strategies involve thorough preparation from the start since it is preferable to have a risk management strategy in place before trading.

 

👉 The most common risks that Kenyan traders face when they trade forex includes:

➡️️​ Currency risk relates to price fluctuations in the forex market, making it either cheaper or more expensive to buy forex.

➡️️​ Interest Rate Risk refers to the sudden increase or decrease associated with interest rates which in turn affects the volatility.

➡️️​ Liquidity risk refers to Kenyan traders being unable to quickly buy or sell an instrument to avoid risk.

➡️️​ Leverage risk refers to magnified losses when Kenyan traders carry out margin trading.

 

✅ Control Your Emotions

👉 Volatility in the foreign exchange market may also have a detrimental effect on your emotions – and if there is one critical factor affecting the outcome of every deal you make, it is you. Fear, greed, temptation, uncertainty, and worry are all emotions that may either urge you to trade or obscure your judgment.

 

✅ Determine Your Risk Tolerance

👉 While most trading instructors will tell you to risk as little as 1%, 2%, or even 5% of your account’s worth on each deal, how comfortable you are with these amounts depends on your degree of trading expertise.

 

👉 Because novice traders have less experience and understanding of trading in general, or with a new system, it makes it logical to use lower risk percentages. Be careful not to boost your risk too much after you have grown more familiar with the method you are utilizing.

 

👉 The purpose of trading is to either earn a profit or keep enough money in your account to make the next deal, even if you lose a lot of money in the process.

 

✅ Use a Demo Account

👉 Using a demo account, you can obtain a sense of how the forex market operates by simulating ‘real’ trading as precisely as possible. With a demo account, you do not have to worry about losing any real money. This allows you to gain confidence in your trading skills without any financial risk.

 

✅ Customize Your Contracts

👉 In trading, there are no limits to the number of methods that can be used. Some trading systems require you to set a fixed stop loss and profit objective for each transaction, while others are more ad hoc.

 

👉 Customizing your position sizes is an easy approach to ensure that the amount of money you are willing to risk on each transaction is as near as possible.

 

✅ Develop a solid trading strategy

👉 By serving as a guide for your trading decisions, a trading strategy may make the process of trading foreign exchange a little bit smoother. The forex market may be a tumultuous place, and it might help you keep your cool. What, when, why, and how much to trade are some of the issues that this strategy aims to address.

 

✅ Determine Your Market Timing

👉 There may be no greater disappointment in trading than losing out on a lucrative chance because you were not there when it came. The 24-hour-a-day nature of the forex market means that this issue arises often, especially when trading lower period charts.

 

👉 The use of trailing stop orders may help you keep an eye on your risk even when you are not seated at a computer.

 

✅ Stay updated on the latest News

👉 Trying to forecast the price fluctuations of currency pairings is challenging since there are so many variables at play. Monitor central bank policies and statements as well as political and market sentiment to avoid being surprised.

An Overview of the Forex Forwards and Futures Markets

👉 A forward contract can be described as a private agreement that is made by two participants in the OTC markets to purchase a currency at a specified future date and price. A futures contract can be defined as a standardized agreement that is made between two market participants to exchange currencies at a defined price and date in the future.

 

👉 Futures are traded on exchanges, not over the counter. Trading in the forwards market is done between two parties that have agreed on the terms of their agreement. Public commodity markets like the Chicago Mercantile Exchange (CME) allow the buying and sale of futures contracts with a predetermined size and settlement date.

 

👉 Both forms of contracts are legally binding and are normally paid in cash at the underlying exchange upon expiration, but contracts may sometimes be purchased and sold before expiration. Currency forwards and futures markets may provide risk mitigation for currency traders.

 

👉 Typically, large multinational organizations utilize these markets to protect against potential currency swings, although speculators also participate.

An In-Depth Look at the Kenya Forex Spot Market

👉 The Forex Spot Market is the most widely used method of transferring currency between organizations, companies, and people today. The popularity of the spot market has been boosted further by advancements in information and communication technology (ICTs), which have enabled widespread electronic trading and a corresponding increase in the number of forex brokers.

 

👉 These new platforms enabled a broader audience to participate in foreign currency trading. When most individuals discuss forex trading nowadays, they are referring to the spot market.

 

👉 The spot market is where currencies are traded and acquired at the current market price. This price is influenced by a variety of variables, including supply and demand, current interest rates, economic performance, attitude toward current domestic and international political landscapes, and speculation on the given currency relative to others.

 

👉 In the spot market, a transaction occurs when two parties agree on a price and then undertake a bilateral transaction in which they exchange various currencies in cash at the settlement. Although the market is popularly believed to operate in the present, these spot transactions often take two days to settle.

Which Forex Brokers in Kenya offer the Most Currency Pairs

👉 CMC Markets offers over 330 forex pairs spread across:

➡️️​ Major Pairs such as AUD/USD, EUR/GBP, EUR/USD, GBP/USD, USD, JPY, USD/CAD, GBP/JPY

➡️️​ Minor Pairs include AUD/GBP, EUR/AUD, AUD/NZD, and others.

➡️️​ Exotic Pairs include USD/CNH, EUR/TRY, USD/MXN, USD/NOK, and more.

➡️️​ Forex Indices including CMC NZD Index, CMC JPY Index, CMC CAD Index, CMC AUD Index, CMC GBP Index, CMC EUR Index, CMC USD Index.

What is the Role of a Forex Broker?

👉 Brokers are classified into four categories: stockbrokers, Forex brokers, full-service brokers, and discount brokers. While they all serve as a conduit between you and another party, they all work differently.

 

👉 Certain brokers specialize in ‘execution alone,’ while others execute, provide advice, and manage your account. A forex broker, also known as a retail forex broker, acts as your agent when it comes to buying and selling currencies.

 

👉 A forex broker’s benefits include 24-hour market access and the chance to speculate on currency pairings from across the globe. While forex brokers strive to keep their expenses low to remain competitive, you will still pay some fees while trading with them, including a spread.

 

👉 In the forex market, transactions are made in pairs, which means you must either purchase or sell the currency pair you want to trade – for example, EUR/USD.

How do Forex Brokers Make Money?

👉 Certain Forex brokers charge a fee per transaction, while others charge based on the gap between the bid and ask prices. Forex brokers earn money primarily by maintaining the spread or collecting a predetermined charge every round turn. Some brokers charge both the spread and commission charges, although this is becoming less typical as the industry becomes more commoditized.

 

👉 Regrettably, some less than conscientious Forex brokers have previously said that they provide commission-free transactions, but they often compensate for this by increasing the spread. Occasionally, the spread is stable; occasionally, it is changeable.

 

👉 In a variable spread liquidity pool, the spread is determined by the number of open orders. When a big announcement, such as the US Nonfarm Payroll Numbers, is made, the gap often widens. As a result, in a turbulent market, you may find yourself paying a higher spread than anticipated.

 

👉 This is the primary benefit of a fixed spread since you will always know how much you will be paid to assist in buying and selling.

 

👉 Certain Forex brokers will charge an additional fee for “bells and whistles” such as customer service and education. For instance, some brokers will provide signals, while others will provide in-depth analyses. In addition, other brokers can provide exclusive instructional sessions and webinars to those willing to pay a premium or have a larger account balance.

Ask and Bid Price in Forex Trading

👉 The bid-ask spread (or buy-sell spread colloquially) can be described simply as the difference between the price at which a forex trading broker will purchase and sell a currency. However, in the retail market, the spread, or gap between the bid and ask prices for a currency, can be substantial and can also vary dramatically across brokers.

The Spread and Pips in Forex Trading

👉 Every time you buy or sell a currency pair, you pay a small fee known as the spread. The spread or the bid/ask spread, is the difference between the purchase and sell prices for a currency pair when you look at the price stated.

 

👉 Pips are the smallest price fluctuations in a currency pair, and they gauge any change in the fourth decimal place of a forex pair, or the second smallest when trading pairings listed in JPY. In addition to the spread, the amount of your transaction will have an impact on your overall cost.

 

👉 Spreads may be broad (high) or narrow (low) — the more pips calculated above, the larger the spread. Traders often prefer narrower spreads since they make the deal more economical.

 

👉 Spreads tend to be very wide in a highly volatile market with little liquidity, and vice versa. The spread in forex fluctuates in response to variations in the spread between the purchase and sell prices of a currency pair. This is referred to as a variable spread, which is the inverse of a fixed spread. You will constantly deal with a changeable spread while trading forex.

 

👉 The currency spread may widen in response to a significant news release or other events that increase market volatility. One disadvantage of a variable spread is that if the gap widens enough, your holdings may be liquidated, or you may face a margin call.

A Quick Crash-Course on Day Trading

👉 Forex day trading is one of the most popular short-term trading methods that focus on the simultaneous purchase and sale of currency pairs. Instead of keeping overnight positions, traders typically execute a few forex deals every day and close them out after the trading day.

 

👉 Because the price changes of liquid currency pairings may provide several chances for day traders, they will often seek extremely liquid and volatile currency pairs. Popular Day Trading Strategies include:

➡️️​ Forex News Trading

➡️️​ Trend Trading

➡️️​ Momentum Trading

➡️️​ Breakouts

 

👉 The best technical indicators that are used with day trading are:

➡️️​ Fibonacci retracements

➡️️​ Stochastic Oscillators

➡️️​ Simple Moving Averages or SMA

➡️️​ Bollinger Bands

➡️️​ Relative Strength Index (RSI)

An Overview of Swing Trading Strategies

👉 Swing trading is a trading strategy that focuses on profiting from tiny price movements within a larger trend. It is based on the premise that price behaviour is seldom linear; rather, the tension between bulls and bears causes it to fluctuate continually, allowing swing traders to see these swings as profit possibilities.

 

👉 Swing trading, by concentrating on the moments at which momentum changes direction, facilitates profit-taking over a shorter time than conventional investment. And, like day traders, swing traders seek profits from both positive and negative movements.

 

👉 While day-trading rules dictate that all positions must be closed after the day, swing trading tactics are not constrained by this rule. Swing traders will hold trades for the duration of momentum in the market, something that might take as little as a few minutes or as long as a few days. In addition, swing traders will be on the lookout for two kinds of swings:

➡️️​ Swing highs – When a market reaches a high point before backtracking, a short trade might be made.

➡️️​ Swing Lows – When the market enters a dip and bounces back, offering an ideal trading opportunity.

 

👉 To maximize profit, Kenyan traders will want to initiate a short position at a high and seek to end it at a lower one. Similarly, a long position that was initiated at a low point should be exited at a high point. The most common technical indicators used by Kenyan retail traders with Swing Trading Strategies are:

➡️️​ Moving Averages

➡️️​ Relative Strength Index (RSI)

➡️️​ Ease of Movement

➡️️​ Volume Indicators

➡️️​ Stochastic Oscillators

Scalping in Forex Trading

👉 To achieve a succession of fast gains, forex traders utilize a day trading method known as forex scalping, which includes buying and selling currency pairs with just a short holding period. When trading forex, scalpers take advantage of the tiny price changes that occur often during the day to execute a high number of transactions.

 

👉 Short-term traders in the Forex market are called scalpers since they trade for just a few seconds or minutes at a time. Because of the high leverage used by forex scalpers, a little price fluctuation can result in either significant profits or losses.

 

👉 Automated and manual Forex scalping tactics exist. A trader using a manual method must sit in front of a computer screen, watch for signals, and then decide whether to buy or sell when they are received. When using an automated trading system, input parameters are utilized to inform the trading software what to do.

 

👉 After major data releases, such as the U.S. jobs report or interest rate announcements, scalping is an extremely popular trading strategy. Scalpers from around the world typically take advantage of these rapid price changes by entering and exiting trades fast after high-impact news releases.

What is the Base and Quote Currency in a Forex Pair?

👉 Currency pairings are a term used in the foreign exchange market to describe the unit values of currencies. The first currency in a currency pair quotation is the base currency, and the second currency in the quotation is the quote currency.

 

👉 A common currency pair is AAA/BBB, which consists of six letters and a dash. The base currency is AAA, while the quote currency is BBB.

 

👉 Foreign exchange trading necessitates regular currency exchange. Kenyan traders buy the base currency and sell the quoted currency when they buy a currency pair. When a Kenyan trader sells a currency pair, they get the quote currency in exchange for the sold base currency.

 

👉 Subsequently, the selling price of a currency pair is equal to the amount received in the quotation currency in exchange for one unit of the base currency.

What is meant by “Market Sentiment”?

👉 Investors’ general attitude toward a specific security or financial market is referred to as “market sentiment.” The market’s mood and psychology are reflected in the volume of trading and the price movement of the assets traded there.

 

👉 A bullish market is one where prices rise, whereas a bearish market is one where prices decrease. There are times when market sentiment, often known as “investor sentiment,” is not based on the fundamentals of the business.

 

👉 To benefit from short-term price swings, Kenyan day traders and technical analysts depend on market sentiment, which determines the technical indicators they employ.

 

👉 Contrarian investors, who want to trade against the existing consensus, also consider the overall market mood. Market mood can typically be described as either negative or optimistic by Kenyan investors.

 

👉 Bears rule the roost when stock prices fall and when the bulls get the upper hand, stock prices tend to rise. There is a strong correlation between stock market mood and fundamental value, but this is not always the case.

 

👉 Market sentiment is concerned with sentiments and emotions, while fundamental value is concerned with the profitability of a company. Finding companies that are overpriced or undervalued based on market mood is profitable for certain Kenyan investors.

 

👉 Indicators are used to gauge the market mood and identify the finest stocks for trading. The CBOE Volatility Index (VIX), the High-Low Index, the Bullish Percent Index (BPI), and moving averages are all popular measures of investor mood.

The Effects of Leverage in Forex Trading

👉 With leverage, Kenyan traders can borrow money from forex brokers to expand their investment portfolios in the foreign currency market. Because leverage involves borrowing from a broker to maximize one’s return on investment, it is effectively the borrowing of money As a result, traders have an increased chance of losing money.

 

👉 Forex trading’s success is partial because traders can easily choose the degree of risk that they are willing to accept with a smaller amount of cash thanks to leverage. However, this is where the double-edged sword comes into play since true leverage can both increase your earnings and decrease your losses.

 

👉 The more leverage you use on your money, the larger the danger you take. Keep in mind that this risk is not always associated with margin-based leverage, but it may have an impact if a trader is not diligent.

 

👉 If there are no trading costs involved, the leverage you use does not affect your success chances. The odds of winning 50% of the time and losing 50% of the time are almost equal if you make trades at random, without any special insight or ability, and try to take gains equal to your maximum stop loss.

 

👉 When it comes to making money, transaction expenses are a major obstacle. To put it another way, expenditures make it more likely that you will lose. This change in probabilities is negligible at most leverage levels.

 

👉 In contrast, if the margin backing your transaction is smaller than 10x to 20x your expenses, your likelihood of losing quickly increases. For this reason, there is a strong likelihood that you will be closed out of the position. Simply imagine that your supporting margin equals your transaction expenses on a deal, and you will get the point.

 

👉 Because of the transaction fees, you would be left with no supporting margin for your position when you made your trade. Regardless of your trading technique or the direction of the market, this would result in you being instantly and completely out of the market.

Forex Brokers in Kenya with Free VPS Hosting

👉 A forex VPS (virtual private server) serves as a persistent connection between your trading terminal and the larger trading network. For instance, when you use MT4 on your computer at home, you are connected to the regular trading network, which is where your transactions are completed.

 

👉 The best Forex Brokers in Kenya who offer Free VPS Hosting include:

➡️️​ XM

➡️️​ HotForex

➡️️​ FXTM

➡️️​ Exness

➡️️​ InstaForex

 

➡️️​ XM

Overall Rating

Min Deposit

USD 5 / 584 KES

Regulators

IFSC, CySec, ASIC

Trading Desk

Desktop MT4 and MT5, Mobile MT4 and MT5, XM mobile app, Web platform

Crypto

No

Total Pairs

57

Islamic Account

Yes

Trading Fees

No (Just spread) 

Account Activation Time

24 Hours

👉 Only Kenyan traders who maintain a minimum of $5,000 in equity will be considered eligible to request a VPS server from XM at any one moment. In addition, to maintain access to free at least five rounds of turn lots or 500 micro round turn lots must be traded each month by these traders.

 

👉 If Kenyan traders do not meet this criterion, they can expect a $28 monthly charge to continue using VPS, deducted from the trader’s MT4 or MT5 account on the first day of every month.

 

➡️️​ HotForex

Overall Rating

Min Deposit

USD 5 / 578 KES

Regulators

CySEC, FSC, FSCA

Trading Desk

MetaTrader 4 and MetaTrader 5

Crypto

No

Total Pairs

50+

Islamic Account

Yes

Trading Fees

Low

Account Activation Time

24 Hours

on HFM (Formerly Known as Hotforex)’s website

👉 Hot Forex requires a deposit of $200 or an equivalent in other currencies to have access to the free VPS. Obtaining a free Hot Forex VPS is possible, but there are certain restrictions based on your initial investment, trading account, and trading needs.

 

👉 With HotForex, a paid membership for the VPS comes with a monthly price of $30. With a $5,000 payment, you can get the Bronze VPS option for free. To get the free Silver VPS plan, you must deposit at least $8,000, while the free Gold VPS package requires at least $15,000.

 

➡️️​ FXTM

Overall Rating

Min Deposit

USD 10 / 1156 KES

Regulators

CySec, FSCA 

Trading Desk

MetaTrader 4 and MetaTrader 5

Crypto

Yes

Total Pairs

Islamic Account

No

Trading Fees

Low

Account Activation Time

24 Hours

👉 To use free VPS, you must deposit at least $10 in FXTM or an equal amount in another currency. In addition, Kenyan traders who use MT4 can use FXTM’s free VPS, which makes it easy to do market research and keep track of open positions.

 

👉 Charts on the site make it simple for traders to track the market’s price fluctuations. Over 30 technical indicators are available, allowing investors to spot market patterns and exit trades at any time.

 

➡️️​ Exness

Overall Rating

Min Deposit

USD 10 / 1156 KES

Regulators

CBCS, CySEC, FCA, FSA, FSC, FSCA

Trading Desk

MetaTrader 4 and MetaTrader 5

Crypto

Yes

Total Pairs

107

Islamic Account

Yes

Trading Fees

Low

Account Activation Time

24 Hours

on Exness’s website

👉 When Kenyan traders use Exness and they want to make use of free VPS hosting through the broker, they must deposit at least $500 into their trading account, or an equivalent in KES. In addition, the trader’s free margin must be above $100 during the time that they request free VPS.

 

👉 With Exness, Quotes and orders are delivered to a trading server promptly since VPS servers are situated inside the same data centre as the trading servers.

 

👉 Because it is always connected, VPS is unaffected by external variables like a bad connection. Regardless of the quality of your own internet connection, your order will be processed.

 

➡️️​ InstaForex

Overall Rating

Min Deposit

USD 1 / 116 KES

Regulators

CySEC, FSC

Trading Desk

Metatrader 4

Crypto

Yes

Total Pairs

4

Islamic Account

No

Trading Fees

Low

Account Activation Time

24 Hours

👉 At InstaForex, Kenyan traders merely need a deposit of $1, or an equivalent in KES, to gain access to VPS. However, it is only free if your equity at InstaForex is $1,000 or more. In addition, based on the account type, the monthly charge for forex VPS hosting ranges from $10 to $40.

 

👉 The MetaTrader 4 and MetaTrader 5 trading platforms, as well as a desktop, mobile, and WebTrader, are all supported by InstaForex when it comes to signing up for a forex VPS.

 

👉 This service provides a strong server for trade executions, and it comes with the most recent version of the MT4 platform installed right into your virtual machine.

MetaTrader 4 versus MetaTrader 5

4️⃣ MetaTrader 45️⃣ MetaTrader 5
MetaTrader 4 has a customizable interface that suits the needs of most Kenyan tradersSimilar interface layout with additional features, services, and advantages
Features 9 TimeframesFeatures 21 Timeframes
Four Pending Orders (buy stop, buy limit, sell limit, sell stop)Six Pending Orders (buy stop, buy limit, buy stop limit, sell stop, sell limit, sell stop limit)
Features MQL4 Programming LanguageFeatures MQL5 Programming Language
Allows HedgingAllows Hedging and Netting
Offers 30 Built-in Indicators, 2,000 Custom Indicators, 700 paid indicatorsOffers 38 Built-in Indicators, 44 Analytical Objects, Unlimited charts
Does not offer Market DepthOffers Market Depth
There is no Economic CalendarThere is an Economic Calendar included
WebTrader is available to Google Chrome, Mozilla Firefox, Apple Safari, Internet Explorer, Opera, Microsoft EdgeWebTrader is available to Google Chrome, Mozilla Firefox, Apple Safari, Internet Explorer, Opera, Microsoft Edge
The Desktop Terminal is compatible with Windows Vista/7/8 and Mac OSThe Desktop Terminal is compatible with Windows Vista/7/8 and Mac OS
The Mobile App is compatible with iOS and AndroidThe Mobile App is compatible with iOS and Android
Offers 3 Execution TypesOffers 4 Execution Types
Exchange trading is not allowedExchange trading is allowed
There are 1,024 SymbolsUnlimited Symbols
There are no Partial Order Filling PoliciesIncludes Partial Order Filling Policies
Order Fill Policy is Fill or KillOrder Fill Policy is Fill or Kill immediately or Cancel Return
Only offers Tables in ReportsOffers Charts (HTML5) and Tables on Reports
There is no Time & Sales Exchange DataTime & Sales Exchange Data is included
Log File ZIP compression is not offeredLog File ZIP compression is automatic
There are 31 Graphical ObjectsThere are 44 Graphical Objects
There is Single Threaded Strategy TesterThere is a Multi-Threaded Strategy Tester that is multi-currency and includes real ticks
There is a comprehensive email system, but attachments are not allowedThere is a comprehensive email system with attachments
No multilingual UnicodeMultilingual Unicode is included
There is no fund transfer offered between accountsFund transfer is allowed between accounts
There is no embedded MQL5 community chatThere is an embedded MQL5 community chat
Suited for: Beginners or those who want a simpler trading platform to trade forexSuited for: Kenyan traders who need access to versatile software and additional features

Frequently Asked Questions

 

Is Forex Trading in Kenya Profitable?

Yes, but it is an extremely risky activity and between 60% to 90% of retail traders lose more capital than they gain. There must be a balance between trying to earn profits and protecting your capital from loss.

 

What are the best Forex Trading Strategies in Kenya?

The Bollinger Band Strategy is one of the best forex trading strategies in Kenya.

 

How does Forex Trading work?

When Kenyan traders participate in the forex market, they are buying one currency while they simultaneously sell another. Kenyan traders can earn profits when they speculate on the direction in which the prices of a currency pair will go.

 

Is Forex Trading the same as gambling?

No, Forex trading is different from gambling. Unlike gambling, Forex trading does not have a “house.” On the market, your opponent is another trader who has their own interests.

 

When are the best Forex Trading Sessions in Kenya?

The best time to trade forex in Kenya is between 11 am and 5 pm. During this timeslot, the London and New York Sessions are the most active and they subsequently overlap one another, providing high volatility and liquidity to Kenyans.

 

What are the legalities of Forex Trading in Kenya?

In Kenya, online forex trading is permitted and involves contracts for difference (CFDs) on underlying foreign assets; the Capital Markets Authority (CMA) regulate it.

 

Do I pay taxes when I trade Forex in Kenya?

Yes, You must disclose your profits in Kenyan Shilling on your tax returns if they were made when you were within Kenya’s boundaries while you were trading on an offshore trading account.

In addition, Kenya’s current corporate tax rate is 30% for resident firms while taxes on non-resident corporations with a permanent establishment in Kenya are 37.5%.

 

Who are the Forex Brokers with CMA Regulation in Kenya?

The best, and only, forex and CFD brokers who have CMA regulation in Kenya are Pepperstone Markets Kenya Limited, FXPesa, Exinity, Scope Markets, HotForex, and Windsor Brokers.

 

What are the Best Forex Trading Platforms in Kenya?

The Best Forex Trading Platforms in Kenya are MetaTrader 4, MetaTrader 5, cTrader, DupliTrade, ZuluTrade, TradeStation, eToro, AvaOptions, AvaTradeGO, and several others.

 

Which Forex Brokers in Kenya accept MPesa deposits?

The best forex brokers who accept MPesa are CM Trading, Pepperstone, Scope Markets, and FXPesa.

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