12 Best Day Trading Strategies in Kenya
The 12 Best Day Trading Strategies in Kenya revealed. We tested and verified the best day trading strategies for Kenyan Traders.
This is a complete list of day trading strategies in Kenya.
In this in-depth guide you’ll learn:
- What is a day trading strategy?
- Which brokers offer day trading strategies to Kenyan traders?
- Our six recommended day trading strategies for Kenyan Beginner Traders?
- How to compare day trading strategies against each other?
- What are forex day trading strategy patterns in Kenya?
- A cheat sheet to day trading strategies.
- What are day trading pattern rules?
- Which broker offers a low minimum deposit on Kenyan Shilling Accounts?
- Which brokers offer a signup bonus for first-time traders?
And lots more…
So if you’re ready to go “all in” with the best day trading strategies for Kenyans…
Let’s dive right in…
12 Best Day Trading Strategies in Kenya (Updated 2022)
What is a day trading strategy?
👉 Day trading is the purchasing and selling (or buying and selling) of the same security inside the same trading session to make modest, frequent gains.
👉 Some day traders are discretionary traders, which means they pick when to start and cancel deals depending on their intuition and current market circumstances. Others are system traders who place trades according to a preset set of rules.
👉 System traders often automate their trading tactics, enabling their computers to search for, initiate, manage, and close transactions.
1. Breakout Day Trading Strategies
👉 To use a breakout strategy, the price must first break through a predetermined level on your chart, with an increase in volume.
👉 After an asset or security breaks above resistance, the breakout trader will open a long position in it. Alternatively, after the stock price drops below the previous level of support, you may initiate a short sale.
👉 When a security or asset trades above the predetermined price level, it is said to have “broken out,” signalling a rise in volatility and a price trend in the direction of the breakout.
👉 Identifying a suitable trading instrument is essential. You should think about the asset’s support and resistance levels while you do this. The greater the frequency with which prices have returned to certain levels, the more significant they are.
👉 When Kenyans are determining their Entry Points, Bearish positions are warranted if prices are projected to close above resistance levels, but if prices are about to close below a support level, a bullish stance is necessary.
👉 In terms of Exit Points, Kenyans can determine a realistic price goal by looking at the asset’s historical performance.
👉 The use of chart patterns will further improve the precision of this method. To set a goal, just take the moving average of the prices over the last several periods.
👉 Traders could set their sights on this level if the average range of recent price fluctuations has been around three points. Once the trader has achieved the goal, they can exit the position and enjoy the profits that they have made.
2. Scalping Strategies
👉 Scalping is a common tactic used by many players. It is often used in the foreign exchange market since it seeks to profit from even the smallest price fluctuations.
👉 Quantity is the main motivator, and once the transaction starts making money, traders are urged to exit the position. This kind of trading is thrilling and fast-paced, but it also carries some inherent risks.
👉 There is a low risk-to-reward ratio, therefore traders need a high trade probability to make up the difference. In addition, if Kenyan traders want to use this strategy, they should make sure that their broker allows it.
👉 Some key metrics to look out for include risky instruments, enticing liquidity, and opportune moments. In addition, Kenyan day traders must remember that losing deals must be closed immediately regardless of the market’s state.
3. News Trading
👉 Economic news and statistics are a primary source of market volatility and significant price movements throughout every trading session. This implies that news trading offers consistent chances to trade, but with inherent dangers.
👉 Trading in the news is an event-driven technique that differs in certain respects from traditional technical and fundamental approaches to the market.
👉 The news could be broken down into two categories namely regular and unexpected events. General elections, quarterly profit reports, and announcements of economic data like interest rates and employment figures can typically be found on any economic calendar.
👉 Financial calendars, news feeds, and even social media platforms can also be used to track upcoming events.
👉 Most news trading methods revolve around anticipating and reacting to scheduled events, and traders can effectively reduce their exposure to risk by tracking when such events are set to occur.
👉 However, investors and traders could be taken aback by occasional news since it relates to mostly unanticipated occurrences, and the extent of their effects and the precise timing of their onset remain unknown.
👉 To start trading the news, Kenyans can follow these steps:
➡️ Find a suitable broker and register an account with them.
➡️ Keep an Eye on the Trade-Affected Event — News trading is only useful if you are aware of the specific types of news that affect the asset you desire to trade. The Economic Calendar is a great tool for tracking upcoming news events and gauging their potential influence on underlying assets.
➡️ Find the Most Profitable Trading Window – The goal of news trading is to always be ahead of the curve. That is, you are trading according to the subsequent market movement after the news has been announced. Your trading options include before, during, and after the announcement.
➡️ Utilize Technical Analysis – News trading may be very profitable if it takes advantage of technical analysis. You should always keep an eye on the essential technical aspects of the underlying asset during news trading, regardless of the trading opportunity you are trying to take advantage of.
👉 While news trading is a day trading strategy, it can be broken down further into news trading-specific strategies as follows:
➡️ Interest Rates Trading
➡️ Employment Data Trading
➡️ Stock Market News Trading
➡️ Forex News Trading
➡️ Commodities News Trading
➡️ Bonds News Trading
➡️ Cryptocurrency News Trading, and more
4. Ichimoku Kinko Hyo Indicator Day Trading Strategy
👉 Using the Ichimoku Kinko Hyo, also known as an equilibrium chart, Kenyans can identify ideal trading opportunities.
👉 Although it is still new to the market, its popularity is quickly growing among both new and seasoned traders. The Ichimoku provides more data points, which result in more trustworthy price movement, and is hence widely used in futures and equities trading.
👉 A trader can get the most complete picture possible with the help of this program, which provides a variety of tests and combines three indicators into a single chart.
👉 Ichimoku is useful for determining the intensity and direction of a trend. In addition, it facilitates the establishment of degrees of support and resistance. The most essential aspect of Ichimoku is that it may be utilized to create a reliable trading method.
👉 Following are the parts that make up the Ichimoku Kinko Hyo:
➡️ Tenkan Sen: Determined by dividing the maximum high by the minimum low. The Tenkan is a nine-period moving average.
➡️ The Kijun Sen is determined by taking the difference between the two extremes and dividing it by two. Although both methods provide comparable results, the Kijun extends its analysis back to 26 periods.
➡️ Senkou Span A is Tenkan Sen + Kijun Sen / 2, and the result is then extrapolated to a point 26 periods in the future from the present price movement.
➡️ Senkou Span B is the difference between the maximum and minimum values, expressed as a percentage. This analysis is performed on 52 historical time intervals and projected 26 intervals into the future.
👉 The Chikou Span completes the Ichimoku, and it is a 26-period lagging indicator of price activity that is generated using the most recent closing price as a proxy for market mood.
👉 By displaying the prevalent trend to the present price momentum, this characteristic infers the mood of the market.
👉 When sellers have control of the market, the Chikou span will be below the price trend, while buyers will see the reverse. The spread rises and floats over the price action when a pair continues to be popular or is purchased.
👉 To implement this strategy while trading Forex, Kenyans must know the basic inputs, which are:
➡️ Timeframe – Daily
➡️ Currency Pairs – Major Pairs
➡️ Indicators – Default Ichimoku
➡️ Stochastic Oscillator with these settings – %K Period of 5, %D Period of 3, Slowing = 3
👉 The rules that Kenyans must follow to open a long (buy) position are as follows:
➡️ Traders must wait until the price breaks above the blue Kijun Sen line. When this happens, the price will close above the Ichimoku elements and simultaneously, the Stochastic Oscillator will move into the overbought zone.
➡️ Traders can enter a long position at the opening price of the next candlestick and place a Stop-Loss order 30 pips below their entry. After a gain of 60 to 80 pips, traders can move their Stop-Loss closer to their entry.
➡️ Traders can then place a Take Profit which is twice as big as the distance between their entry and their Stop-Loss order.
👉 If Kenyan traders want to enter a short or sell position in the forex market on a major currency pair, such as EUR/USD, they can follow these rules.
➡️ For a sell position, the price must be below the cloud and the blue Kijun Sen line. Once the price is in this area, traders can consul the Stochastic Oscillator to verify that the lines cross in the oversold area.
➡️ Traders can enter a sell position at the opening price of the next candlestick and move their initial Stop-Loss order 30 pips above where they entered the trade. The Stop-Loss order can then be moved closer to the entry once traders have noticed a 60 to 80 pips fall in the price.
➡️ In addition, traders can place a Take Profit that is twice as large as the distance between their entry and the Stop-Loss order.
5. Momentum Trading
👉 This approach is common among newbie trading techniques since it focuses on taking advantage of news sources and spotting significant trending movements supported by strong volume.
👉 If you look hard enough, you can find at least one stock that rises 20-30% every single day. Hold on until a reversal signal appears, and then sell.
As an alternative, you could “fade” the price decline. In this scenario, your price objective is reached as soon as volume declines.
👉 If executed properly, this method is both easy and fruitful. However, you need to keep track of impending press releases and financial reports. The difference in your day’s earnings might be as little as a few seconds each deal.
6. Market Opening Gap Trading Strategy
👉 Technical experts feel that most smaller opening gaps are filled, however bigger breakout gaps suggest the market will continue in the same direction.
👉 Therefore, you could search for opening price discrepancies in exchange-traded marketplaces that surpass certain percentage requirements, such as 5%.
👉 If you trade on the stock market, pre-market stock scanning tools may often be used swiftly for this purpose.
👉 Once you have identified a stock that is moving significantly at the opening of its stock market, you can search for a relevant news item that might have prompted the movement to ensure that it makes fundamental sense.
👉 The last step is to set a stop loss below the support level and enter the market at the right time. The criteria you use to choose these elements should be as objective as possible.
👉 For instance, if you wanted to use a market opening gap strategy, you might keep an eye on the pre-market high point and then, if a pullback occurred, set a limit order to purchase at that level.
👉 Optionally, Kenyans can examine the opening range for the first minute of trade, after which they can submit a buy order at the peak of the first 1-minute candle while placing a stop loss order at the bottom of the same candle.
7. Reversal Trading
👉 Reverse trading is practised throughout the globe, despite being highly controversial and risky for newcomers. It is categorized as a mean reversion approach, trend trading, and pull-back trending.
👉 To trade in this manner is to go against all common sense since you will be attempting to go against the trend. You need the ability to recognize potential corrections and estimate their magnitude. You need extensive industry knowledge and expertise to do this successfully.
👉 Since it emphasizes buying and selling the daily low and high pullbacks/reverse, the ‘daily pivot’ approach stands out as an unusual instance of reverse trading.
8. End-of-Day Trading Strategy
👉 Traders that use the “end of day” method make their trades just before market closing. When it seems like the price is about to ‘settle,’ or close for the day, the day’s last traders become extremely active in the market.
👉 This tactic calls for a review of the day’s price action considering the previous day’s trends. Traders at the close of the day should use the price action to make educated guesses regarding future price movement and to choose which indicators to use.
👉 The time investment is lower compared to other trading styles while using this method. This is because studying charts is only necessary during market opening and closing.
👉 In addition, this strategy is suitable for most traders. This is because trading towards the end of the day might be an excellent introduction to the market since it eliminates the need to open many positions.
👉 This strategy is also not as time-consuming and regardless of the time of day, traders can carry out chart analysis and market orders, making this strategy potentially far more efficient than other day trading strategies.
👉 However, there is an overnight risk associated with this method for Kenyan traders who extend this strategy to more than day trading.
👉 To mitigate this, a stop loss order might help you sleep better at night knowing that your overnight position is protected from further decline should the market turn against you.
👉 To further reduce risk, guaranteed stop-loss protections are recommended, and Kenyans who want to day trade must ensure that their broker offers this risk management tool.
9. Money Flows Strategy
👉 When an asset’s volume and price (as opposed to just the price) are considered, the money flow indicator indicates whether the asset is being oversold or overbought.
👉 The system determines the direction of cash flow by comparing the number of deals from the previous day with those of the current day.
👉 Overbought circumstances are indicated by a reading of 80 or above, prompting the trader to consider selling. As opposed to that, a reading of 20 or lower implies oversold market conditions, which is a buy signal.
10. Trend Trading
👉 When a trader employs this tactic, they have identified a trend using technical analysis and will only trade in the direction of that trend. Traders who focus on trends do not have a predetermined opinion about the market’s future movements.
👉 Having a reliable method to identify and track trends is essential for profitable trend trading. However, since the tide turns swiftly, it is essential to maintain vigilance and flexibility.
👉 Traders in a trending market should be mindful of the potential dangers of a market reversal and the benefits of using a trailing stop-loss order to protect themselves. Markets including stocks, bonds, currencies, and commodities may each be analysed using a unique set of trend-following techniques.
👉 To succeed at “riding the trend,” trend traders must practice patience. Trend traders should be able to maintain self-control and stick to their trading plan if they have faith in it.
👉 However, Kenyans must recognize when a system has failed. When trading in a trend, Kenyans must limit their losses but allow their winnings to run when the market undergoes a fundamental shift.
11. Using Pivot Points as part of a strategy
👉 A pivot point method for day trading could be phenomenal for detecting and acting upon crucial support and/or resistance levels, and it is particularly important in the foreign exchange market.
👉 In addition, range-bound traders may utilize pivot points to identify entry opportunities, and trend and breakout traders can use pivot points to highlight important levels that must be broken for a price movement to be considered a breakout.
👉 A pivot point can simply be defined as a “point of rotation,” and it is calculated using the previous day’s high and low prices in addition to the security’s closing price. When calculating a pivot point utilizing pricing data from a noticeably short timeframe, accuracy is often compromised.
👉 Kenyans who want to use this strategy can calculate a pivot point as follows:
➡️ Central Pivot Point (P) = (High + Low + Closing Price) divided by 3.
👉 Next, traders can determine the support and resistance levels using this pivot point by using these formulas:
➡️ First Resistance or R1 is (2 x P) – Low and First Support or S1 is (2 x P) – High
➡️ Second Resistance or R2 is P + (R1 – S1) and Second Support or S2 is P – (R1 – S1)
👉 When used in the FX market, for instance, the session’s trading range is often between the pivot point and the initial support and resistance levels, attributable to the fact that many traders trade in this range.
👉 Notably, this is one of the systems and approaches that can also be used to trade indices. For instance, it could also aid in the development of an efficient day trading strategy for other financial markets.
12. Mean Reversion
👉 In the hypothesis of “mean reversion,” prices and other valuation metrics like price-to-earnings (P/E) ratios tend to revert to their long-term averages over time.
👉 The method uses technical analysis techniques like moving averages to identify assets whose recent performance has diverged from their historical average. When prices eventually revert to their historical trend, traders who rely on mean reversion will profit.
How Kenyans can start Day Trading
👉 During a day of day trading, a trader will purchase and sell a variety of financial products. To take advantage of minute price fluctuations, “day traders” often purchase and sell many different assets during a single trading day.
👉 Despite seeming overly complicated, Kenyans can simply get started with day trading by following the guidelines outlined below.
Decide how you want to Day Trade by choosing a suitable Financial Market
👉 To become a successful day trader, you must first settle on a product to trade. The lack of ownership requirements for the underlying asset makes derivatives like CFDs attractive for day trading.
👉 In addition, with CFDs, speculating on the fluctuations of market prices is now a far less time-consuming task.
Create a Solid Day Trading Plan
👉 To succeed in day trading, you must first define your goals clearly and establish reasonable expectations for yourself. Day trading may have a high learning curve, so do not get your hopes up if you think you will be rolling in cash right away.
👉 You should also think about whether you will rely on fundamental or technical analysis when making your entry and exit decisions. If you are a fundamentalist, you will base your day trades on news events, corporate reports, and releases of macroeconomic statistics.
👉 Technical analysis, on the other hand, gives more weight to things like chart patterns, historical data, and technical indicators.
Learn How to Mitigate Day Trading Risks
👉 Developing a plan for dealing with potential losses is an important part of being ready to trade. Traders may reduce the likelihood of loss by implementing preventative measures against catastrophic events.
👉 Stops and limits, among other risk management measures, are essential to each trader’s arsenal. One of the most common pieces of advice given to aspiring traders is to terminate lost trades as soon as possible while letting winning transactions ride.
👉 A trader need not be right all the time, but they do need to be able to admit when they are wrong and adjust their strategy accordingly to maximize their profits and minimize their losses.
👉 Whether a trader should prioritize a high win/loss ratio or pay more attention to the risk-to-reward ratio is a subject of ongoing debate. Day traders that are consistently profitable anticipate making at least twice as much money as they risk, despite their poor win rates (typically around 40%).
👉 This is an extremely personal decision to make, although it is normal to make a mistake and absorb a little loss, continuing to be incorrect and suffering a large loss is one of the proven ways to give up on a career in short-term trading.
Start Trading and Monitor Your Positions
👉 After you have solidified your trading strategy, you are ready to enter the market. You may choose to open long and short bets inside the same trading day. You would ‘purchase’ an asset if you anticipate a price increase in a certain market, and you would ‘sell’ the item if you anticipate a price decrease.
👉 When you are a day trader, you are constantly entering and closing transactions, and you must stay abreast of any breaking news or market occurrences that can affect the values of the markets you are watching.
👉 Any open deals should be finished before the end of the day and keeping a trading journal of all the positions you open and shut during the day is one of the most crucial practices at this time, as it allows you to keep track of both your successful and failed transactions.
The Best Brokers in Kenya
👉 In this article, we have listed the best brokers that support day trading in Kenya. We have further identified the brokers that offer additional services and solutions to Kenyan traders.
Best MetaTrader 4 / MT4 Broker in Kenya
👉 Overall, Admirals is the best MT4 Broker in Kenya. Admirals offers two retail accounts that are specifically operated through MetaTrader 4. Kenyans can access the Trade.MT4 and Zero.MT4 through Admirals and expect spreads from 0.0 pips to 0.5 pips.
Best MetaTrader 5 / MT5 Broker in Kenya
570 KES or an equivalent to $5
Account Activation Time
👉 Overall, Alpari is the best MetaTrader 5 Broker in Kenya. Alpari has over 2 million traders from around the world and offers more than 250 tradable instruments through MT4 and MT5. With MT5 Kenyans can easily use MQL5 to create their own Expert Advisors for day trading strategies.
Best Broker for beginner day traders in Kenya
👉 Overall, IG is the Best Broker for beginner day traders in Kenya. IG is one of the most well-known brokers around the world because of its superior record of accomplishment. IG accepts and accommodates beginners, offering a range of webinars and a dedicated IG Academy.
👉 Kenyans can also access the extensive guides and comprehensive glossary to guide them through the process involved with learning about day trading.
Best Low Minimum Deposit Broker in Kenya
👉 FOREX.com offers competitive spreads from 0.3 pips and Kenyans can register a trading account with a deposit of 11,500 KES.
Best ECN Broker in Kenya
👉 Overall, IC Markets is the Best ECN Broker in Kenya. IC Markets is renowned as an ECN broker in the forex and CFD industry. Kenyans can expect zero-pip spreads on the cTrader and Raw Spread accounts.
👉 While the Standard Account has low spreads of 0.6 pips, there are no commissions charged and trade execution is lightning-fast.
Best Islamic / Swap-Free Broker in Kenya
USD 1 / 116 KES
Account Activation Time
👉 Overall, SuperForex is the best Islamic / Swap-Free Broker in Kenya. SuperForex offers unlimited trading options across 400 financial instruments and 11 retail trading accounts. More notably, SuperForex offers Muslim traders a choice between three Swap-Free trading accounts.
Best Day Trading App in Kenya
USD 50 / 5780 KES
Account Activation Time
* Etoro has lowered the amount of the minimum FTD to $ 50 for the following countries: Germany, Austria, Netherlands, Norway, UK, Ireland, Spain, Italy, Sweden, Switzerland.
👉 Overall, eToro is the best day trading app in Kenya. eToro only offers proprietary trading software for Kenyans to use. The eToro app provides Kenyans with the same interface and functions as the desktop site. Kenyans can easily manage their portfolio, track markets, and copy trade.
Best Kenyan Shilling Trading Account Broker in Kenya
👉 Overall, Exness is the best Kenyan Shilling trading account Broker in Kenya. Exness offers a multilingual website that caters to all types of traders, and Kenyans can easily register a KES-denominated account with Exness.
👉 While Kenyans have the freedom to register most trading accounts with KES the base currency, the Standard Cent Account can only be registered using USC, EUC, GBC, CHC, AUC, or CAC.
Best Lowest Spread Broker in Kenya
👉 XM is one of the most affordable brokers and offers Kenyans a Micro Account with 1 pip spread on EUR/USD and zero commission charges.
Best Nasdaq 100 Broker in Kenya
👉 Overall, HF Markets is the best Nasdaq 100 Broker in Kenya. HF Markets is a CMA-regulated broker with a transparent and safe trading environment. Kenyans can choose from over 1,000 tradable instruments including NASDAQ 100.
👉 When trading stock indices, traders can expect spreads from 1 pip depending on their trading account, commissions from $3, and leverage up to 1:200.
Best Volatility 75 / VIX 75 Broker in Kenya
USD 100 / 11560 KES
MetaTrader 4, MetaTrader 5, Ava Social, Ava Protect, Trading Central
Account Activation Time
👉 Overall, AvaTrade is the best Volatility 75 / VIX 75 Broker in Kenya. AvaTrade is one of the most trusted brokers in Kenya that caters for both beginners and professionals despite their trading strategy.
Best NDD Broker in Kenya
👉 While Markets.com does not publish its liquidity providers, Kenyans can expect that orders will be filled quickly, with minimal slippage and requotes.
Best STP Broker in Kenya
👉 Overall, Tickmill is the best STP Broker in Kenya. Tickmill is a popular STP broker that provides access to VIP and Pro accounts with competitive spreads from 0.0 pips. Tickmill is a MetaTrader-only broker that offers fast executions which are ideal for day traders in Kenya.
Best Sign-up Bonus Broker in Kenya
👉 Overall, RoboForex is the best sign-up bonus Broker in Kenya. RoboForex offers newly registered Kenyan traders several promotions, including a sign-up bonus, classic bonus, and up to 10% back on trading accounts.
👉 When day traders take the practice seriously and prepare for it, they increase their chances of success. Day traders need to be very disciplined, attentive, impartial and have their emotions under control.
👉 Conquering the world of day trading is no easy feat, and time, effort, and self-control are needed. Although most people who attempt it end up losing money, the information in this article can be used for Kenyans to familiarize themselves with the day trading strategies available.
Is day trading profitable?
Day trading can be profitable, but it can also be extremely stressful. In addition, it carries more risk than most trading strategies because of how fast-paced it is in an extremely volatile market.
Why do most day traders fail?
In many cases, traders’ failure may be attributed to their lack of seriousness about the industry. Most new traders look for effortless ways to make money and do not put much thought into their strategy. The truth is that some novice traders risk their capital without recognizing it.
Is day trading like gambling?
When compared to long-term investment, some so-called “financial experts” see day trading as closer to gambling.
Day trading, in contrast to investing, is making a profit from little and big price fluctuations that occur during the same trading day, using technical analysis and specific indicators to create a trading plan, which sets it apart from gambling.
How many hours does a day trader work?
Because of the short timeframes in which day traders trade, they typically work between two and five hours a day. However, day traders typically start practising their strategies months before they make live trades, and the duration of practice can be longer.
Is day trading a viable career?
Many individuals find day trading to be an appealing profession because of the high earning potential and adaptability it provides.
If you are familiar with the stock market and would want to engage in more active and volatile trades, day trading may be the path for you.