How to safely trade forex in Kenya. Image: Supplied

How to safely trade forex in Kenya

Forex trading has exploded in Kenya in recent years, as the country has flourished into a regional IT hub and a leader in online trading in Africa.


How to safely trade forex in Kenya. Image: Supplied

The Forex market is the world’s largest decentralised financial market, with billions of dollars worth of currencies being traded on a daily basis. Nearly all of this trading is done online with the use of Forex brokers, who provide clients with the necessary trading software and support. 

There are more Forex brokers in Kenya than ever before, providing Kenyan traders with access to a wealth of resources. 

That said, it is important to conduct Forex trading within secure online parameters to avoid incurring unnecessary losses, and here we explore the requirements for safe trading in Kenya. 

1. Ensure that you sign up with a CMA-regulated broker

Under the Capital Markets Act, Cap 485A, the Capital Markets Authority (CMA) was established in 1989 as a legislative institution with the primary mission of regulating and developing orderly, fair, and efficient capital markets in Kenya.

The CMA also operates with the mandate of promoting market integrity and investor trust, and so ensures that brokers operating under its oversight adhere to transparent and open operations. 

As such, it is essential that Kenyan traders sign up with a Forex broker that is regulated by the CMA to ensure that they operate in a secure environment, have due recourse for any disputes, and have their funds protected under Kenyan financial law. 

2. Open a demo account first

A demo account is offered by most brokers. Demo accounts are similar to real trading accounts, allowing you to trade and learn about the intricacies of trading without risking any of your own funds. 

You can use the virtual funds in your trial account to practise your trading techniques and get experience in a genuine market environment.

You should only open a live account with real Kenyan shillings when you have earned sufficient experience and have been profitable on the demo for a period of several months.

3. Take time to study the Forex markets

Most successful Kenyan Forex traders today preach the vital importance of Forex education. Before you can hope to trade safely a successfully, you will need to study the various aspects of the Forex markets in order to have a greater command of your trading approach. 

This includes becoming familiar with Forex terminology, understanding the fundamental market movements that drive currency changes, and learning how to use technical tools to conduct your own analysis.  

4. Develop a Forex trading strategy

While all Forex trading strategies are broadly divided into fundamental and technical analysis, there are numerous ways in which these analytical techniques are used in order to predict price changes in the currency markets. 

A Forex trading strategy not only encompasses an analytical approach but also sets out your own personal investment approach when trading the Forex markets. 

Having a strategy will allow Kenyan traders to proceed in a risk-adjusted manner and ensure that they gain steady profits over time.