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6 Steps to Start Online Trading in Kenya for Beginners – HapaKenya

Online Trading has been growing rapidly since the start of 2000. This has been made possible by the improvements in technologies behind the trading & investing ecosystem. Most exchanges, capital markets and commodities markets have gone online through the use of centralized electronic systems.


Online Trading has been growing rapidly since the start of 2000. This has been made possible by the improvements in technologies behind the trading & investing ecosystem. Most exchanges, capital markets and commodities markets have gone online through the use of centralized electronic systems. 

Many low-cost new brokerages have opened in the past decade to offer low cost services with fast execution with the help of online trading tools & technologies like Bloomberg Terminal, Refinitiv Electronic Trading, MetaTrader, cTrader, web trader & mobile apps; large liquidity providers like Citi, UBS, Barclays etc. have made it easier to get liquidity for any instrument from Stocks, indices, Forex to Cryptocurrencies by these brokerages.

Online Trading has got a lot of attention from younger population namely millennials who are savvy about investing and trading. Millennials today believe taking things in their own hand by educating themselves of the trading basics and investing online. 

Trading in Bitcoin & Forex has seen a lot of demand and they have become very popular in Kenya, Rest of Africa & also around the world – such that FX is highly regulated & Cryptos trading is being considered by governments around the world for legalization. 

While stock trading is also seen picking up among millennials globally with the availability of global stocks, IPOs through online trading apps like: FXPesa, Etoro, Plus500, Hotforex, XM, IG as these new investors are keen on investing in new age tech stocks like Amazon, Apple, Google, Facebook.

We look at the basic steps you would need to get started with online trading in Kenya.

1) Research the Available Instruments & Investment/Trading Options

The first step of online trading involves research and analysis of the financial trading instruments and investment options that are available for online traders in Kenya. 

While most of the investment instruments including mutual funds, indices, commodities like oil, precious metals like gold, stocks, forex/currency trading, cryptocurrencies are now available online; you need to check which one suits your long-term goals including returns and experience level before investing in them. You must also assess your risk level involved in trading of that instrument before investing in it. 

Like Mutual Funds is most suited for beginner investors and requires lower experience & involves least risk when compared to other investments.   

On the other hand, Stocks, Indices, Commodities, Forex, Cryptos require extensive market research & understanding of market terminology and knowledge of tools required in trading & analysis.

Emmanuel of Trade Forex Kenya explains: “The financial instruments depend on various complex factors including economic, political, supply, demand etc. which result in their price movements. You should be able to research, and make an informed, educated decision on the instrument that you want to trade.”

“There are a variety of instruments that are available in the market which can follow different trends at any time. Like for example: Stocks of a particular sector generally show similar price movements, while currencies of emerging economies follow US Dollar trends like: weakening or strengthening against USD based on the strength or weakness of the Dollar.” 

Education & experience is extremely vital to your success & making an informed decision in the online trading environment. Trading in the financial markets are subject to risks. You should also be able to understand the risks and mitigate them before investing.

2) Choose an Online Broker Suited to Your Requirements

You cannot directly trade in the financial markets including capital markets, forex market, commodities market or derivatives market. The buying and selling of instruments in the financial markets are executed through a middleman called a broker. 

Individuals in Kenya need to open an account on a registered and well-regulated broker to take part in online trading activity. There are different regulations for different financial markets, your broker must have the required license to provide the access to the particular markets.

Like for example – for stock trading, the broker needs to be licensed by NSE. While for forex & CFD trading, brokers need to be licensed by CMA to offer forex trading & CFDs on Commodities, Foreign Shares. Few such CMA licensed brokers that offer Forex Trading and CFDs on Foreign Shares, Commodities are FXPesa, Scope Markets, PepperStone Kenya. 

There are multiple brokers in the market that can be regulated to offer same instruments. You need to compare multiple factors like their fees, number of instruments on offer, deposit/withdrawal options, history & reputation in the industry, number of regulators the broker has license from etc. 

You have to choose a broker that suits your trading needs at lowest cost and also ensure that the broker is highly regulated.

3) Open an Online Trading Account

After choosing a broker, the next step is to open a suitable account. There are different types of accounts that are offered by brokers depending on the needs, requirements and types of the traders. 

For example – ECN accounts are offered by forex brokers to offer direct market execution of your currency and commodity trades at lowest fees & commissions. 

There are also some forex brokers that offer trading accounts in local currencies like Ksh Accounts for traders to be able transact & trade in their own currency. 

Moreover, many brokers also offer demo accounts for you to test the trading environment. You get virtual funds to trade and test your strategy in the markets. Its best to start with a demo account.

So, you need to be able to differentiate in different accounts offered by the brokers and the fees they charge on each account for the instruments you want to trade.

After you have selected the account type you need, you need to click signup for the account type you need and fill your details in the form on the broker’s app or website.

4) Complete the KYC

After you sign up with the broker, next thing is to complete the verification of your account. Verification is mandatory and is required by law to trade through any broker. Most brokers call this as KYC (Know your Customer). 

Before you can start executing any trade order or start investing in the market, it is required to complete the KYC verification which requires submitting identification documents, age and address proofs to the broker. 

Then broker will activate your account after they complete the KYC which can take 24-48 hours, depending on the brokerage. After which you can download their platform to start trading.

5) Start Trading

Once your trading account is active and then you need to decide on the order that you want to place like buy order on EUR/USD or buy order for 100 Apple Stocks, after which you place trade on that financial instrument through your broker’s platform.

Before executing the trades, it is important to understand the basic terminologies & tools like limit orders, stop- loss, indicators, and many other terms, so that you can trade actively based on informed decisions.

6) Keep track of Market News, Updates & Data

The financial markets are volatile and the prices of various instruments i.e. stocks, currencies, commodities fluctuate almost every second during the active market hours.

Any economic, political, national, or international news can trigger price movements in the market. Hence, it is important to keep a track of the market updates and news concerning the stock, commodity, currencies etc. that you are looking to trade. 


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EasyMarkets Demo Account Review for Practicing Trading

easymarkets demo account review
    • A 10+ Year Veteran of the Forex Market with a Strong Presence in Europe and Asia
    • One of the Few Brokers to Provide Guaranteed Stop Losses and Negative Balance Protection
    • Deep Product Coverage with CFDs on 95 Forex Pairs and Vanilla Forex Options on 23 pairs
    • Use Exclusive Tool Trade Controller More Effectively, Set Stop Loss and Profit Points For Your Trades
    • Personal Assistance with Trade Strategy and Order Execution from Dealing Room
  • stablished –2003
  • Domicile –Marshall Islands
  • Regulation –
  • Cyprus – CySEC (License Number 079/07), Australia – ASIC (AFSL 246566)
  • Restricted Jurisdictions –United States
  • Ownership –Privately Held
  • Segregated –Yes
  • Broker Type-Market Maker
  • Web Security –Verisign
  • Negative Balance Protection Policy –Yes

The EasyMarkets demo account review platform with a Demo account and experience simulated trading under live market conditions.

  1. No obligations,
  2. no cost
  3. no risk.

Feel the thrill ofEasymarkets Demo Account Review

 

trading the world’s markets, discover our trading platform and see for yourself just how easy we are.

this is the way to improve your techniques and professional traders to hone their skills. Try their trading simulator now for eight days. If you like them you can always open a live account, you’ll also get your lifetime demo account to practice trading strategies before you open live deals

EasyMarkets Demo Account Review Trading Features

EasyMarkets guarantees trade execution at pre-set stop-loss and profit points.  EasyMarkets is able to offer this because of its time tested risk management systems and procedures.  Brokers who do not provide these protections may execute an order at a very different level than your stop levels (also known as slippage), causing you to have much greater losses than anticipated.  Please note that this guarantee is only available for trades placed via EasyMarkets ’s web trading and mobile platform.

EasyMarkets is one of the few brokers with a negative balance protection policy.  Traders can incur a negative balance if the market gaps quickly and the broker is forced to close out open trades at a loss exceeding the account’s equity.  While some brokers begrudgingly forgave negative balances after the CHF crisis on a one-off basis, EasyMarkets is one of the few brokers offer this protection at all times and include it in its terms of service.

This Broker has more in-depth coverage of the markets than most forex brokers.   It offers CFDs on 95 currency pairs, 16 commodities, and 15 indices.  However, its coverage isn’t as broad as other brokers, some of which also offer CFDs on individual shares, bonds and ETFs.

EasyMarkets is one of the few forex brokers to offer vanilla forex options on the same platform.  This means you don’t have to switch to a different platform or broker when you want to options.  You can also use the same pool of funds for your option trades.

This means you don’t have to deal with  the hassle of transferring funds around and avoid withdrawal and deposit fees from other brokers.  EasyMarkets allows you to trade options on 23 currency pairs.  While there are no margin requirements for options, however, you will not be able to sell options unless you have an existing position in the underlying.

EasyMarkets offers up to 200:1 leverage on most currency pairs.  Automated trading available with Expert Advisors via Metatrader 4.

Market Analysis and Education

EasyMarkets provides a number of exclusive tools to help you optimize your trading.  The Inside Viewer allows you to see which are the most popularity traded currency pairs, the percentage of bullish / bearish traders, and the average stop losses and profit points on Easy-Forex.EasyMarkets demo account review

 

Trade Controller is a great tool which aids you in setting and modifying stop loss and profit points for your trades.  Its intuitive visual display allows to see profit / loss levels as both dollar amounts and exchange rates.

EasyMarkets demo account review

You are also given access to Reuters news feeds, exclusive fundamental analysis from EasyMarkets ’s research team, and technical analysis from leading independent research firm, Trading Central.  You can set SMS alerts for fills on limit orders, trade closings, and exchange rate levels.

this Broker has a nice archive of educational articles, videos, and eBooks.  They also have a well maintained YouTube channel where they provide videos on timely topics in the forex markets.  EasyMarkets also hosts the occasional webinar and in person seminar.

easymarkets demo account review Trading Features

  • CFD’s –Forex, Indices, commodities
  • Currency Pairs –95
  • Leverage –up to 200:1
  • Cryptocurrencies –No
  • Options –Forex Options
  • Trading Signals –Yes, Trading Central
  • Automated Trading –Yes
  • Social Trading –No
  • Phone Trading –No

easymarkets demo account review –  Trading Platforms

EasyMarkets demo account review Platforms 

  • Metatrader 4 (PC), Metatrader Multi-terminal (PC), EasyMarkets Web Trader (Browser), Metatrader 4 Mobile (iPhone, Android), EasyMarkets Mobile (iPhone, Blackberry)
  • Metatrader –Yes
  • Mac Software –No
  • Mobile Trading –Yes

easymarkets demo account review –  Customer Service

  • Online Support –Live chat and email
  • Phone Support –Yes
  • Multi-Lingual Support –Yes
  • Personal Account Manager –Dealing Desk Access for VIP accounts (USD 20,000 minimum deposit)

easymarkets demo account review –  Account Options

  • Minimum Initial Deposit –$25
  • Base Currencies –EUR, GBP, USD, CNY, AUD, PLN, ILS, ZAR, NOK, JPY
  • Minimum Lot Size –5,000
  • Account Types –Standard, Premium, VIP
  • Payment Options –Visa, Mastercard, Skrill, Bank Transfers

Safety and Security

asy-Forex is a respected veteran of the forex industry with 10+ years operating history. Its parent company is a privately held company domiciled in the Marshall Islands. EasyMarkets has offices in major financial centers around the world including London, Shanghai, Limassol, Warsaw and Sydney.

EasyMarkets is currently regulated by CySEC in Cyprus and by ASIC in Australia. They previously held coveted US licenses but decided to withdraw in 2010 after regulatory capital requirements were increased twenty fold during the recent financial crisis.

Over its more than a decade long operating history, EasyMarkets has been subject to a few small regulatory fines from CySEC relating to its advertising practices in 2010 and compliances lapses in 2009. There is an Israeli class action lawsuit alleging that Easy Forex provided investment advice without proper licenses.  There was a similar suit in 2010 that was subsequently settled out of court.  Overall, there hasn’t been regulatory action in recent years and the issues above didn’t endanger client funds or integrity of EasyMarkets ’s trading system.

Customer funds are held in segregated accounts in a number of reputable European banks and ANZ bank.  Online payments are secured by Verisign and EasyMarkets is subject to yearly audits by PriceWaterhouseCoopers.

Our Best Forex Demo Broker Reviews

Best Forex Demo Resources and usefull Links

Trading Forex, Stocks and CFDs carries risk and could result in the loss of your deposit, please trade wisely.

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AvaTrade Demo Account Review for Practicing Trading Forex

AvaTrade demo account review
  • Trusted Forex Broker Regulated in 5 Jurisdictions With Monthly Trading Volume Exceeding $60 Billion
  • Broad, Deep Product Palette Spanning Forex Options, Digital Currencies, Stocks, Commodities, ETFs, Bonds, Indices
  • Many Options For Automated Trading Including Mirror Trader, Zulu Trade, MQL 5, Signal Trader
  • Choice of Fixed or Floating Spreads and Leverage up to 400:1
  • Market Analysis and Educational Resources From Reputable Independent Providers Like Autochartist, FXInsights, Dow Jones, and Hushtrade
    • Established –2006
    • Domicile –Ireland
    • Regulation –Ireland – Central Bank of Ireland Reference No.:C53877), Australia – ASIC (License No.: 406684), British Virgin Islands – FSC, Japan – FSA (License No.:1574)
    • Restricted Jurisdictions –United States
    • Ownership –Privately Held
    • Segregated –Yes
    • Broker Type-Market Maker
    • Web Security –McAfee Secure
    • Negative Balance Protection Policy –No

AvaTrade demo account review

Avatrade has great depth and breadth in its range of markets. In additional to forex, Avatrade covers all major areas of the capital markets including equities, fixed income, and commodities.   It offers many more instruments than most of its competitors. Avatrade allows you to trade CFDs on 54 forex pairs, 16 commodities, 20 global indices, 21 ETFs, hundreds of individual shares from US, UK, Spain, Germany, France and Italy.

Avatrade is one of the few brokers to offer bitcoin and litecoin trading. It was awarded the Best European Bitcoin CFD Provider title at the 2014 European Bitcoin Awards. Avatrade also offers forex options for 30 pairs. You can also use options to hedge and alter the risk profile of your open forex CFD positions.

Avatrade provides many choices for automated trading including mirror trading, social trading, expert advisors, trading signals from independent providers like MQL5 and its API Library.  Avatrade offers higher leverage than most other brokers with up to 400:1 leverage for floating spread accounts.

AvaTrade Demo account Review – Market Analysis and Education

Avatrade demo account broker provides a lot of live market analysis to support your trading activity. Customers are given access to technical analysis from Autochartist and fundamental analysis from FXInsights, live news from Dow Jones, and audio commentary from Avatrade’s Chief Market Analyst, Naeem Aslam, a frequent contributor to news outlets like CNBC and Bloomberg.

Customers with deposits of at least $500 are given access to Autochartist free of charge. Autochartist’s pattern recognition features can be a very useful tool to help identify trading opportunities.

Avatrade invests heavily in trader education. It provides clients with ebooks, webinars and videos on a variety of topics, as well as, access to the premium forex education service, Hushtrade. Hushtrade arms you with a solid foundation in the fundamentals of forex trading and technical analysis. For advanced traders, Hushtrade also has cutting edge material covering trading strategy, psychology, and insights from professional forex and commodities traders.

AvaTrade Demo account Review – Trading Features

    • CFD’s –Forex, Commodities, indices, ETFs, Stocks, Bonds
    • Currency Pairs –54
    • Leverage –Up to 400:1 for floating spreads, up to 200:1 for fixed spreads
    • Cryptocurrencies –Yes
    • Options –Forex Options
    • Trading Signals –Yes, API Libary and MQL5 available to accounts with $1000 deposit and more
    • Automated Trading –Yes
    • Social Trading –Yes
    • Phone Trading –No

AvaTrade Demo account Review-Trading Platform

  • Platforms –
  • Metatrader 4 (PC, Mac, Browser), Avatrader (PC, Mac, Browser), Avatrader Options (PC, Browser), Mirror Trader, ZuluTrade, Signal Trader, Metatrader 4 Mobile (android, ios), Avatrader Mobile (android, ios)
  • Metatrader –Yes
  • Mac Software –Yes
  • Mobile Trading –Yes

AvaTrade Demo account Review- Account Options

    • Minimum Initial Deposit –$/€/£/AUD 100
    • Base Currencies –USD, EUR, GBP, AUD
    • Minimum Lot Size –1,000
    • Account Types –Silver, Gold, Platinum, Ava Select
    • Payment Options –Credit Cards, Debit Cards, Neteller, PayPal, Skrill, WebMoney, Wire transfer

AvaTrade Demo account Review- Customer Service

    • Online Support –Live chat and email
    • Phone Support –Yes
    • Multi-Lingual Support –Yes
    • Personal Account Manager –Yes, but dedicated account analyst for Ava Select account only

Safety and Security

Avatrade was acquired by Playtech in June 2015 at a sale price of $105 million.  Playtech is a London Stock Exchange listed FTSE 250 gaming software and services provider and the owner of Markets.com.   Playtech intended to integrate these brokers at some point in the future.  With these recent acquisitions and solid financial backing,  However,Playtech decided to walk away from the acquisition after the Bank of Ireland objected to the merger in October 2015.

Avatrade is a reliable and established forex broker officially regulated in 4 jurisdictions.  Overseen by regulators from Ireland, Australia, British Virgin Islands and Japan, Avatrade is subject to stringent compliance requirements, including how it handles client assets, security of client funds and financial reporting.  At present, there is no record of regulatory fines or settlements

Client funds are held in segregated accounts.  Avatrade secures your information and money with 256-bit SSL encryption across the entire website.  It uses McAfee Secure (HackerSafe) to prevent credit card fraud and identity theft.

Our Best Forex Demo Broker Reviews

Best Forex Demo Resources and usefull Links

Trading Forex, Stocks and CFDs carries risk and could result in the loss of your deposit, please trade wisely.

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Daily Financial News

Should Correlations Drive Your Investment Decisions?

By Ron DeLegge

Tuesday, May 10, 2016 5:57 PM EDT

Do stock market correlations matter?

Statisticians use correlations (or cross-correlation) to measure the relationship between asset classes or investments. The general idea is to better understand the similarity or dissimilarity in how investments perform against each other and to build a portfolio of investments that can benefit.

The CBOE S&P 500 Implied Correlation Index (ChicagoOptions:^KCJ) also known as the “ICI”  is one such statistical measure that uses options to estimate the average correlation among the largest 50 stocks inside the S&P 500 Index. The ICI recently hit 52-week lows indicating ultra low correlations between individual stocks and sectors.

Should investors use correlations between assets to make investment decisions? Before answering that question, let’s give a brief overview of how correlations work.

A correlation of +1.0 means that two investments have a perfect positive correlation. That simply means a correlation of +1.0 or close to it, is something you would expect from investments that perform and behave similarly.

Here’s an example: The historical performance and behavior of Intel (NasdaqGS:INTC) closely resembles the broader technology sector of stocks (NYSEARCA:XLK), which also happens to be Intel’s peer group. Should it be a surprise that Intel’s return pattern is similar to other technology stocks? Not at all, because individual stocks tend to behave similarly to the industry sectors where they reside.

S&P 500 Financial Crisis Correlation to Treasuries

In contrast, a correlation of -1.0 describes two investments with a perfect negative correlation. This means the return path of the two investments move opposite one another.

Here’s an example: The relationship between the S&P 500 Index (NYSEARCA:SPY) and CBOE S&P 500 Volatility Index (ChicagoOptions: ^VIX) could be described as a nearly perfect negative correlation. Why? Because the historical movements of VIX (NYSEARCA:VXX) have been opposite the S&P 500 around 80% of the time.

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