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Forex Trading in Kenya – What Investors need to Know

The Forex Market involves buying, selling, or exchanging currencies from all around the globe. It determines the exchange rates of all global currencies and is the largest financial market in the world with a daily volume of $6.6 trillion in transactions.

The Forex Market involves buying, selling, or exchanging currencies from all around the globe. It determines the exchange rates of all global currencies and is the largest financial market in the world with a daily volume of $6.6 trillion in transactions.

The participation of Governments, Banks, Global Companies, and Institutional investors make up the majority of this market. Retail Forex Trading is a smaller segment of the Forex Market where retail investors speculate on the exchange rates between various currencies.

How does Forex Market work?

The two main factors that move the forex market are supply and demand. If the supply is more than the demand for a currency, its value will decrease, and vice versa. Other complex factors also affect the value of a currency such as a country’s economic output, FDI inflow, the balance of payments, intervention or pegging of currency by the country’s government, social factors, and political conditions. But ultimately the supply and demand of a currency in the global market determine its price.

Under the Bretton Woods system of 1944, all currencies were pegged at the same value against the US dollar and central banks agreed to maintain that fixed value by buying their currency when it was devalued and printing more currency if it became too strong.

But after the Bretton Woods agreement collapsed in 1971, currencies were allowed to float freely in global forex markets just like commodities and stocks. The US dollar still remained the Base Exchange currency for global trade. And as the demand for one currency became stronger or weakened against the USD, it either valued higher against the US dollar or devalued against the dollar depending on the demand.

What is Forex Trading?

Forex Trading is the process of buying and selling currencies in the Forex market. Your bank, governments, global companies, and speculators use the forex market to exchange currencies. Currency prices continually fluctuate depending on the above factors.

Speculators and investors make up 5.5% of the forex market as small and institutional investors buy and sell currencies intending to make a profit from the difference in exchange rates. This is called retail forex trading.

For example, 1 USD (US dollar) is currently selling at 106.29 KES (Kenya shilling). That trade is called USD/KES in the forex market. The USD is the base currency (that you want to buy) and KES is the quote currency (that you want to sell). So you can buy 1 USD for KSh 106.29 in the forex market.

So, if you want to go abroad for study or travel, you will have to buy USD at the current USD/KES quote from your bank. Your bank will normally add a ‘spread’ or commission to the quoted rate. In this case, you are effectively trading forex in retail and your bank is acting as your broker in the forex market.  

The  Capital Markets Authority began regulating Kenya’s retail forex market in 2018 and allowed retail traders, investors and brokers to take part in this market. This boosted currency exchange & forex trading activities and there are now estimated to be over 70,000 traders in Kenya who regularly participate in the market to speculate on currency fluctuations.

How can you trade forex in Kenya?

Under the Capital Markets Online Foreign Exchange Trading Regulations enacted in 2017, the CMA provides three types of licenses:

  • The Dealing Foreign Exchange Broker
  • The Non-Dealing Foreign Exchange Broker
  • The Money Manager

The Dealing Brokers and Non-Dealing Brokers (a and b) offer derivative instruments on forex but they do not offer investment management to clients. However, the Money Manager (c) can manage the forex portfolio of a client.

The CMA does not regulate individual forex traders but brokerages must get the relevant license from the CMA to offer Forex Trading instruments. The CMA has licensed three Non-Dealing Online Brokerages. Only one company is licensed as a money manager.

You can trade forex in Kenya through any Dealing or Non-Dealing Broker or Money Manager licensed by the CMA. For this, the broker will usually charge you a commission or spread.

The spread of a broker is measured in percentage points or ‘pips’. Brokers can either charge Fixed Spreads or Variable Spreads which depends and varies from broker to broker.

Basic steps involved in opening a forex account:

  1. Compare the types of accounts on the broker’s website. Decide on the type of account based on your needs and resources.
  2. Fill out an application form and complete KYC (Know Your Customer information).
  3. Upon successful completion, you will be given a username and password.
  4. You can log in to the client portal of the broker’s website using the given credentials.
  5. Once you successfully transfer funds from your bank account, you will be ready to start trading.

What should you look for while choosing a Broker?

As an investor, you should always choose a CMA regulated broker.

The CMA will help to protect your money from fraudulent activities or exposure to an excess of risk by maintaining safe trading conditions.

The CMA also ensures that the broker doesn’t use your funds for their own benefit.

In the case of any disputes, you can approach the judiciary to seek damages.

The CMA makes sure that regulated brokers submit financial reports periodically to keep the investors safe.

There are only three forex brokers that have been regulated by CMA as Non-Dealing Online Brokers in Kenya. They are:

-EGM Securities which operates FXPesa

-SCFM Limited

-Pepperstone Kenya

The CMA advises against using a foreign broker but if you prefer to take the risk, make sure that the broker is supervised by a reputable regulatory body such as the UK’s FCA, the Australian ASIC, or Cyprus’s CySEC. Regulators make sure that proper trading environment & safety is ensured for investors.

It is always best to choose a broker that offers local customer support and local deposit/withdrawal methods for easier transactions.

Whether you are a new investor or an experienced one, always start off by trading on a demo account when switching to a new platform. While most platforms offer the same features, they usually look or feel different. A demo account will help you to get a grasp on all the tools offered by the platform.

Demo accounts also help you to learn the specifics about the platform, like the spread or order entry procedure.

Once you finish trading on a demo account, you can take a look at all the profits or losses you have incurred. This can help you build a new strategy or check the effectiveness of the one you have in mind.

Risks of Forex Trading

Retail Forex Trading is a very risky business, riskier than traditional investments like stocks.

Some common risks are:

High Leverage

Leverage is used to increase the returns on investment by borrowing money from a broker. It increases your market exposure and thus puts you at a greater risk. During market fluctuations, there is a chance to lose your invested capital and even more in some cases.

High Volatility

The forex market is highly volatile and this volatility helps speculators to make a profit. This attracts a lot of short-term traders and speculators but the market is unpredictable and can go against you at any time. The market also remains inaccessible over the weekend so any unfavorable development during this time might lead to significant losses.

Liquidity Issues

The liquidity of a market stands for the ease with which you can open or close your trading positions at the price you are expecting or similar to the same. While the forex market is generally considered to be one of the most liquid markets, there are times when it goes through stages of low liquidity. The forex market exhibits low liquidity on holidays and weekends as banks are closed during this time.

The forex market is considered risky, especially for beginners. This risk increases if the investor does not have negative balance protection or a stop-loss in place.

Negative balance protection prevents your account balance from going negative when you incur substantial losses. So make sure your broker offers negative balance protection and stop-loss as a safeguard against undesirable developments.

Protect yourself against scams

As there was no regulatory body in Kenya to monitor the forex brokers until 2018, there are still many illegal and unregistered brokers in Kenya. Over 100 such companies are yet to get their licenses from CMA.

The biggest Forex scam in Kenya was the VIP Portal. In 2013, the company promised clients to invest their money in forex trading on their behalf. They promised that they would double their money. Moreover, the company also promised investors an additional 5% of the money for every person they would bring in as a new investor. Over 13,000 individuals deposited their money and the losses were reported to be more than $2.9 million from Nairobi alone.

Some common forex scams you need to avoid are:

The Signal-seller scam

Signal-sellers are traders or companies that offer professional recommendations on favorable times to buy or sell currencies in return for money. These signals are often wrong and can result in losses for you.

‘Robot’ Scamming

A ‘Robot’ is an automated trading program. The scammers claim traders would be able to earn even while sleeping. These systems often don’t work and many of them have never undergone a formal review or test.

Fake Broker or Investment Scheme

They claim to double your money or offer big returns without proof. They are not regulated and they keep your money for themselves rather than investing it.

Conclusion

Despite the risks, the forex market is crucial for the global economy. Speculators or traders can use the forex market to invest money but they need to be cautious.

It is important to first educate yourself about the forex market before starting to trade. Learn the basics first, then practice on a demo account, and finally start investing in small amounts.

You should also learn to use risk management tools like stop-loss, negative balance protection, risk-reward ratio to name a few. These will limit any losses and protect you from losing your entire capital.

Lastly, make sure you trade in a regulated environment so that, if something goes wrong, you can seek redress.

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Online Trading platform SIRIX

best-forex-demo

SIRIX|  Online Trading platform SIRIX Review

[yasr_overall_rating]

Everyone that has been trading for some time has most likely traded on the metatrader 4 trading platform of metaquotes. This has been the standard in the industry for the last couple of years.

 

But more and more brokers Like CMSTrader and UBCFX are offering alternatives that might suite certain traders even better then the MT4 as they have a lower learning curve and are designed more intuitive.
One of these platforms is the Sirix Trading Platform.
The Sirix Trading platform is

Sirix, a fully packed trading software with numerous with numerous options and special indicators that are designed by the software company to present you with a personalized trading experience.

Positive features and benefits of the Sirix Trading Platform

Ease of Use: if you are a trader you will be able to access your Sirix trading platform and see all your trades and other information at any place and time. The Web-trader is a fully function trading platform that does not require you to do any download. This has more or less become the norm of the industry and if you for example take the Sirix Trading platform of LegacyFX you will be able to have a download desktop version, a web version and a mobile version.
these in general all have the same functionalities but of course is the mobile version a bit more limited due to the smaller screen real estate.

Indicators and Options: this platform provides build I more than 50 Indicators which for most traders is over kill but it does allow most traders to find the right indications to match their trading behavior and trading strategies.

The Charting Package that Sirix provides is easy enough to understand and gives you as a trader all the information you need, there are different time frames that in combination with the ability to display lines and annotations make this platform feel like it is designed for you.

Social Trading: Sirix has a full feature social trading module that allows you to watch the trades of others which might give you new insights and trading ideas. If you come a across a trader that is particular successful you are able to copy that traders’ trades and create a full automated copy trader,
You as the trader are still in charge and you have the option to trade with lesser or higher amount then the trader you are copying.
In order to use the social trading, you have to open an account with their social trading community.

This can only be done by using a nickname an order to protect you identity. When you are part of the community then you are part of all the brokers that offer this feature to their traders. Meaning you are able to follow a trader that is trading with 12trader while you are trading with account from UBCFX or any other broker that has Sirix.

Now I have to mention that if you look to only trade social then the Etoro Platform is still a better solution s this system is built only for social trading and they have pretty much defined the concept.

 


Sirix Crypto Trading Platform

this is the latest platform that was launched by Leverate.

it focuses , just like the name says more n the trading of cryptocurrencies.

as this company understands that this is the direction where the market is going and more and more traders are asking for trading in Bitcoin or ripple trading to just name a few they have added this feature to the Sirix Platform , this means that every broker that has the sirix trading platform is in theory able to offer trading in cryptocurrencies.

in addition they have launched also a platform that is only trading cryptocurrencies but that will be another review as i have yet to see and play with this system


Conclusion
The Software company Leverate has created a very user friendly platform with inbuilt social trading and news functionality. When they launched this platform in 2012 it was already a good platform but today it rivals the best of them easily.

The Intuitive aspect of this platform is one of the key features and makes the threshold of trading lower for newbies. There is also a fastn amount of Sirix Tutorials out there that will help even the total beginners with the Sirix Platform

Now of the traders that need bots and more indicators then there sis still nothing that beats the metatrader 4 trading platform but for many traders Sirix offers more then enough and makes the trading experience easier then with MT4.
More and more brokers are offering this alongside their other trading platform so you as a trader will come across more and more brokers that have the Sirix Trading platform in their arsenal.

These are some of the Best Broker for trading on Sirix

UBCFX
LegacyFX
12Trader
CMStrader

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Who Will Speak at Blockchain & Bitcoin Conference Stockholm?

Who Will Speak at Blockchain & Bitcoin Conference Stockholm?

Bringing DLT Specialists Together:

 

 On September 11, Sweden will host Blockchain & Bitcoin Conference Stockholm organized by Smile-Expo – international coordinator of business events.

The conference will introduce various topics regarding blockchain and will drive attention to the most topical problems of the cryptocurrency market today.

Key speakers:[yasr_overall_rating]

One of the invited experts is the Member of Swedish Parliament Mathias Sundin who is involved in the Tax Committee and the Finance Committee. The specialist has co-founded a revolutionary technological organization Warp Institute and joined financial company Goobit. At the event, the speaker will analyse the power of decentralized systems, evaluating its long-term strenghts.

Head of Digital and Innovation at Landshypotek Bank Merete Salmeling will deliver the presentation, too. She will explain how DLT can be integrated into the real estate, and what advantages it brings.

President of Blockchain Alliance Europe Tanja Bivic Plankar will join the conference as well. Being an initial coin offerings expert, she will share knowledge about ICOs, describe recent innovations in the token sale sphere and talk about the regulatory framework.

Meet the speakers at the Blockchain & Bitcoin Conference Stockholm

Regulatory and legal challenges coming with innovations will also be discussed by Dr. Guenther Dobrauz-Saldapenna – Partner & Leader PwC Legal Switzerland. The speaker is a lawyer, VC investor, and banking specialist. He provides business consultations and has already written 10 books discovering innovative processes, money and technology.

See the full list of Key speakers here

Blockchain & Bitcoin Conference Stockholm is the second crypto event in Sweden carried out by Smile-Expo. The company has already held 40 successful crypto conferences in 25 countries.

Use an opportunity to meet leading DLT specialists, ask questions and learn new topical information about the blockchain industry at first hand at the conference!

Blockchain & Bitcoin Conference Stockholm

Details of the event and registration are available on the official website of Blockchain & Bitcoin Conference Stockholm.

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Go Visit the Blockchain & Bitcoin Conference Stockholm

Go Visit the Blockchain & Bitcoin Conference Stockholm

The Blockchain & Bitcoin Conference Stockholm is a highly anticipated crypto event in Sweden.  and is being held for the second time.

after the success of the first one they look to make this event a annual one.  since the crypto industry is going more and more out of the shadows and becomes more mainstream you will find that the quality of people involved also grows.

this is clearly displayed in the extensive list of speakers at this event.

Event goals:

bringing together the international business community in order to share their experience of integrating blockchain and cryptocurrencies; discussing blockchain industry issues and finding ways to solve them; encouraging a balanced growth of the cryptocurrency market.

Conference topics: 

  • blockchain in various sectors: energy industry, real property, newsmaking etc.
  • Legal regulation of the blockchain sector
  • token models and their application
  • ICO regulation.

Speakers:

the list of world-renowned blockchain experts, including government officials, foreign investors, entrepreneurs, lawyers, and developers is impressive and should get this event the notice it deserves.

Meet the speakers at the Blockchain & Bitcoin Conference Stockholm

who should not miss this Event :

investors, business people, lawyers, startup founders, and those aiming to launch a token sale.

why should not miss this Event :

:to receive full information with case studies about the blockchain application, to discover how to comply with the legal norms in the blockchain industry, to find business partners, and to enhance your brand awareness.

Prices of the Event

Standard ticket  – 240 EUR

  • Full access to all conference sessions
  • Access to demo area
  • Сoffee breaks
  • Speed networking

Student ticket – 121 EUR

  • Full access to all conference sessions
  • Access to demo area
  • Сoffee breaks
  • Speed networking

A valid student ID should be presented at check-in. No refunds on the day of the event.

Buy Your ticket Now


Blockchain & Bitcoin Conference Stockholm is a part of the series of Blockchain World Events held in 25 countries. The organizer is Smile-Expo International Company.

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