Let me start by stating that forex trading is a real activity and you can make money from it. In fact, the forex market is global and is also the biggest market in the world. I will be highlighting some of the conditions you need to meet on how to make money in forex trading in Kenya.
Unfortunately, forex trading in the country has become controversial due to the high number of scammers and greed to make quick money.
Whereas there is no shortcut to making sustainable income, most investors have been duped into believing they can invest and start making money almost immediately. If anyone gives you such an idea, run as fast as possible because it is a lie.
Success in forex trading comes through hardwork, investment, and experience.
What is Forex trading?
Forex trading involves buying and selling a currency against another. This is made possible because currency prices keep changing. Either going up or down. Hence, as a trader, your role is to predict the correct price movement.
If you can get it correct, you make a profit. However, in case you are wrong, you make a loss as well. As an example, you can trade Kenya shilling against the US dollar.
How to make money forex trading in Kenya
As mentioned, you have to put in the work and follow the process if you want to make money forex trading in Kenya. I will highlight some of the steps that are key to achieving this success.
1. Invest in learning
There is no alternative to learning if you want to make money trading forex. Learning is the starting point for every successful forex trader. On average, you will need at least 1 to 3 years before you become a successful, consistent, and profitable trader.
There are various ways to learn forex trading. Some of these include taking formal classes, learning through online materials, or getting a mentor. The best approach is to get someone who is already successful in the trade to teach you.
Some of the benefits of this approach are you will get the important information faster and easier. Brokers also allow you to use demo platforms to learn. You should only proceed to live trading when you become profitable in the demo platform.
Some of the key items you need to learn include;
- Key currency pairs
- Fundamental analysis
- Technical analysis
- Price action
These will be key when you get into the market and start live trading. Due to the complex nature of this market, you can never learn everything. However, you should target to get as much as you can to increase your chances of success.
With time, trading becomes easier and you can identify opportunities easily.
2. Get adequate capital
Trading forex requires you to have capital. Just like every other business, capital is necessary to get you started. However, you will find that most brokers allow you to start trading with as little as 5, 000 shillings.
Although this sounds attractive and fair, it will not allow you to make substantive profits. This situation can result in taking more risks in the market to make more.
To make enough without taking high risks, you need to put in adequate capital. The more capital, the higher the profits and the more exciting trading will become.
Capital determines some key market decisions such as the lot size and leverage. The more capital, the higher the lot size to use and the less leverage.
3. Use a regulated broker
You need a broker to trade forex. A broker is an intermediary that offers a trading platform and brings both the buyers and sellers together.
This means a broker is a key pillar if you want success in the trade. You should only work with a broker that is regulated to ensure your funds are safe and there is a lack of exploitation. Brokers also offer other support services such as training and market information.
Forex trading brokers in Kenya are regulated by the capital markets authority (CMA). Some of the top brokers in the country include;
4. Learn emotional control
Forex trading is a very emotive venture. The aspect of making and losing money quickly will bring out the very deep of your emotions openly.
One such emotion is greed. Once you make some profit, greed will urge you to try and make more. In the process, you end up deviating from your strategy and hence making mistakes that could be fatal.
Hence, learn as much as you can to stick to the trading strategy as this is the best way to counter emotional trading.
Even when you are in losses, always be calm and follow your plan. Don’t get the urge to take a bigger risk to recover your loss as this could result in even bigger losses.
Some of the other ways to control emotional trading are working with stop loss and taking profit positions.
5. Don’t give up
Finally, if you are determined to succeed in forex trading, you should be ready to do what it takes until such time when you become profitable.
Most people end up giving up just after a few tries. However, you will need up to 3 years to become consistently profitable and identify market tricks.
This means that you should be ready to go all the way to the end. This way, you will have given your best, and increases your chances of success tremendously.
Is forex trading in Kenya profitable?
As long as you stick to these basic principles, you are highly likely to become profitable. The opportunities in this market are endless and this allows you to make as much as you want.
When profitable, you can transition to making forex trading a full-time job as it pays well.
Below are some tips on how to make money forex trading in Kenya.
- Invest in learning
- Get adequate capital
- Use a regulated broker
- Learn emotional control
- Don’t give up