Welcome to Forex Kenya, the first website dedicated to forex trading in Kenya. For those of you who are not familiar with the forex market, it is enough to say that forex stands for 'Foreign Exchange' and it represents the trading of currencies one against another. By trading on the forex market, Kenyans can make money by correctly guessing which currency is going to raise and which one is going to fall.
To easily explain how forex trading works we will give you a simple example. Let's consider that you bought 10,000 US Dollars in February 2023 at the rate of 125.50 Kenyan Shillings for one dollar. You paid a total of 1,255,000 Kenyan Shillings (KES). After holding the US Dollars (USD) for six months you decided to sell them in August 2023 at the rate of 143.50 KES per USD. You would have gotten exactly 1,435,000 Kenyan Shillings (KES) and made a profit of 180,000 Shillings in six months, since you bought the dollars cheaper than you sold them.
This is how you make money by trading currencies. In the above example you probably saw that you needed 10,000 dollars to make a profit of about 1,250 dollars in six month. That's a lot of money and a lot of time, but don't worry, there are ways to overcome this issues very easy.
Trading forex is done through a forex broker. The broker is a specialized company that creates the perfect environment for traders to take advantage of the currency fluctuations in no time. Opening an account with a forex broker will allow you to trade on the international forex markets using your funds as margin collateral, allowing you to place larger trades. How is that possible? Through leverage.
Forex brokers offer leverage in order to allow their clients to trade high amounts of money. A broker that gives you a leverage of 1:200 allows you to trade 200 dollars for every dollar you have on your account. If you make a deposit of 100 USD you are able to trade worth of 20,000 USD because of the leverage effect. Why is the broker allowing this? Because he knows currency markets move very slow, and in order to be able to make significant profits in short intervals of time you need to trade with lots of money.
Here is another example to explain why the broker gives you leverage. Let's consider the currency pair EUR/USD, the most traded currency pair in the world. At the time of writing this article, the rate for EUR/USD is 1.0631 which means that one Euro costs 1.0631 US Dollars. In order to buy 10,000 Euros you need to pay 10,631 US Dollars. Let's say a trader buys 10,000 Euros through his forex broker at the above mentioned rate, and two days later sells them at 1.0731 (a difference of 100 pips which means a movement of only 0.9% which happens frequently in a two days period). Our trader would make a profit of exactly 100 USD with this trade (notice that for the EUR/USD currency pair, one pip equals one dollar when trading 10,000 - the 'pip' is the fourth decimal of the rate). Since he made a profit of $100 in two days the broker knows that his risk is also limited in a two days period, and even if he loses he can't lose too much. If the trade would have gone the wrong way in the same amount, he would lose $100 only. This is why the broker is willing to allow the trader to buy 10,000 Euros while depositing only 100 dollars. In the worst case scenario when the trade goes bad and the loss gets to 100 dollars the broker will automatically close the trade and limit the loss to the total deposit.
To make a long story short, leverage is given by the brokers in order to help traders make bigger winnings at the risk of higher losses in shorter times. That means, trading more. The more you trade, the better it is for the broker, because of the so called 'spread', which is the difference between the buy and sell price of each currency pair. The best part is that forex spreads are very low because competition among forex brokers pushed them to lower the spreads to be more attractive to clients. A typical spread for EUR/USD is 2 pips, which means the broker charges only 2 dollars for a trade worth 10,000 Euros. In the above example when our trader won $100, the market moved 102 points for our trader to make a profit of 100 dollars and the broker a profit of 2 dollars (this is because of the 2 pips difference between the buying and selling price).
While there were no Kenyan based brokers in the past, we now have great news for Kenyan traders. Pepperstone Group, one of the largest and most trusted forex brokers in the world has opened offices in Kenya. Their local company is named Pepperstone Markets Kenya Limited and it is now regulated by Kenya's Capital Markets Authority (CMA).
Pepperstone is renowned worldwide for its ultra fast execution and razor thin spreads, making it one of the world's best retail forex brokers. With offices and licenses in Australia, United Kingdom, United Arab Emirates, The Bahamas, Germany, Cyprus and now Kenya, Pepperstone is a truly global forex broker and it is by far the best choice for Kenyan traders.
To visit Perpperstone's website, click on the logo below:
Risk Warning: Between 75-95% of retail investor accounts lose money when trading on margin. Pepperstone Markets Kenya Limited | Company No.PVT-PJU7Q8K | CMA Licence No.128
If you want to see more forex brokers that accept traders from Kenya, we have made a list with the best international brokers.
The best forex brokers for Kenyans are:
All of them offer high leverage, mobile trading, low minimum deposits and very advanced trading platforms. They also have plenty of educational material to learn more about trading forex and how to make money trading forex online.
Disclosure: Any information presented on this website does not represent investment advice.
Risk Warning: Investing involves high risks, including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
You should consider whether you can afford to take the high risk of losing your money. Before deciding to trade you should be fully informed of the risks and costs associated with investing with the financial markets. The data contained in this website is not necessarily real-time nor accurate. Forex Kenya and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your investment, or your reliance on the information contained within this website.
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