Learning Online Forex Trading in Kenya

Online forex trading is something that you can do and make a lot of money. However, before you start banking the big money, you need to learn how to trade the forex market.

In this article, I want to steal you into one of the secrets about learning online forex trading in Kenya. I’ve had the privilege to train many beginner, intermediate and advanced forex traders in Kenya. In all of them I have realized one thing. Many think that their greatest hindrance to making profits in the forex market is because they have not learned a certain technique.

Nothing could be further from the truth.

Learning online forex trading has more to do with how you handle and deal with yourself. While it is true that there are a few technicalities you need to muster before you can begin to trade profitably, the biggest challenge is learning how to control yourself.

Fighting your perceptions

The first thing that beginner forex traders need to overcome is the perception that currency trading is a get-rich-quick kind-of-a-thing.

I don’t blame you if you are looking to venture into FX as a shortcut to immense riches. This perception is created by many websites that tout forex trading as a way to make money fast and get rich quickly. In real sense, these websites do not have your best interests at heart. They want to take advantage of your newbie vulnerability to steal money from you!

Forex trading is not a shortcut to infinite wealth. Don’t venture into it if you want to make a quick killing and retire within your first year of trading. You will be thoroughly frustrated.

It is important that you approach internet forex trading with the right attitude.

Getting Your Feet Wet

Once you have dispelled all the myths that tout FX trading as a get rich quick, it is time to get your feet wet. When you are learning to swim, you don’t dive into the water head first. You first get your feet wet, test the depth of the water, and slowly waddle towards the deep end. Anything short of that is a recipe for an untimely death by drowning.

The same thing applies to online currency exchange trade. Here is a list of things that you need to do as you prepare to venture into forex trading:

  • Start reading

The first step to venturing into forex is getting an education. There are a few ways you can use to learn online forex trading, but whichever you choose, make sure that you are learning. You will need to learn the terms and lingo used in the currency exchange market as well as the strategies used to trade.

If you cannot manage to learn forex on your own, you may consider hiring enrolling for online forex trading classes in your town. Having a mentor to hold your hand simplifies the learning process and is faster than trying to learn everything on your own.

  • Research online forex brokers

All retail forex traders trade the forex market through forex brokers. However, not all brokers are born equal. Some are nothing but scams that will disappear with your profits after you’ve been pouring out your heart and soul on trades.

Some brokers require high starting capitals while others allow you to start trading with a small deposit. You will need to spend some time reading forex broker reviews and visiting their websites to understand how they operate.

Some of the things that you should keep in mind when researching forex brokers include:

  1. Check whether the broker is registered with the requisite authorities in their country of jurisdiction. This is a crucial step that will help you differentiate  real serious brokers versus those who are out to get you.
  2. What is the minimum deposit allowed by the broker? Is it an amount that you can easily raise without investing money that you cannot afford to lose? If you have less than $2000 to invest, you should probably seek those brokers who will allow you to trade in micro lots.
  3. Ease of deposits and withdrawals: You do not want to be stuck with a broker that can’t let you withdraw your profits easily. Which deposit and withdrawal channels does the broker offer? Are you comfortable with at least one of them. Keep in mind that many brokers will only let you withdraw your profits into the same account you used to fund the account.

If you have ease of mind with your broker, you will manage to allocate more time to analysis and fine-tuning your strategy. Doing your due diligence before settling on a broker goes a long way and can greatly enhance your chances of becoming the next successful Kenyan forex trader.

  • Open a demo trading account

After you have read many forex broker reviews and settled on a few that look promising, you will need to open a demo account to test how trading on their platforms looks like.

Many legitimate forex brokers (such as Easy Forex) will let you open a free demo account to pilot test their trading interface. They will even load the account with virtual money.

The free demo accounts allow you to learn more about the forex market and to practice trading with zero risk.

  • Test out some strategies

So far so good. Up to this point you should have some solid information about FX trading and a demo account. It is not time to put what you’ve been learning into practice. After you learned how to operate the demo account, it is time to test out some strategies.

I am assuming that you took step 1 very seriously and learned all that there is to learn in online forex trading. Which strategy did you think is the best to trade forex? Test it now.

I suggest that you spend a lot of time practicing trading strategies on the demo account. Devote time to your demo trades daily, and do not upgrade to a live account until you are making profits on the demo account. I repeat. Do not risk your ‘real’ money if you have not started making consistent profits on a demo account.

  • Open a live account

The final learning step is to open a live trading account. You will need a scanned copy of your original national ID card and a bank statement or utility bill.

Start by depositing a small amount into your real account and trade small lots. Better still, follow this link to get free $25.00 that you can use to start trading on your live account.

If you have gone up to this step without despairing, give yourself a pat on the back. To sum up what you’ve learned today, go slow when you are new to online forex trading. Take your time before you open a live account. Find a mentor to hold your hand. Practice on a demo account until you are sure of yourself, and once you open a live account, trade small.

Till next time. I am still yours trully. Patrick Mahinge.

Beginner Tips and Tricks for Trading Forex on a Demo Account

The best way for beginner forex traders to become acquainted with the forex market is to trade on a demo account.

But where do you get a free demo account to practice trading?

Don’t sweat the small stuff. Many forex brokers offer a free demo/practice account. To access the demo, you only need to sign up on the broker’s website for free, and you are good to go.

Practice or demo accounts are funded with ‘virtual money’. You are free to use the virtual money to place trades in the market. Any profits made on a forex demo account cannot be withdrawn, neither can loses be debited on your account.

Why Demo Accounts?

Practice accounts give you a great opportunity to experience the live forex markets without putting any of your money at risk.

  • You can analyze how prices change in different times of the day
  • You can see how the behavior of different currency pairs differ from each other
  • You can see how the forex markets reacts to different news releases
  • start analyzing charts and improve your understanding of how margin and leverage work
  • You can use a demo forex trade account to strengthen your strategy before putting it live

Using a demo account, you can start trading in real market conditions without the fear that you are going to lose money. If you are looking for experience in forex trading, a demo account is what you need.

Demo/practice accounts are also an excellent way of testing how a certain broker’s platform works. Unfortunately, there is one thing that you can’t simulate on a demo trading account: the emotions of trading. To get the best out of your trading account, you will have to treat it as if it contained your hard-earned money.

Getting Started With a Demo Account

I assume that you have already signed up with a forex broker of your choice. If you haven’t, I recommend you do so right now. Here are our recommended partners.

There are two broad ways that you can trade forex on the markets. You either place direct orders using a click-and-deal featured on the MT4 or you employ orders to be executed when the market meets certain conditions.

Placing Click-and-Deal Orders

Many forex traders love trading the market at its current positions (click-and-deal orders). They love the certainty of knowing they are in the action as opposed to placing an order that may or may not be placed. This ‘live activity’ is part of what makes the forex market so alluring. It is like sitting in a room full of stock brokers shouting their orders (think the Wolf of Wall Street!)

Most forex brokers provide trading platforms that give you the live stream of currency prices in the market. These platforms will allow you to place a trade with a single click of your mouse button.

To place a trade on such platforms,

  1. Specify what amount you want to trade
  2. Click buy or sell

The forex platform will respond instantly, mostly within a second or two. If the trade went through, you will receive a popup notification and your MT4 will update to show your open position. If the price changed in-between you placing the order, the platform will notify you that the trade did not go through.

The order might also fail to go through if your trade is larger than the margin allowed. In this case, you will need to reduce your trade size and try again.

One important thing to keep in mind when trading on a click-and-deal platform: Any action you take on the platform is your sole responsibility. You might have meant to click “Sell” instead of “Buy”, but no one knows for sure, except you.

Using Orders on a Demo Account

Orders are an important part of the forex market. They are trades waiting to happen. Savvy forex traders use orders to catch market entry points that would otherwise elude them when they are not in front of a trading screen.

Recall that the forex market is open for 24 hours a day, 5 days a week. A market move is as likely to happen when you are in front of your screen as when you are deep asleep. If you have a daytime job, market moves are also most likely to happen when you are deeply engrossed in your boss’s menial work.

Orders are how you are able to capture market moves and enter trades when you are not in front of your trading screen.

But orders are have more uses than simply capturing market movements when you are asleep. I can’t emphasis the importance of using orders strongly enough. In a highly volatile market, using orders can help you capitalize on quick market movements while limiting the impact of negative market moves on your account.

Common Forex Market Orders

There are many type of orders available in the forex market. However, all orders are not available with every online broker. Before you sign up for a forex account with your broker, you will need to verify whether they offer all orders that you might want to place during your trading career.

Take profit orders

Don’t you just love the name!

Take profit order are used to lock in the profits that you have already accumulated on a trade.

Limit orders

A limit order is an order that triggers a trade at a more favorable price than the prevailing market price. A classic example of a limit order would be “Buy low, sell high”

Stop loss order

This one doesn’t sound so good, does it? But don’t ignore it. Among all orders, the stop loss order carries more significance and is critical to your success as a forex trader in Kenya.

In their most conventional use, stop loss orders will close a trade that is losing money. In your case, you’ll be using stop loss orders to limit loses to an acceptable threshold. If you do not set stop loss orders, you are leaving your account at the mercies of the market, which is nothing short of financial suicide.

Trailing stop-loss orders

One of the keys to successful forex trading is limiting the size of your loses while exponentially maximizing your profits.

The best way to do this is to let your winning positions run and stopping your losing positions. A trailing stop-loss order does exactly that. It will adjust its order rate as the market move, but only in the direction of your trade. For instance, if you are long CHF/CAD at an entry of 1.5750, and you’ve set a trailing stop-loss order at 30 pips, the stop will first become at 1.5720.

If the CHF/CAD moves higher, the trailing stop adjusts itself, pip for pip. It will continue to adjust higher as the market moves higher. If the market reaches its peak, the trailing stop will be 30 pips below the top. If the market ever moves down by 30 pips, your trailing stop-loss will be triggered and your position will be closed.

To the savvy Kenya forex trader, a trailing stop is a powerful order.

One-Cancels-the-Other Market Orders

Also commonly referred as OCO’s, a one-cancels-the-other market order is a stop loss order paired with a take profit order.

An OCO is an incredible insurance to a savvy forex trader. All positions remain open until one of the order levels is hit. When one order level is triggered, the other one is simultaneously closed.

For instance, if you are short on USD/JPY at 117.00 and you believe that the currency will keep moving up once it hits 117.50, you’d place your stop loss order at that point. At you then place your take profit here.

The above scenario has clearly marked out your playing field. If the USD/JPY keeps playing between 117.49 and 116.26, your positions will remain open. Conversely, if the market hits 116.25, your take profit order is triggered and you walk away smiling. If 117.50 is hit first, you’ll suffer some clearly pre-demarcated loss, nothing to worry you so much.

OCO orders are highly recommended for every order you have open in the market.

Managing Trades on a Demo Account

At this stage, you have placed orders and placed all the requisite orders. Is it time to sit back, relax, and watch the market do its thing, right?

Not so fast, amigo.

The forex market is not some form of gamble where you roll the dice and wait for Lady Luck to smile upon you; it is a dynamic environment where variables that influence your trades are constantly cropping up. These variables alter the way prices develop and render previous price expectations null.

A lot can happen between the time you set up your trades and the time they hit their targets. Forex trading is not a set-it-and-forget it kind of a thing. You need to keep abreast with market developments.

How to Deposit Money in Your Easy Forex Trading Account

Easy Forex is one of the most recommended forex brokerage firms in Kenya. Opening an account with them is easy, and you can start practicing how to trade forex by opening a demo account. However, after some time, you may feel that the time has come to start trading with real money.

So, how do you deposit money into your Easy Forex account?

Easy Forex: Account Types

Easy Forex provides forex traders with 4 types of accounts to choose from depending on the minimum amount of deposit that you have, the lot sizes you wish to trade and the level of desired margin level.

The four account types offered are:

  • Mini Account– Requires $25 to open.
  • Gold Account– Minimum deposit is $500
  • Platinum– Minimum deposit is $5,000
  • VIP– Minimum deposit is $10,000

Funding Your Easy Forex Account

Your trading account needs to be funded before you can start trading. Doing so is easy and takes less than 5 minutes.

You can fund your account from your debit (ATM) card, Credit Card, Direct Bank Transfer or using one of the accepted E-wallets.

Credit cards have become the most convenient way for traders to deposit money into their Easy Forex accounts. The payment method is secure and takes only a few minutes. Simply type your credit card details on the deposit form, and hit ‘Deposit”.

However, you need to note that most forex brokers insist that you can only withdraw funds from the same source that you used to deposit funds. Don’t use your friends Skrill account if you do not wish to withdraw your profits from the same account.