Forex trading has been around since about the 1980s in countries such as Britain and the USA. At that time, at least the system had been established.
In Kenya, forex trading is not common to many, and to many, it is common to know the heartaches and heartbreaks that come with it.
From traversing the forex world for the past several years, I have the first-hand experience, and I can comfortably talk about forex trading. I have lost money trying to figure out what the brokers do, how the system work, and the factors to consider while trading Forex.
Admittedly I want to tell fellow Kenyans that this is a good venture with conditions! It is too good to be ignored, but the conditions are too stringent to be ignored too!
One thing African forex traders are never told meticulously is in the part of risk exposure. All the major countries such as the USA, Britain, and Germany, have their forex brokers well regulated, reducing the risk exposure of the traders. The maximum leverage for most forex brokers falls between 1:40 and 1:100 in these countries. In African countries, the brokers offer up to 1:2000 leverage.
Today, I'm going to summarize this and show how to go about it.
Leverage in real world scenarios is like cattle tethered to a peg. There is a water bucket in the next 40m; there is a river infested with Crocs in the next 1000m, and within the radius of 2000m, there is a lot of green grass, but the cattle have to go through the river. The cattle are safe only within the 40m radius. This is the current situation in Africa and Kenya. And this is the way most of the uncouth brokers make their money. You deposit $100 into your account; the brokers allow you to trade a lot size of up to 5, total madness! This is mathematically impossible people! Your account is going to be wiped out in 2 seconds. Still, on it, the same deposit with a lot size of 1, total madness, your account will last a half-day or full-day if you are lucky.
Now, this is the advice for all traders in Kenya: when you open a real account, check the brokers' allowed strategies, some will take your money as you will not be able to close open your trade at the time you want once a position has been opened at certain times. Check the legitimacy of the brokers plus their regulators. Be cautious.
Secondly, if you have an amount less than $1000, I'll advise that you open a cent account and trade not more than three lot sizes in this account. Do not trade lot size of 1 with this amount in a non cent account! Suppose you manage to hit well above $7000, it's time to go to non cent account and trade not more than 1 lot size. When scalping, you can do up to 3 lot size, but it shouldn't stay for long!