What 2020 has in store for Kenyans in Online Forex Trading
By Michael Kuchar | May 7th 2020
2020 is already halfway gone. Yes, I know we are still in
May, which is the 5th month of the year. But unless you are living on the moon,
you probably know that we have a global pandemic that is yet to be contained.
This pandemic has, as it were, taken up most of the first half of the year,
which effectively leaves us six months to rescue what is left of 2020.
Almost every sphere of economic activity has been shut down,
except the world of online trading which continues to thrive. This period has
seen all financial markets brimming with opportunities.
Bi-directional markets such as the online forex trading
market hold a lot of opportunity at the moment and will hold even greater
opportunities after COVID-19 has been contained. For Kenyans, there are a lot
of opportunities to get started in forex trading right now. Do not buy into the
schools of thought that say the forex market is too risky to invest in at this
time. Many financial fortunes were changed for the better in the period
immediately, trailing the 2008 global financial crisis. These were those who
understood market cycles and knew how to play the market both ways by buying
when they needed to and shorting when the time was right.
According to the TradingBeasts Forex trading in Kenya guide,
the popularity of FX trading was given a boost by the introduction of
regulation by the Capital Markets Authority. The entrance of the first local
forex provider into the market generated a lot of media buzz. This first
brokerage was not a 100% indigenous brokerage, but a subsidiary of a
Cyprus-based brokerage carrying a CIF license. A second player has since
entered the local market, but they are doing so at a time when offshore brokers
have had more of a foothold in Kenya than the local ones.
This article highlights what the rest of 2020 has in store
for Kenyans in online forex trading. So what lies ahead?
More Broker Scrutiny
the heart of the institution of forex authorization and licensing by the
Capital Markets Authority in Kenya is regulation. Kenya is coming from an
era where many local traders lost their money to fly-by-night operators.
Many of these were shadowy companies with unclear regulation or licensing
and worked with local partners, some of who were also doing things on
their own without the consent or knowledge of their principals. For
instance, it was not unusual to see an individual claiming to be a
representative of an offshore broker, and offering to manage funds for
clients without a track record or without any form of regulation. Cases of
such persons absconding with the money of their clients were rampant. At
this time, the Capital Markets Authority was in existence, but only
regulated the Kenyan Stock Exchange and brokers offering to trade in local
traders suffering such mishaps in the past and the CMA stepping up with
regulation, Kenyans can be sure that unregulated forex brokers will not
have a field day in the country. Even offshore brokers who step into the
market know they have to get their licensing sorted out before they come
or they will get nowhere.
Quest for Greater Forex Education
greater forex trading awareness, comes the clamour for forex education.
Forex brokers now know that forex education is no longer an optional bonus
but a necessity for getting and engaging new clients. Competition in
providing comprehensive forex education means that Kenyans who want to
start online trading will now be able to get access to top-quality forex
education content that can make a difference for them.
More Robust FX Market Due to COVID-19
world is at a critical juncture, and like it or not, the COVID-19 pandemic
has created immense trading opportunities in the financial markets. Many
currency pairs are trading in price ranges that have not been witnessed
before. To put it in another way, if the EURUSD was giving you a daily
trading range of 100 to 200 pips a day. All the forex market is asking is
this: do Kenyan forex traders have the skills and strategies to take their
own share of the COVID-19 opportunities in the forex market?
looks like it will be with the world for several months ahead. This means
that there will be lots of opportunities. Many brokers are already
reporting increases in new registrations as offline jobs, and opportunities
dry up. Online opportunities such as forex trading will continue to be
around for a lifetime. Therefore, Kenyans need to use this window of
opportunity that the increased volatility in the FX market has brought
their way to make money from the market.
Local Brokers Will Run Alongside Foreign Brokers
is true that CMA has regulated forex trading, but it cannot prevent
Kenyans from trading with offshore brokers. So Kenyans will see a
situation in 2020 where regulated offshore brokers will operate alongside
the two locally-based forex broker brands. So you still have a choice of
what brokers to use. Whatever your choice is, ensure the broker is
regulated and has a good track record. Considering that the oldest of the
local brokers in Kenya is only two years old, there are those Kenyans who
would still choose experience and track records over the location.
These are some of the things that 2020 has in store for Kenyans in online forex trading. Are you ready for them? Hope you are.
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