The foreign exchange market is more like a virtual market whereby, the forces of demand and supply determine the rates of exchange of different currencies. These currencies are traded online via a third party known as a broker. Historically, trading currencies was reserved for multi-national corporations and well-financed investors, but this market has been opened up to the average investor (Investopedia).
Here in Kenya, the advent of forex trading has been constantly under watch for claims that over 50,000 people, including brokers, dealers and money managers, are mainly using offshore platforms that are not overseen by Kenyan regulators-Capital Markets Authority. There have also been claims of people who have been conned while dealing with unscrupulous dealers.
Tight regulations have been set by the CMA to try and mitigate the inherent risks faced by investors in their relationship with the online forex brokers. The new laws which were issued in the Kenyan Gazette Supplement No. 133 on 25th August 2017, requires that online forex brokers register a licence with the CMA upon fulfilling various conditions.
Besides the measures placed, forex trading is a better investment than bitcoin. It can’t be termed as an investment per se because the basic tradition of investment involves a waiting period of time as the money appreciates (or depreciates). Forex is largely short term. A trade can go for at least one minute to seven days at most. This kind of trading can be very lucrative and risky as well.
Rumours have it that it is a get-rich-quick scheme-NO. The minute you have such an attitude towards it, then you’re bound to fall. It takes strategic-thinking and deep analysis. You also need to be apt with the current happenings because volatilities and fluctuations both domestic and international in the market are the order of the day. The minute the President of the Free World posts his tweet on the ‘interesting’ things he thinks about, the currency moves (either appreciates or depreciates).
Another thing, follow forex trading experts. When I say experts, I mean EXPERTS not futurists. Mark the difference. Experts are those guys who have been trading for a long time. And for this reason, they have mastered the skill, probably after failed attempts, you never know their background. There is usually a margin of error. What is actually best in this case is not to accept truly their decision on whether to buy or sell, but to know the reasoning behind it. Once you get this, trust me, bro, it’s a wrap!
Finally, always have a strategy and a plan. I know my friends betting on Sportpesa and Betin, on most occasions, do not comprehend this. By failing to plan, you are planning to fail. Have you ever attended a wedding planning committee? The plans are usually laid down to the people then the financial strategy is determined. That is how Forex works. You should have an entry and an exit strategy.
Tools are available at your fingertips. Be it indicators, be it auto-trading, be it stop-loss and take-profits, name them. These tools are there to help you. They have been tested over and over again.
If you don’t know how to analyse forex charts, make a point of doing so. With all these in mind, just remember, most people have the will to win, but few have the will to prepare to win.