Over 90% of the Kenyans who start trading forex get their accounts wiped out in less than six months. However, you do not have to become part of this statistics. You can trade forex in Kenya and become as successful as the other 10% of expert forex traders in Kenya.
However, for that to happen, there are some fundamentals of forex trading that you have to keep in mind:
Currency Trading is not a get-rich-quick scheme
Sorry to break your heart, but if you are looking to get into forex so that you can retire at thirty, you couldn’t be more wrong.
Forex trading is a skill, and it takes a lot of training, time and persistence to be profitable in the trade. The truth of the matter is that if you are just getting into the trade, you will lose more trades that you will win. This is why I highly recommend that you trade on a demo account for as long as it takes you to return some profits.
If you do not have a forex demo account, click on this link to open one right now.
Focus on only one or two currency pairs
Trying to be a jack-of-all-trades (pun intended) is the easiest way to wipe out all the capital you have invested in forex trading.
Pick one or two currency pairs, study them until you understand how they are affected by prevailing market conditions. Practice dealing them on your forex demo account.
It is overwhelming to keep tabs on all the major seven currencies that are commonly traded on the forex market.
If you are going to pick one of the major currencies, go with the EUR/USD. It offers the best spreads, which will cut down on the price you pay to get into a trade. However, since the currency is highly traded, it is highly volatile and you will need to be more savvy when trading it.
Follow Financial News
As a beginner in forex, you will mostly be using technical analysis to get into trades. This does not however mean that you shouldn’t keep tabs on the news affecting the forex market.
Trading forex in Kenya without a clear picture of what news is being released and how the news is affecting the market is a recipe for disaster.
Mostly, immeaditely, news is released, the market tends to be very volatile, and it is advised that you wait 15 minutes after the break of important news before you place a trade.
Now, assume that you are not aware of when news is released? Do you see why it is important to keep tabs on political and economic news from around the world?
Follow the Analysis of Forex Trade Experts
There are guys there who have been trading forex since God-knows-when. They are experts in what they do, and they are generous with their opinions.
Do not shy away from following them on Social Media, Youtube, websites and forums.
While reading the analyses from forex trade experts, write down what direction they are predicting the market will go and the levels they have predicted to be the key resistance and support points for the day for the currency you are following.
Some of the best places to find daily expert opinion about the market include:
Always Have a Trade Strategy and Plan
By failing to plan, you are planning to fail.
That is some deep ancient wisdom right there. Forex trading is not gambling. There are indicators and signals that clearly point where the market is headed. Make use of these.
More importantly however, never enter a trade without a strategy.
Before you make a decision to go long or short, you should clearly have an entry and exit strategy. How much profit do you want to make from the trade?
What loss can you tolerate on the trade?
Place your take profit and stop loss positions, and stick to them. Do not get greedy and do not let fear get the best of you.
If you do not know how to analyze forex charts, make a point of taking a training course.
For more information on forex trading, or how I can help you, visit the official FX trading blog.