Forex trading requires brokers to execute your transaction as no one can directly deal with the foreign exchange market. Before we discuss the top 10 best forex brokers in Kenya, let us get an overview of what forex (FX) and how forex trading is done.
Forex (FX): An Overview
Forex is a global marketplace where trading is conducted in the form of exchanging currencies and currency derivatives. Foreign exchange is termed as forex in simpler terms. This market is even the largest of all the financial markets in the world because of its high daily turnover, which is around $6.6 trillion dollars.
The foreign exchange market has no physical location on the globe, rather than all the operations are conducted online only. The transactions are carried out on an electronic network with the help of intermediaries such as brokers, banks, and institutions. This market opens five days a week and 24 hours a day. It also opens on some of the holidays of the stock markets.
How Forex Trading Works?
Forex trading refers to exchanging of two currencies with each other. Traders buy a currency and sell another currency and this is done with the intention of earning profit. The trading is done in currency pairs and the exchange rate for a pair is determined by the foreign exchange market.
The first currency in a pair is known as the base currency while the second one in the pair is known as the quote currency. For example, if the exchange rate for GBP/USD is 1.3895, it indicates that one unit of GBP is $1.3895 dollars. In this pair of currencies, GBP is the base currency and USD is the quoted currency.
Trading in the forex market is done in predetermined lots of currencies. The forex lots are generally of three types that are micro, mini, and standard lots. A micro lot worth 1000 of a given currency, on the other hand, a mini lot worth 10,000 and a standard lot worth 100,000. Traders can trade in multiple of these lots according to their funds.
Forex Market Types
The transactions of the forex market are classified into three main categories that are:
A spot transaction is the one that is executed with the present exchange rate of a currency pair. It can also be said as on the spot transactions. Half of the daily transactions of the foreign exchange market are spot transactions only. If a person is going for an abroad visit then also the exchange of currencies is known as spot exchange.
Forex futures are known as currency derivatives in which a buyer and seller are obligated to complete a transaction on a predetermined price and date. The difference between prices is settled on the predetermined future date agreed by both parties.
Forward contracts also bind buyers and sellers to execute a transaction on a future predetermined date at a predetermined price. Although, the main difference between forwards and futures is that forward contracts are private contracts whereas futures are traded as per the terms of the foreign exchange.
Currency Pair Types
A forex currency pair can be determined according to the types of currency pairs defined in the foreign exchange market. There are three types of pairs, which are:
Major Currency Pairs
The most frequently traded and the most liquid pairs in the foreign exchange market are known as major currency pairs. These pairs have USD on any one side of them. Their trading volume is high because of the higher volatility in the prices.
Minor Currency Pairs
Minor currency pairs are also termed as major cross currency pairs. These pairs do not include USD in them, rather they involve currencies of strong economies in the world. These pairs also offer many trading opportunities, although they are not as liquid as the major pairs.
Exotic Currency Pairs
Exotic currency pairs are made with the combination of major currencies with the currencies of emerging economies in the world. They are not traded like the major and minor currency pairs. Hence, they have lower liquidity and profit-making opportunities.
Top 10 Best Forex Brokers in Kenya
Let us discuss the top 10 brokers that you can use while trading in forex. These brokers are rending the best services to their clients and have a convenient trading platform.
Oinvest is regulated by Financial Sector Conduct Authority (FSCA). It offers to trade in forex and several other options that are stocks, cryptocurrencies, indices, and commodities. Different types of accounts are offered by the broker and the highest leverage of 1:400.
New traders can also use a demo account along with a wide variety of educational material. It runs on a MT 4 trading platform that is easy to operate. Customer service of 24/5 is provided by the broker.
101Investing is a CySEC regulated broker offering a forex trading platform. Along with forex trading, traders can also trade stocks, commodities, cryptocurrencies, and many more. Choose the most suitable account according to your preference and a demo account is also available for traders.
MT 4 is the trading platform that allows access from the web, desktop, and mobile. Traders can take customer support 24/5 for more than 250 trading instruments. The maximum leverage of this broker is 1:30 only. Educational and analytical tools are available in a wide variety.
Capixal is another leading broker that only requires $20 as an initial deposit. It is a well-regulated broker running on the MT 4 trading platform. Traders can trade forex, commodities, stocks, and several other trading instruments.
Traders can choose among the three different account types offered by the broker plus a demo account. Enjoy high leverage of 1:500 and customer service of 24/7. Take advantage of quality educational material and research tools offered by the broker.
ABInvesting is a regulated broker that allows instant access to a huge number of trading instruments including forex trading. 1:500 is the leverage offered by the broker and traders can also access a free demo account. Apart from the demo account, the broker is having three different account options according to the preference of traders.
The trading platform can be accessed from multiple devices like a web browser, mobile, and desktop. Get customer support of 24/5 with a dedicated team. Use a wide range of educational and research material for better decision making.
TradeATF is a regulated broker that offers trading leverage of 1:400. Along with forex trading, traders can also enjoy stocks, commodities, metals, and other trading options. If you are a beginner take advantage of a demo account and learn the fundamentals of trading.
Traders can trade on the go with mobile, web, and desktop trading options. Customer support is available via different options such as telephone, email, and chat. Learn professional trading with a wide variety of educational material offered by the broker.
ETFinance is offering leverage of 1:500 and it is a regulated broker. The trading platform is MT 4, WebTrader, and mobile app that makes your trading experience easier. Choose from three different accounts at your convenience.
A wide variety of trading instruments are available along with educational material and analytical tools through which you can make the best decision. Dedicated customer support and a demo account are also offered by the broker to traders.
InvestLite is offering to trade with a minimum deposit of $250 dollars. The maximum leverage available is 1:500 and apart from forex trading, other instruments are also available for trading. Traders can opt among the three different accounts plus a demo account if needed by a trader.
The customer support team is available from Monday to Friday. A huge collection of educational materials, research, and analytical tools are offered by the broker. MetaTrader 4 trading platform is offered by the broker to traders.
HFTrading is a leading broker among all the forex brokers which is regulated also. Traders can enjoy trading with the high leverage offered by the broker. Select the most suitable account among the three accounts available with the broker excluding a demo account.
Trade with a variety of trading instruments such as forex, stocks, commodities, and many more. Get dedicated customer services via email, live chat, and verbal communication. Take advantage of flawless trading on the MT 4 trading platform with a huge range of research and educational material.
ROinvesting is a regulated online broker and it has three trading platforms that are MetaTrader 4, WebTrader, and Mobile App. It offers trading in various instruments including forex trading. Traders can choose among three different types of account or a demo account for a little warm-up.
High leverages are offered by this broker for trading. A wide range of educational material and analytical tools are available for trading analysis. Customer services are offered via email, live chat, and telephonic conversations.
More than 250 trading instruments are available with Brokereo along with forex trading. High leverage of 1:500 is offered by this broker to traders. It is regulated by CySEC and support for 24/5 is available for the traders.
Three different types of accounts are provided excluding a demo account by this broker. Take advantage of a huge variety of educational material and research tools that are required for trading. Two trading platforms are provided by Brokereo, which are WebTrader and Mobile App.
Forex trading has the potential to fetch great returns for your investments. Understand the market fundamentals and select the right broker among the leading forex brokers. Your broker should fulfil all your trading requirements. Traders can also compare the above-mentioned best forex brokers in Kenya and then choose the best according to the requirements.