To easily explain how forex trading works we will give you a simple example. Let's consider that you bought 10, US Dollars in January at the rate of You would have gotten exactly 1 Million Shillings and made a profit of 92, Shillings in six months, since you bought the dollars cheaper than you sold them.
This is how you make money by trading currencies. In the above example you probably saw that you needed 10, dollars to make a profit of about 1, in six month. That's a lot of money and a lot of time, but don't worry, there are ways to overcome this issues very easy. Trading forex is done through a forex broker. The broker is a specialized company that creates the perfect environment for traders to take advantage of the currency fluctuations in no time.
Opening an account with a forex broker will allow you to trade on the international forex markets with huge amounts of money and make profits much faster.
How is that possible? Forex brokers offer leverage in order to allow their clients to trade high amounts of money. A broker that gives you a leverage of 1: Why is the broker allowing this?
Because he knows currency markets move very slow, and in order to be able to make significant profits in short intervals of time you need to trade with lots of money.
Here is another example to explain why the broker gives you leverage. In order to buy 10, Euros you need to pay 11, US Dollars. Let's say a trader buys 10, Euros through his forex broker at the above mentioned rate, and two days later sells them at 1. This is why the broker is willing to allow the trader to buy 10, Euros while depositing only dollars.
In the worst case scenario when the trade goes bad and the loss gets to dollars the broker will automatically close the trade and limit the loss to the total deposit. To make a long story short, leverage is given by the brokers in order to help traders make bigger winnings at the risk of higher losses in shorter times.
That means, trading more. The more you trade, the better it is for the broker, because of the so called 'spread', which is the difference between the buy and sell price of each currency pair.
The best part is that forex spread are very low because competition among forex brokers pushed them to lower the spreads to be more attractive to clients. Unfortunately there are no reliable forex brokers in Kenya right now, so the only option Kenyan traders have to profit from the forex market is to use an offshore broker a broker from a foreign country.
Luckily for us, there are many international brokers that accept traders from Kenya and where you can easily deposit and withdraw money. You can open an account online in less than five minutes and deposit money with your debit card or other online payment methods such as Skrill, Neteller, Webmoney, Cash U, Paysafecard and many more. Of course, you can also deposit with bank transfers if you want to make larger deposits or withdrawals. After checking the largest forex brokers in the world I have selected the ones that are most friendly with Kenyans and have the best trading conditions as well as the most accessible deposit and withdrawal methods.
All of them offer high leverage. They also have plenty of educational material to learn more about trading forex and how to make money trading forex online. How does forex trading work? The best forex brokers for Kenyans are:More...