Forex trading in Kenya: How it works and how to start

There are an estimated 14.5 million forex traders worldwide, with approximately six million active day traders. In Kenya, forex trading is a popular way to speculate on global financial markets. At Exness, we support CFD (Contract for Difference) forex trading in Kenya through our reliable platform, which was built with both beginners and experienced users in mind. 

In this guide, we will explain everything you need to know about how to do forex trading in Kenya, including forex trading basics, why it’s growing in popularity among Kenyans, the legality of forex trading in Kenya, how to get started with platforms like Exness, and much more.

What is forex trading, and why is it popular in Kenya?

As highlighted above, forex trading in Kenya has gained significant popularity due to its accessibility, even for complete beginners. 

Understanding the basics of forex

When you trade forex, you’re essentially exchanging one currency for another, such as selling Kenyan shillings and buying US dollars. The goal is to make money from small changes in varying exchange rates. So, if the exchange rate moves in your favor, you make a profit.

The global forex market is the biggest financial market in the world, and trillions of US dollars are exchanged daily. Unlike the stock market, forex doesn’t have a central exchange, so it is open 24/5. As it runs around the clock, forex trading is perfect for both full-time and part-time traders in Kenya.

Forex is also highly accessible for beginners and doesn’t require a large amount of capital to get started. At Exness, we make it easy to get started, thanks to small minimum deposits, easy-to-use platforms, and flexible leverage. You can also access tools like a demo trading account to learn before trading real money.

Why more Kenyans are exploring forex trading

Forex trading is on the rise in Kenya and the continent as a whole. The appeal of Forex trading in Kenya stems from its accessibility, as anyone with a computer or even a smartphone can start trading. 

Widespread mobile phone usage, coupled with payment systems like M-PESA has also made depositing and withdrawing funds easier for forex traders. At Exness, we’ve integrated M-PESA for deposits and withdrawals in Kenya, allowing Kenyans to trade forex at any time, even in areas without bank branches.

In addition to its flexibility and ease of use, forex trading in Kenya is on the rise thanks to its potential for sizeable returns, even for those who trade part-time. However, it’s worth remembering that trading doesn’t guarantee a consistent or predictable income, and the trader’s capital is always at risk.

What is CFD forex trading?

CFD (Contract for Difference) forex trading, as offered by Exness, is a way to trade currency pairs without owning the actual currencies. CFDs let you speculate on whether a currency pair will rise or fall in value. You can profit from both upward and downward moves, and with leverage, you can open larger positions using a smaller initial deposit. It's a flexible way for traders to access the forex market.

Is forex trading legal in Kenya?

Yes, forex trading and CFD forex trading are legal in Kenya—provided that brokers follow the regulations set by the Capital Markets Authority (CMA). In this section, we’ll break down the role of the CMA in ensuring that forex brokers operate transparently in order to protect traders, as well as risks and key considerations to be aware of before getting started.

CMA and regulation overview

The CMA is the primary regulator of all financial markets in Kenya, including the forex market. It exists to ensure that brokers adhere to strict guidelines to protect investors and maintain market integrity. It also bears the responsibility of safeguarding traders from fraudulent brokers and unfair practices. Given that Exness is CMA-regulated, you can trade with confidence knowing that we adhere to these high standards of fairness and transparency.

When trading via CMA-regulated platforms like ours, forex traders in Kenya can trust that their funds are handled fairly and safely, reducing risk and almost eliminating the potential for fraud. Traders also have peace of mind when trading with platforms like Exness, knowing they are operating within a legally protected environment.

More broadly, CMA regulation of forex trading in Kenya helps maintain market stability, ensuring that brokers follow ethical business practices. This means that local traders can be confident when participating in the forex market, knowing that a regulatory body is actively monitoring the market for transparency and fairness.

Risks and considerations

Before getting started with forex trading in Kenya, it’s important to be aware of the risks involved due to the volatility of currency markets. Prices can fluctuate rapidly, meaning that traders can experience both gains and losses quickly. 

While the potential for profit exists, forex traders must understand that they may also lose their capital. This is why Exness provides handy resources, such as educational support and risk management features, to help traders mitigate risk.

Leverage is a powerful tool in CFD forex trading, allowing traders to control a larger trade with less capital. However, leverage increases exposure to potential losses as much as it does to potential gains. Without a proper understanding of leverage and how to use it responsibly, traders, especially those new to trading, are more vulnerable to losses.

There are also emotional and psychological risks to forex trading. For example, forex trading can be stressful, and emotional decision-making can lead to financial losses. You should always approach trading with a clear plan and discipline to avoid impulsive decisions.

As noted above, our demo accounts and educational resources allow new forex traders to practice and build confidence before risking real money.