The ability to make a quick bundle of cash in minutes while in the comfort of your home is something that can only be done by tech gurus and corrupt government officials. Globalization and the advent of technological developments have challenged that notion and virtually made it effortless to make money at home. As long as you have a stable internet connection and a computer, you are good to go. Forex traders, Tech coders, Freelance journalist/writers, and even entrepreneurs can conduct their business through online marketing platforms. In our African context and, more particularly, our Sudanese society, this new way of making money or working from home is a completely new concept. Covid-19 pandemic and the sharp deterioration in our economy has made people question the conventional methods of making money. That is where Forex trading comes.
Forex trading is the exchange of countries’ currencies in the foreign exchange markets. Companies engage in it to acquire hard currencies to; purchase goods, governments, focus on it to monitor the budget deficit and at times be able to adjust interest rates as well as treasury yields, while Individuals engaged in it to acquire hard currencies to purchase foreign goods to budgeting for holidays and travel. This market comprises foreign financial institutions (e.g., Goldman Sachs), domestic institutions like (e.g., Equity bank), and individual retail traders like you.
Forex is s scam! And understandably so, because the ability to make money without an effort only happens in scams like pyramid schemes and Dogy cryptocurrencies. However, I am writing this article to dispute that. FOREX trading has existed for over two decades now. It is the biggest financial market in the world, with an estimated worth of 5 trillion dollars. We have heard of success stories from George Soros, who made a billion dollars shorting the pound in the ’90s to the Jordan Belfort in the Wolf of Wall Street. These tales and phenomena help reaffirm that forex trading is indeed a profitable business that can make one million dollars in a much shorter period than other conventional means. However, forex does not come without its share of risk. To become a retail trader, one has to learn and plan the art of trading. Since the forex market centers on economic activity, one must focus on and understand the factors that move and shape foreign exchange. You don’t have to have a degree in finance or economics per se. Still, you have to be familiar with terms like Interest rates by central banks, the budget deficit in the balance of trade, inflation and employment rates in a country, and how other factors like wars and political decisions affect economic activity. Like all crafts, you get better with time and practice, and forex is no stranger to that. No industry can quite sum up the term ‘the more you learn, the more you earn”. Forex trading will also need you to be able to read mathematical charts and understand terms like leverage and technical analysis.
Forex trading is a zero-sum game, meaning to make profits. One has to decipher the effect of economic events toward the trajectory of the economy and an understanding of investor sentiment and psychology. In the forex, there will always have to be a loser and to evade such a predicament, you will have to have to learn and have a trading strategy and money from which to trade. For example, If the Ministry of Labour releases an employment job report. It will lead to a flurry of economic activity. A strong Jobs report will signal that more people have jobs, thus purchasing power, which increases company sales and profit. That will lead to economic growth and a strong currency. However, inflations might rise in the long run, thus ensuring central banks increase interest rates to contract the economy and hedge of a recession. With a good understanding of finance, you can be much better off understanding the effects of economic events on economic activity and thus trade and make profits.
Forex trading in Kenya is a new concept. Scams have plagued the Kenyan forex industry. People are hoodwinked by fake traders who promise quick returns in a short period. However, with the incoming of the capital markets authority ( CMA) director Mr. Wycliff M. Shamiah, new regulations have been implemented to safeguard people’s money. CMA is the regularity authority that manages the Capital(Stock) markets in Nairobi. For one’s money to be traded by other individuals, the rules stipulate that the individual has to have a money manager’s license before trading. A legal agreement has to be made. Currently, the only authorized money market traders in Kenya are Standard Investment bank (SIB). To be a retail trader, however, was much more difficult. Kenyans did not have regulated Trading platforms, so most people used to trade with oversees platforms like MetaTrader and others. However, that proved to be a hassle because Kenyans could not get any respite from the authorities if their money goes missing. However, the CMA has regulated home-grown forex trading platforms that traders can use with limited spreads and low deposits from as low as 100$ to 500$. The regulated forex trading platforms in Kenya are FX Pesa, EGM securities, and Pepper-stone markets. Be sure to approach those institutions if you want to trade safely.
In conclusion, forex trading is a market that has been severely under-utilized in our African context and, more specifically, the Sudanese market. The lack of hedge funds or investment banks in juba has further made it a difficult industry to approach. I am not proposing that forex trading will make you a millionaire, but it is a skill worth learning and can earn you money as you focus on your craft; others can make it a full-time job like they do at Wall Street banks. Certainly, it is not an easy skill to learn, you will have to devote time and effort, but without a doubt, it will be worth it. Besides, life is a learning journey, and if you are not dead for the love of god Trade!