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6 steps to get started with trading forex in 2025: A guide for Kenyan traders

Photo credit: HF Markets

Forex trading has become an increasingly popular avenue for investment and income generation in Kenya. With advancements in technology and growing accessibility, more Kenyans are venturing into the world of foreign exchange trading. However, for beginners, the forex market can seem daunting.

This guide will walk you through the essential steps to get started with forex trading in 2025 and provide tips tailored to Kenyan traders, such as creating an account with HFM, one of the best forex brokers in Kenya.

Understanding forex trading

Forex trading, or foreign exchange trading, involves buying and selling currencies to profit from their price fluctuations. The forex market is the largest and most liquid financial market globally, operating 24 hours a day, five days a week. Traders speculate on currency pairs, such as USDKES or EURUSD, to capitalise on price movements driven by economic, political, and social factors.

In Kenya, forex trading has gained traction due to the proliferation of internet access, smartphones, and a youthful, tech-savvy population. The availability of online brokers catering for African markets has also made trading more accessible. However, before you make an account with HFM or another broker, you need to learn the basics.

Step 1: Learn the basics

Education is the foundation of successful forex trading. Before you start trading, take the time to understand how the forex market works, the terminologies involved, and the tools you’ll need. Resources such as online tutorials, eBooks, and free courses offered by brokers are excellent starting points. For Kenyan traders, local forex trading communities and forums can also provide valuable insights and support.

Familiarise yourself with concepts such as pips, spreads, leverage, and margin. Understanding how these elements interact will give you a clearer picture of how profits and losses are calculated. Additionally, keep in mind that forex trading involves risk, and losses are a natural part of the learning curve.

Step 2: Choose a reliable broker

Selecting the right broker is one of the most critical decisions you’ll make as a forex trader. A broker acts as an intermediary between you and the forex market, providing the trading platform, tools, and access to currency pairs. For Kenyan traders, choosing a broker regulated by reputable authorities such as the Capital Markets Authority (CMA) or internationally recognised bodies is essential.

Look for brokers that offer user-friendly platforms, low fees, and excellent customer support. Many brokers also provide demo accounts, allowing you to practice trading with virtual funds before risking your money. Take advantage of this feature to gain hands-on experience.

Step 3: Set up your trading account

Once you’ve chosen a broker, the next step is to set up your trading account. Most brokers offer an easy registration process that involves providing your personal details and verifying your identity. Ensure that the broker supports payment methods convenient for Kenyan traders, such as mobile money (M-Pesa), bank transfers, or credit/debit cards.

Start with a basic account and a small deposit to minimise risks. Many brokers allow you to begin trading with as little as $10, making it accessible even for those with limited capital. As you gain confidence and experience, you can gradually increase your investment.

Step 4: Develop a trading plan

A trading plan is your roadmap to success in forex trading. It outlines your goals, strategies, and risk management rules. Without a plan, trading can become impulsive and emotionally driven, leading to poor decisions and losses.

Your trading plan should include the following elements:

  • Trading goals: Define what you aim to achieve, whether it’s generating a secondary income or growing your investment.
  • Risk management: Set rules on how much capital you’re willing to risk per trade. A common guideline is not to risk more than 1-2 percent of your trading capital on a single trade.
  • Trading strategy: Decide whether you’ll focus on technical analysis (using charts and indicators) or fundamental analysis (studying economic events and news).
  • Time commitment: Determine how much time you can dedicate to trading. Whether you’re a day trader or a swing trader will influence your approach.

Step 5: Practice with a demo account

Before trading with real money, practise with a demo account. Most brokers offer this feature, allowing you to trade in real-time market conditions without risking your funds. Use this opportunity to test your trading plan, experiment with different strategies, and gain confidence in your decision-making process.

Practising with a demo account also helps you familiarise yourself with the trading platform and its features. Take your time to learn how to execute trades, set stop-loss orders, and analyse charts effectively.

Step 6: Start trading with real money

Once you’re comfortable with your trading plan and strategies, transition to live trading. Start with a small amount of capital and focus on executing your plan consistently. Avoid the temptation to overtrade or chase losses, as this can lead to emotional decision-making and increased risk.

Monitor your trades closely and keep a trading journal to record your performance. This journal will help you identify patterns, strengths, and weaknesses in your approach, enabling you to refine your strategies over time.

Key considerations for Kenyan traders

Kenyan forex traders face unique opportunities and challenges. One significant advantage is the widespread use of mobile money services like M-Pesa, which makes deposits and withdrawals convenient. Additionally, Kenya’s growing fintech ecosystem and regulatory framework provide a supportive environment for traders.

However, it’s essential to remain cautious about potential scams and unregulated brokers. Always verify the credentials of a broker before opening an account. Look for reviews and recommendations from trusted sources to ensure you’re dealing with a legitimate provider.