Forex trading is the new craze in town. The forex market is swamped with brokers, some of whom are regulated and there is a huge chunk of unlicensed and unregulated online forex traders that might pause a huge risk of users losing on their hard-earned coin.
The Central bank of Kenya has come out and published a notice to warn members of the public against dealing with unlicensed and unregulated online forex dealers and only deal with genuine and licenced financial institutions and entities. The CBK also asked the members of the public to be on the lookout and report complaints to the banking fraud investigations unit as most of these unregulated platforms can easily be found on google and apple store.
HOW DOES FOREX TRADING WORK
Online forex trading works similar to sports betting or live trading on a stock exchange. In forex trading, the catch is buying a currency that gains value and selling a currency that drops value. As simple as it sounds, there are aspects one has to look at keenly to determine how the currency market behaves. One is required to open an account and load their e-wallet with funds using payment options such as Visa Card, Neteller, Skrill or Master card
There is also an option for automatic trade where a trader rents a cloud server with a hosting service provider, activate the automated trading systems and let them trade on behalf.
WHO REGULATES FOREX TRADING
The Capital Markets Authority regulates forex trading. Under the regulation, brokers are required minimum capital of at least Ksh. 30Million to Ksh 50M. According to CMA its estimated about 50,000 people are in the business as of today but mainly using offshore platforms that are not regulated here in Kenya.