Best FOREX Brokers in Kenya for 2024

• Regulatory oversight is crucial; your chosen broker should be governed either by Kenya's Capital Markets Authority (CMA) or another globally respected regulatory body.
• Competitive fee structure: Selecting a FOREX broker with competitive fees is crucial. Fees can impact your trading outcomes and profitability.
• Diverse financial assets: Your broker should offer a broad range of financial assets for trading. Understand the benefits of having access to multiple markets and instruments.
• Responsive customer service: Prompt and efficient customer service is vital. Quick response times and knowledgeable support teams can enhance your trading experience.
• Comprehensive research tools and educational resources: Having access to research tools and educational resources is crucial, especially for new traders.

With so many choices out there, it's hard to select the best trading platform in Kenya. In this case, we've done the work for you. Here is a summary of each of the top brokers according to specific criteria, along with their pros and cons:

1. ICM - Capital 91.10: Best Deposit and Withdrawal Broker

2. Tradeview - 90.00: Trusted broker that offers very low trading costs as well as comprehensive financial literacy materials for its clients.

3. XTB - 85.55: Best Customer Service Broker

4. IG - 85.45: Best Regulations Broker plus Convenient Platform

5. Saxo Bank - 80.09: Excellent Private Trading Platform

6. CMC Markets - 80.07: More than 9,000 Assets

7. ThinkMarkets - 80.05: Aimed at the Audience of Traders

Regulation and Licensing in Kenya

The Capital Markets Authority (CMA) is the primary financial regulatory body in Kenya. The regulator opened its doors in 1989 and is responsible for supervising, licensing, and monitoring the activities of firms in the financial sector. The CMA is an independent regulatory body that guides the financial services sector according to asset allocation. 

An interesting feature of FOREX trading in Kenya is that even though it is required by law that all Kenya FOREX brokers be registered by the CMA, this does not always happen in practice. In 2018, the CMA embarked on a drive to increase the number of regulation applications. Results have been slow. As of 2023, only nine non-dealing desk brokers operating in the country are formally regulated by the CMA. 

On this evidence, the CMA is not effective at controlling unregistered brokers. As a FOREX trader, be sure to check that your chosen broker is also regulated in other major economies. The Financial Conduct Authority (FCA) in the UK and the Cyprus Securities and Exchange Commission (CYSEC) are two of the best regulators in the world. If you want to read more about some of the best-regarded regulators, read our article on regulation here. 

As we have said, as someone resident in Kenya, choosing a well-regulated broker isn't merely a matter of preference—it's a protective measure. When a broker is under the watch of a regulator, it undergoes stringent assessments to ensure transparency, fair trading practices and your financial security. Opting for an unregulated broker brings with it significant risks.

Leverage

Stop Out and Margin

As a FOREX trader, it's crucial to understand the most important terms you'll encounter to avoid going into a negative balance. One of these terms is "stop out," which refers to a situation where a broker automatically closes some or all of your open positions to prevent your account from going into a negative balance. 

This is especially relevant for traders using leverage in a poorly -regulated market. The stop-out level is typically expressed as a percentage, representing the margin level at which the broker starts to close out open trades. Here are the three most common stop-out levels:

0% Stop-Out Level: 

At this level, when the margin level of the account drops to 0%, the broker will automatically close all open positions. This is the most aggressive stop-out level, and it gives no room for your positions to recover, even if the market turns in your favor immediately after reaching this level.

50% Stop-Out Level: 

Here, if the margin level drops to 50%, the broker will start closing out positions. It offers a bit more flexibility compared to the 0% level. The broker will typically close the most unprofitable positions first, and if that's not enough to bring the margin level back above 50%, more positions will be closed until the proper level is achieved.

100% Stop-Out Level: 

A 100% stop-out level means that when a trader's equity equals the margin required for the open positions, the broker will start closing those positions. It's important to know that this is similar to the 0% level, but might be worded differently based on broker terminology.

Stop-out procedures are meant to protect you from negative balances. However, they can lead to significant losses in volatile markets if positions are closed automatically, especially if the market quickly reverses after the stop out. As such, using protective measures, like stop-loss orders and not over-leveraging, is always a good idea.

Commissions and Fees

Trading fees are not always easy to monitor. Be sure to check how these fees compare with other brokers:

Spreads: In FOREX trading, a spread is the difference between the price at which a trader can buy (ask) and the price at which they can sell (bid) a currency pair. The spread can be categorized into two main types: fixed and variable.

Fixed Spreads: As the name suggests, fixed spreads remain constant regardless of market conditions. They don't change during the day and are set by the broker. Some traders prefer fixed spreads because they provide predictability, especially during times of high market volatility.

Variable Spreads: These spreads fluctuate based on market conditions. During times of low liquidity or high volatility, variable spreads can widen. However, during times of high liquidity and normal market conditions, the spreads can be very narrow. This type of spread is a direct reflection of market supply and demand.

Why do they differ?

The main reason they differ is due to their reaction to market conditions. Fixed spreads don't react to the market, giving traders a consistent spread cost. On the other hand, variable spreads can offer lower costs during normal market conditions but can widen and become more expensive during volatile times.

Example of Good vs. Worse Spreads for EUR/USD:

A good spread for the EUR/USD currency pair might be around 1.4 pips. This means that if the bid price is 1.1000, the ask price would be 1.10014.

A worse spread could be significantly higher, let's say 3.0 pips or more. In this scenario, if the bid price is 1.1000, the ask price would be 1.1003.

Traders always prefer narrower spreads because the cost of entering and exiting a trade is lower. However, it's essential to consider other factors, like the broker's reliability, platform features, and overall trading conditions when choosing between brokers offering different spreads. This article explains more about this important concept.
Commission: This is nothing more than the service charge that brokers require for carrying out transactions on behalf of their clients.
Rollover fees: When you leave a trade open overnight, the broker normally charges a rollover fee for the facility of holding your trade open for that period. This is because they assume the risk of the market changing adversely.

Withdrawal and Deposit Fees: Some platforms might charge fees for depositing or withdrawing funds. Pay attention to this. It's important to know these and any associated limits or conditions.

Subscription or Inactivity Fees: Certain platforms have monthly charges or fees for inactive accounts. Ensure you're aware of these potential costs.

Trading Platforms, Tools, and Features

When choosing a trading platform, you should consider a range of features that cater to both novice and seasoned traders. Here are some elements to keep in mind:

• Shariah-compliant accounts: Roughly 10% of Kenyan traders are practising Muslims. If this is you, there should be access to a swap-free account that is consistent with the dictates of Sharia financial law.

• Customization and user interface: Traders should be able to customize the platform according to their preferences, allowing them to set up their trading environment precisely how they want. We find that the products from the MetaTrader suite, especially MT4, offer excellent features for this purpose.

• Technical analysis tools: The platform should have robust technical indicators to help traders make informed decisions.

• Performance and reliability: Beginner traders especially need a platform that operates seamlessly with minimal downtimes or glitches. This ensures a smooth trading journey, allowing them to focus on market movements rather than technical hiccups.

• Platform accessibility: A top-notch trading platform should offer flexibility in terms of access, whether it's web-based or a downloadable application.

• Risk-management tools: Trading inherently comes with risks, and a high-quality platform should provide instruments that allow traders to set stop-losses, take-profits, and other crucial order types.

• Learning and educational resources: The best brokers will offer platforms that are not only intuitive, but also come with tutorials, guides, and responsive customer support to assist traders in navigating any challenges they might face.

Tradable Assets and Instruments

Online trading offers a wide range of financial instruments, each with its own opportunities and challenges. Here are some of the most common:

• FOREX: This type of trading involves buying and selling currencies from different countries on the foreign exchange market with the goal of making a profit. This is done through a broker with an online platform, like MT4 or MT5. FOREX brokers provide tools to traders for executing buy-and-sell orders in the currency markets.

• CFDs: CFDs allow traders to speculate on the future market movements of an underlying asset without actually owning or taking delivery of the asset. CFDs are traded on margin, meaning the broker allows investors to borrow money to increase leverage or the size of the position to amplify gains.

• Equities or stocks: These represent ownership in a company and trading them involves buying and selling shares of publicly traded companies.

• Commodities: Items of value, such as gold, oil, wheat, and coffee, can be traded through a broker or online trading platform.

• Indices: These are a measure of the performance of a group of stocks or other assets. Trading indices involve buying and selling a basket of stocks or other assets that make up the index. Some key international indices include the UK 250 and the Germany 40.

• Bonds: These are debt securities issued by companies or governments to raise capital. When you buy a bond, you are lending money to the issuer, who promises to pay you back with interest later.

• Options: Options are contracts that give the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price and time.

• Futures: These types of contracts obligate the buyer to purchase an underlying asset at a predetermined price and time in the future. This is done through a broker or online trading platform.

Payments, Deposits, and Withdrawals in Kenya

FOREX Trading Customer Service

• Quick resolution of issues
• Educational support
• Assistance with queries during volatile markets
• Account security
• Customized advice (although not all customer service desks offer this)
• Technical assistance
• Regulatory compliance queries

Technical Aspects of the Broker’s Website

Ask Other Traders on Our Network

Our panel of experts has determined that ICM’s ECN account offers unmatched low fees for entry level and expert traders alike.

1. The FOREX brokerage firm cannot recommend a buy or sell.
2. The FOREX brokerage firm must not provide price or market expectations (rise/fall);  
3. The FOREX firm cannot control your financial dealings (deposit/withdrawal);
4. The FOREX brokerage firm should not “manage” your portfolio under any circumstance.
5. The FOREX brokerage firm cannot grant a client a bonus unless clear terms are guiding it beforehand.
6. The brokerage firm must not use bank accounts not under its name; and
7. FOREX brokerage firms cannot have or offer the service of account managers.

Unfortunately, Kenyan traders are vulnerable to trading scams and fraud by virtue of the fact that it is easy for unregulated brokers to onboard Kenyan customers. While Kenya’s retail investment community is growing, it still features large swathes of brand-new entrants who frequently end up as victims of scams. The CMA is largely toothless when it comes to bringing non-compliant brokers to book.

As mentioned, in 2018 the regulator warned Kenyans against engaging in online foreign exchange trading through platforms of unlicensed entities, as they risked losing their investments because the law could not protect them. To protect yourself from scams, you are advised to conduct your own research on the broker you choose. It does not mean that an unregulated broker is automatically out to swindle you, but you are more vulnerable with this type of broker.

Will Your Money Be Protected if Your Broker Becomes Insolvent?

The team at Arincen collected more than 120 pieces of data covering more than 100 licensed FOREX companies. Data collection was done in three ways:

1. Companies’ websites.

2. Other websites that have ranked FOREX companies.

3. A survey questionnaire (referred to here as Survey “1”) was sent to the companies invited to participate in the exercise. We have identified 13 criteria for our assessment, each containing several aspects and carrying its relative weight. These include licensing, deposits and withdrawals, number of assets, etc.     

Afterwards, we validated the data by:

1.  Registering with FOREX companies as a secret shopper and/or as Arincen.

2.  Survey number “2,” in which we asked these companies’ customers for important feedback and experience.

The next step saw us evaluate and rank each company, relying on the demanding work of 15 Arincen employees. We were careful in ensuring the most accurate assessment possible, including considering different languages, as well as the various mobile-app operating systems, e.g., Apple, Samsung, etc.

To add credibility to our research project, we sent a final and third survey (referred to here as Survey “3”) to enable participating FOREX companies to evaluate our research and whether it accurately reflects the realities on the ground. We were fortunate enough to receive a mark of 9.9 out of 10! We have kept to a minimum the margin of error, which stood at a measly 1%. To learn more about how we came up with the evaluation, please click here.