Yesterday the Capital Markets Authority said it would crack down on online forex trading (see P15).
Online forex trading has become increasingly popular in Kenya, especially with college students who think they are smart. But it is no different to betting on football matches. You are gambling. In the long run, you will lose.
Online forex trading is highly leveraged. You do not buy one US dollar and make a tiny loss or gain. Your one dollar, or Sh100, gives you an option on 100 dollars or more. Any loss or gain in forex movements is hugely amplified so it is very risky.
Local firms are being misleading when they get paid to 'teach' and assist Kenyans how to trade forex online. The forces that drive the world currency markets are largely geopolitical and to some extent random. Forex movements are not easily predictable or teachable.
The CMA can't close down the international forex websites but it should certainly prevent local online forex dealers from exploiting gullible Kenyans.
Quote of the day: "I used to train very hard. When the others players went to the beach after training, I was there kicking the ball."
Pelé
The Brazilian footballer was born on October 23, 1940.