Deep dive into crypto, forex trade

While Decentralised Finance (DeFi) is rising to become the “new oil”, cryptocurrency and foreign exchange (Forex) trading are the most popular. Job opportunities have been created for many youths, as many have been transformed from rags to riches within a short period. However, the industry has for long faced a backlash from youthful masses, with many people claiming that it has more scams than legitimate gains, a thing that has led them to be hesitant to join.

Forex trader David Manzi alias Kafuri FX, 25, says forex trading has become his full-time job, as he has grown into one of the most flourishing forex traders locally. Kafuri, who started trading in November 2020, reveals that the highest amount that he has ever made in a single day through trading is Sh1.5 million. With the little savings from his hawking, he recalls how he started trading with a capital of Sh800 and with time, after making some losses here and there, he managed to make profits of over Sh50,000.

“My highest loss was about Sh300,000, which I find normal because losses in forex are inevitable. As a trader, you are always supposed to be prudent at risk management to avoid big losses. In a month, I can make an average of Sh3 million depending on the market conditions. It can go up or below, given that profits and losses in forex are not fixed. The money earned from forex is absolutely clean money, even though the industry is faced with a lot of scams,” he says.

Kafuri’s advice to anyone with a wish to trade in forex is that they need to first invest their time in acquiring knowledge, so they could be able to trade by themselves.

Seeking knowledge

Cryptocurrency trader Frank Elijah Otieno alias States says as a broke college student from a poor background, he was desperate to redeem his family from the destitute state. He ended up in academic writing where he made his first Sh1million, before joining online trading.

“I didn’t make myself comfortable while in academic writing, but kept on digging much into the internet, networking here and there, and that’s when I came to learn of online trading. Some young men and women from countries such as South Africa and Nigeria were doing well in crypto and forex trading. That encouraged me to pursue the knowledge and skills needed in trading.

“I am happy to see other young people make a living and change their destinies through online trading and that’s the sole reason I founded Trade Cafe with my other team of expert traders in online trading that covers crypto, forex charting/trading and copy-writing,” says Frank.

He points out that the types of trading he particularly engages in are less risky and guarantee his returns on capital deployed for trading. “The fact that crypto is not regulated in various jurisdictions due to its nature as a new technology promising effectiveness, it’s here to stay according to me and I do believe in the blockchain efficiency. On scams and capital loss, being a professional in my field I believe it requires knowledge to easily identify a scam. On capital loss, personally I’m involved in a type of trading that guarantees high profits than the loss suffered,” he says.

Forex trader Samuel Mogaka Ondieki states that the biggest threat in the industry is scams. “I started trading in crypto in 2017, where I used to buy, hold and sell. Later, I started trading Peer-to-Peer (P2P), which opened me in a big way into crypto since I was dealing with another person on the exchange. That is when I learnt forex and became the first Kenyan to develop an Artificial Intelligence (AI) software that can trade and automate one’s trade. The trading robot won me a title and placed me among the top 100 African traders in Africa and I was awarded in Rwanda in 2022,” he says.

The legitimacy question

Ondieki says forex can make one rich or poor overnight. “The fact that people lack knowledge makes them wonder where that money comes from. Definitely, they will question the source because they don’t know. The secret behind my success in trading is that I do not use my savings to trade, rather I get money from other online business such as drop shipping, affiliate marketing, YouTube automation and selling trading robots, to put back on the market. Forex is not a scam, but the people who lead you there may not be the right people. So, do your research,” he advises.

With the trading industry seen as a male-dominated industry, Cecilia Wambui — a forex, crypto trader and digital marketer — sees no barrier, as she says many women are risk averse compared to their male counterparts.

“Trading is time-consuming and many women may not have the time or luxury to start learning. Personally, if I didn’t sit with guys who would demo trade forex and stocks all through campus, I wouldn’t be exposed to the basics. I thought that they were crazy and wasting time, but in hindsight, they were gaining experience, improving their edge and system, gaining discipline, understanding the market cycles and mastering their trading mindset, which as a collection, is important to have as a trader. Remember, trading is a ruthless endeavour. It can make or break you, and I know many women try, but they quit easily because it is hard to win. Perhaps, they don’t have the patience as men do,” she opines.

Enrolling more women

Cecilia has taken a step to get more women into trading through her YouTube channel (TraderC). She says the best way to encourage women to persevere through their trading journey is to get into communities where there are successful female traders.

“Also, it is important for women to throw out their emotions. Trading is 70 per cent psychology, that’s why you can be taught by the best traders in the world, but you can never be as good as them immediately because you constantly need to be working on your trading psychology. That’s why you hear traders say that they became profitable after years. Money has a lot of emotions behind it. As a trader, you have to be 100 per cent emotionless when it comes to the money market,” she reveals.

It has always been a challenge for many to tell the difference between crypto and forex trading. Yvonne Kagondu, a DeFi expert and the founder of Kenya Blockchain Ladies, reveals that the major difference between the two is that forex deals with fiat currencies such as dollars and shillings, while crypto deals with cryptocurrencies where anyone can succeed with the right skill set.

“I think both apply similar principles. So, one can start with any, but it takes time to be a good trader. Crypto is more profitable at the moment in my opinion. It’s a new market, and new markets tend to come with new opportunities that are not available in forex. Whereas forex is regulated, crypto is not, so it increases the risk and thus the reward. Anyone can succeed in crypto because it has higher risk and thus higher potential for returns,” she says.