Wednesday, June 7, 2023

Sylvia Muchai: What I learned after investing my money in forex

Sylvia Muchai is the founder of Sylvia’s Traders Lounge, a consultancy firm based in Nairobi that provides consultancy services on online foreign exchange and the financial markets such as commodities (soft and hard), energies, equities, stock indices, ETFs (exchange traded funds) and options trading.

I borrowed large amounts at the initial stages of my trading before I grasped the realities of how the forex trading business really works. Once you begin trading, the brokerage firm gives you access to debt equity or loan commonly known as leverage. This allows you to have a sizable investment in any tradable asset. I was not very familiar with proper risk management tools at the time.

This saw me blow up several trading accounts wiping out my entire trading capital and getting into unnecessary debt due to lack of proper education. I learned bitterly that the markets can be cold and ruthless. The financial markets, in particular online forex trading, do not favor the ignorant.

I needed to take a humble pie. I needed to take a break and commit myself to learning before investing again. It took me more than two years and a bold decision to focus on forex trading education before I could qualify myself as an online retail forex trader.

Retail forex trading is capital intensive if one is to pursue it as a sole business and rely on it as a professional trading full-time venture. Also, transitioning from one on one training and physical seminars to a virtually run business was quite challenging at the onset of the 2020 pandemic.

I was very curious about forex trading. This curiosity saw me lose $250 (Sh. 27,000) in my first live trading account within a span of less than a week in 2014. Naturally, I am a risk taker and my initial capital was meant to test out the waters before I immersed myself fully in the business.

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There was a forex education gap that existed in the country at the time. I didn’t know who could teach me the art and science of online forex trading. I started Sylvia’s Traders Lounge as a network of eight friends who met every Tuesday and Thursday night between 8:00pm and 9:00pm via Skype to discuss markets and how to approach trading.

In February of 2016, I saw an advertisement online. It was about a forex seminar that was being held at Pride Inn Westlands in Nairobi from a UK trader and invited three of my friends. We were sold the dream of working from home and becoming millionaires. But we didn’t know the time, skill, effort and trading capital it takes to actually become successful at trading.

I was in employment before I ventured out into forex trading. I worked as a finance assistant for a startup that was later shut down following the digital migration in the media industry in Kenya in 2015. Following that shut down, I decided not to immediately look for another job. I had saved up some money from my salary and this enabled me to transition slowly into my own business.

My greatest business moment has been seeing my business consult for reputable and licensed local and internationally stakeholders in the financial markets. These have included brokerage firms and local banks. Achieving this took more than five years, over which I had to establish a strong and lean team that believed in my mission and the financial education solution I was bringing into the financial markets.

I would put more emphasis on getting trained if I could start my forex trading journey all over again. I would look for a credible institution such as a bank that actually deals in online forex trading in their treasury department and have one of their top traders guide and coach me in the skill before embarking in a self-taught journey to becoming a retail forex trader. This would save me time and money that I lost early on in my trading journey.

Compounding is a powerful tool to save money. As a trader, I have realized that taking partial profits and re-investing them in my trading account has been a great avenue to save. This has grown my equity and enabled me to trade with a bigger capital size.

Constantly withdrawing money from your trading account can be detrimental to your longevity in the markets. Initially, I would feel nice to ask my brokerage firm to credit my bank account every time I hit a certain profit target in my profit and loss statement but then I realized I had to give more room and time for the capital to grow.

A version of this profile feature on Sylvia Muchai was also published in the Saturday Magazine. The Saturday Magazine is a publication of the Nation Media Group.

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