Forex Trading Account
Getting started with online forex trading account is pretty easy these days. With just a small capital and an internet connection, you can open an account with one of the many online forex trading platforms in a matter of a few minutes.
There are various types of accounts, all with varying options and features. Here are some of the most common.
These are usually offered at no cost to enable newbie forex traders to practice and fine tune their skills. Demo accounts are usually full fledged just like the ordinary accounts, but rather than risk real money, the traders practice with virtual money.
While demo accounts are increasingly being used by forex trading platforms all across the internet to attract new traders, you should check whether the respective broker is in compliance with the applicable regulations. For instance, in the U.S. you should check to see that the broker is compliant with NFA regulatory standards.
The perfect trading accounts
Mini and micro accounts
These are the perfect trading accounts for newbie traders wanting to move beyond experimenting with virtual money. They allow the traders an opportunity to gain confidence while at the same time risking relatively low capital.
While mini accounts can be opened with as little as $1,000, traders can open a micro account for as low as 1$. Mini forex trading account can be run with a 10,000 units which renders their minimum fluctuation equivalent to 1$. A micro trading account on the other hand typically come with a size of 1,000 units which means that their minimum pip fluctuation is equivalent to $0.10.
Standard trading account
As the name suggests, this is the most common forex trading account. The traders usually have access currency lots to the tune of $100,000. This of course doesn’t mean that the traders will have to deposit a capital of $100,000 upfront.
Leverage of 100:1
At the leverage of 100:1 that is the most commonly used, a forex trader only needs to deposit $1000. Every pip is worth $10 and this means that a shift of 100 pips in a trading day rolls down to a total gain of $1,000 for the lot traded.
On the downside however, it follows that the risk involved is equally higher since a negative pip move by $100 also means total loss of $1,000.
Irrespective of which forex trading account you choose, you should first of all practice with forex trading before diving in head first. In other words, you should take the time to gain experience using virtual money typically provided before risking with your hard earned real money.
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