Forex mini account
By admin on January 5th, 2009
Many people around the world is looking for entering the world of Forex trading because of its very high profitability
potential. But many of them also worry that they will lose their money. They want to start small. There is now Mini Account for people who want to start small. Although you start small, you can win big, you just need a few dollars and the right strategy to profit from Forex trading.
Mini Account uses a different leverage calculation than a regular (100k) account. Instead of trading full-size currency lots (100,000 units), you’ll trade in lots that are just 1/10 the size (10,000 currency units), which in turn greatly reduces the amount of money you risk in each trade you enter.
The characteristics of a Forex Mini Account are as follow:
- Minimum required account deposit = $300
- Recommended required account deposit = $2,000
- Traded in 10,000-unit currency lots. There is no maximum trading volume on the Mini trading platform.
- Pips in a Mini Account are worth, on average, $1. Pip is the smallest increment that a currency pair can move. For most currency pairs, a pip is a change in the fourth decimal place of the currency quote. For example, if EUR/USD is quoted at 1.6567 and it moves to 1.6568, it has increased by 1 pip. The value of 1 pip is calculated by the size of the lot that is traded. So, if you buy a standard lot of 100,000 EUR/USD at 1.6567 and it goes to 1.6568, a 1-pip move, then the value of your trade has increased by $10 (or 100,000 x 0.0001). Because Mini Account have smaller contract, the pip value is also smaller that is $1.
- The Mini Forex account offers up to a huge 200:1 leverage, this means that just a $50 margin deposit will allow you to trade lots worth roughly $10,000.
- Default Margin: set at 0.5% ($50 per mini-lot)
There is no downside to trading a Forex mini account, you will be enjoying all the benefits that full-size FX account holders enjoy. This mini accounts are ideal for a beginner forex trader to gain experience.
Beware, trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
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