Forex Micro Accounts
Mini Forex accounts is another term for a Forex brokerage micro account, which allows the client to take part in trading Forex with a much smaller account when compared to the “normal” Forex accounts.
The FX mini account is made possible due to the fractional trading sizes, with 1 mini Forex lot being a fraction of 1 actual lot in the interbank foreign exchange market. Because of this, the account size and margin requirement can be fractional in size as well.
Trading with Forex micro accounts can be a great learning curve. Because the Forex trades placed with FX micro accounts are placed outside of the interbank foreign exchange market, due to their size, the market maker for the mini trading account lots is normally the same brokerage firm that you have the mini Forex account with.
Luckily, because the Forex brokerage can hedge risk safely in the interbank market, they can normally also offer comparative market prices and comparative spreads compared to the actual Forex markets. So if you are considering FX account opening, why not open a micro account?
However, you will find variations in rollover rates. Mini Forex and Forex rollover rates are paid to or subtracted from a Forex account held overnight, which will affect your trading performance. This means it usually pays off to compare FX micro accounts to find the top rates on overnight positions, in addition to the top competitive spreads.
If you open a micro account, make sure to look at the mini forex trading accounts providers. With the rise of the Internet, the popularity of Mini forex trading accounts has skyrocketed. In fact, many investment stock traders seem keen to spread their trading risk by taking some positions on the forex market with forex mini accounts.
There are quite a few providers available for open mini account possibilities. These providers differ in, for example, trading spreads, overnight rates, and max leverage rules, which means that you should take all the time you need when comparing the various offers. In addition to comparing the Forex mini trading accounts, compare the other trading platforms available. There is a difference in the simplicity of use and interface design between mini Forex and other trading platforms.
The choice of a Forex mini trading platform may, in fact, affect your trading returns, so choose one that you’re comfortable with. Remember that you have to have the ability to use the Forex platform quickly and correctly.
Forex Micro Accounts
Sunday, August 30, 2009
Trading Forex Micro Accounts - Question Of The Week
Forex Micro Accounts
I have traded for quite some time and for the last six months have studied the Forex market. I plan to go live with a small amount of money ($5000) to see how well I do. It seems that the shorter time frames, i.e. 1 hour and 4 hour would suit a small account better than to trend trade and sustain the draw downs. Do you have any suggestions on the above topics?
Trading Forex Micro Accounts
Thank you for your email; you raised several interesting points, the first of which was account size. My main concern is that you don’t blow up your account and lose your $5000. Now $5000 may not mean much to you personally, but that is not the point. Here’s what I want to see happen; I want you to survive long enough in this game that you can become a profitable, consistent trader.
Now that the new micro accounts are available, $5000 can go a long way. Consider a trade on the EUR/USD currency pair; on a standard sized account, the value of one pip equals $10. This means that any series of trades that results in a loss of 500 pips will wipe out the account (500 x $10 = $5000). In a mini account, EUR/USD has a value of $1 per pip, meaning that any series of trades that results in a loss of 5000 pips would result in an account blow up (5000 x $1 = $5000).
But in the new micro accounts, the pip value of EUR/USD is only ten cents! You would have to lose a total of 50,000 pips to result in a broken account (50,000 x .10 = $5000). This is similar to being able to play in a professional poker tournament, sitting at the same table as the best players in the world, without having to risk more money than you would lose in a friendly game of penny poker.
The Micro Era
Micro accounts just became popular last year, and many traders aren’t even aware that they exist. This is a big deal because it means you can sustain larger draw downs without risking large sums of money; in other words, your style of trading does not have be dictated by the size of your account.
Many traders who are undercapitalized assume that they must day trade in order to avoid large losses, but with micro accounts traders can customize the size of the trade. For example, let’s assume that you have a $5000 micro account and you are trading EUR/USD (one pip = 10 cents).
Which of the following trades creates the greatest amount of risk?
1) Risking 1000 pips on a one-lot position trade (10 cents x 1000 = $100)
2) Risking 100 pips on a 10-lot swing trade (10 cents x 10 lots = $1; $1 x 100 pips = $100)
3) Risking 10 pips on a 100-lot day trade (10 cents x 100 lots = $10; $10 x 10 pips = $100)
Of course, the answer is that the risk of $100 is the same on all three. In conclusion, you could be a day trader, or a position trader, or a swing trader – in fact you could do all three at once– in a $5000 micro account. Your style of trading need not be dictated by the size of your account. Good luck!
Forex Micro Accounts
I have traded for quite some time and for the last six months have studied the Forex market. I plan to go live with a small amount of money ($5000) to see how well I do. It seems that the shorter time frames, i.e. 1 hour and 4 hour would suit a small account better than to trend trade and sustain the draw downs. Do you have any suggestions on the above topics?
Trading Forex Micro Accounts
Thank you for your email; you raised several interesting points, the first of which was account size. My main concern is that you don’t blow up your account and lose your $5000. Now $5000 may not mean much to you personally, but that is not the point. Here’s what I want to see happen; I want you to survive long enough in this game that you can become a profitable, consistent trader.
Now that the new micro accounts are available, $5000 can go a long way. Consider a trade on the EUR/USD currency pair; on a standard sized account, the value of one pip equals $10. This means that any series of trades that results in a loss of 500 pips will wipe out the account (500 x $10 = $5000). In a mini account, EUR/USD has a value of $1 per pip, meaning that any series of trades that results in a loss of 5000 pips would result in an account blow up (5000 x $1 = $5000).
But in the new micro accounts, the pip value of EUR/USD is only ten cents! You would have to lose a total of 50,000 pips to result in a broken account (50,000 x .10 = $5000). This is similar to being able to play in a professional poker tournament, sitting at the same table as the best players in the world, without having to risk more money than you would lose in a friendly game of penny poker.
The Micro Era
Micro accounts just became popular last year, and many traders aren’t even aware that they exist. This is a big deal because it means you can sustain larger draw downs without risking large sums of money; in other words, your style of trading does not have be dictated by the size of your account.
Many traders who are undercapitalized assume that they must day trade in order to avoid large losses, but with micro accounts traders can customize the size of the trade. For example, let’s assume that you have a $5000 micro account and you are trading EUR/USD (one pip = 10 cents).
Which of the following trades creates the greatest amount of risk?
1) Risking 1000 pips on a one-lot position trade (10 cents x 1000 = $100)
2) Risking 100 pips on a 10-lot swing trade (10 cents x 10 lots = $1; $1 x 100 pips = $100)
3) Risking 10 pips on a 100-lot day trade (10 cents x 100 lots = $10; $10 x 10 pips = $100)
Of course, the answer is that the risk of $100 is the same on all three. In conclusion, you could be a day trader, or a position trader, or a swing trader – in fact you could do all three at once– in a $5000 micro account. Your style of trading need not be dictated by the size of your account. Good luck!
Forex Micro Accounts
Forex Micro Accounts - Comparing Forex Micro Accounts with Standard and Mini Currency Trading Accounts
Forex Micro Accounts
Some forex brokers are now offering Forex micro accounts, which allow traders to trade in much smaller increments. A micro lot is 1,000 units of the base currency where a standard is 100,000 and mini is 10,000.
Micro accounts are currency trading accounts that allow for trading to be done in increments of 1,000 units. They often have an upwards limit on trade size and account size. You can find a list of some of the currency brokers that have micro accounts here.
Forex micro accounts are most appropriate for traders looking to trade in smaller lot sizes with less of an investment. It is also a great way to learn about the currency market without having to put up a large initial investment as many brokers dealing in micro accounts allow them to be opened with less than $100
Benefits of Micro Accounts
Demo trading is a great way to learn about the currency market, but some of the psychology of trading is missing as real money isn't being risked. Micro accounts are a great way for traders to be exposed to the emotions of trading with actual money while limiting some risk by only opening a small account.
Forex Micro Accounts
Some forex brokers are now offering Forex micro accounts, which allow traders to trade in much smaller increments. A micro lot is 1,000 units of the base currency where a standard is 100,000 and mini is 10,000.
Micro accounts are currency trading accounts that allow for trading to be done in increments of 1,000 units. They often have an upwards limit on trade size and account size. You can find a list of some of the currency brokers that have micro accounts here.
Forex micro accounts are most appropriate for traders looking to trade in smaller lot sizes with less of an investment. It is also a great way to learn about the currency market without having to put up a large initial investment as many brokers dealing in micro accounts allow them to be opened with less than $100
Benefits of Micro Accounts
Demo trading is a great way to learn about the currency market, but some of the psychology of trading is missing as real money isn't being risked. Micro accounts are a great way for traders to be exposed to the emotions of trading with actual money while limiting some risk by only opening a small account.
Forex Micro Accounts
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