Almost everyone on the planet Earth knows what forex trading is. But with so many types of accounts on offer, knowing where to start can be confusing.
If you are just starting out in the world of currency trading, you may want to consider a mini or micro forex account. As the name suggests, this allows you to trade with much smaller amounts.
In other words, you no longer need a large amount of cash to start trading in the foreign exchange market. In fact, traders can usually trade for only $ 50.
Forex micro accounts operate in small units of 1,000 units, so it is usually the easiest to start with – especially for new traders. Forex mini accounts are also traded in small quantities, usually 10,000 units.
What is a Forex mini / micro account?
Basically, a forex mini account is a forex account that allows novice investors to trade in the market with smaller trading amounts and lot size positions. Trading with a mini or micro account reduces risk and limits possible losses. As you have no doubt guessed, a micro account is smaller than a thumbnail. More on that in a minute.
Generally speaking, forex accounts are presented in three different contract sizes: micro, mini and standard:
- A micro account allows investors to contract the size of 1,000 basic units of property.
- In the case of a mini account, 10,000 base units can be traded.
- While standard contracts operate at 100,000 base currency units.
Similarly, the potential pip (percentage in points) reward or price movement is lower, at 10 cents for a micro and $ 1 for a mini per tick; instead of the standard $ 10.
Some websites now offer an even smaller “nano” account, allowing people to trade foreign exchange of only 100 base units ($ 0.01).
How do Forex mini and micro accounts work?
It should be said that micro and mini account options primarily attract new or inexperienced investors, due to the smaller size of the contract. It makes sense, because you can trade with little chance of a huge loss or without it. This can be really useful for traders who are still learning how to trade foreign exchange.
Micro and mini account holders usually have the opportunity to enter the same trading tools and markets as standard account holders (charts, analysis, customer support, platforms, etc.).
As we said, standard forex accounts are regulated in trading lots of 100,000 units. At the same time, micro account merchants must enter orders multiple of 1,000 units, and mini-accounts must enter orders of 10,000 units.
The smaller batch size also allows experienced traders to place more diverse orders, expanding the number of incognito assets through the choice of currency pairs. In addition, novice investors can better manage their risk due to the smaller size of the stakes.
Forex Mini Accounts and Pips
The foreign exchange market trades currencies with quoted expansion values, for example, EUR / USD 1,200. Each investment predicts that the currency will change (given the ratio of the currency pair). The shift is known as the tap movement.
How to Choose a Mini or Micro Forex Broker Account
With more and more people opting to trade in the foreign exchange market, the online brokerage scene has become extremely competitive. As such, there are now hundreds of companies offering to provide their brokerage services to the trading community.
Such a great variety is good news for you as an investor, because it allows you to choose mini or micro forex brokers that suit your trading style. The problem is that choosing so many at your fingertips can make it even harder to choose the right broker.
With this in mind, we have compiled a list of the most important considerations when choosing a mini or micro forex broker that will suit your needs.