Account Types
The Mini account is ideal for beginners, while securing normal account trading conditions are ideal, as the conservative administration account allows trading without the time commitment, either ECN account is designed for professional traders.
Mini Trading
Account
This type of account is intended for new traders or individuals who don't want to invest large sums of money. Mini accounts allow you to trade the Forex market with a personal investment with a minimum of between $500-1,000 provides most brokerage firms leverage by 1:400 for mini accounts, which enables the rolling of transactions exceed $10,000, at the same time reduced risk of cash stores to the lowest ratio.
This is an important point you should understand in Forex trading. You can make a lot more money than they invested, but you will not lose more than you have.
Advantages:
- Trading with small capital: anyone can have $500 to risk that trading in Forex Mini account user. And the reason for the Forex market a unique feature no bye another market leverage for traffickers.
- Lower risk: all the Forex experts will tell you that trading in demo account before risking large sums of money. After you do this preferably trading Mini account. This is a good way for us to make and study the effectiveness of trading strategy, less risky.
- Flexibility: one of the key principles of Forex trading is to have a plan to manage the risks and committed, with mini accounts, it is very easy to do so. You can trade many mini contracts compared to hold one big risk with a lot of money if it doesn't work your plan.
Disadvantages:
- For mini accounts, there is only one flaw. It is true that you risk less, but like anything in life 'no gain without fatigue'. Profitability is much lower than regular trading accounts. Mini accounts that trade on $ 10,000 contracts offer only $ 1 per point, compared to $ 10 in regular accounts.
Standard Trading
Account
This type of trading accounts is the most common. It is not called a standard account name for this reason. This name is derived from the fact that traders using this type of account can make standard contract trades, which are $100,000 in the forex market. But you know now that being able to trade $100,000 does not mean you need to invest that entire amount.
Standard accounts usually have a leverage of 1: 100. This means that you only need to invest $ 5,000 only to trade using the standard account.
Advantages:
- Profitability: Since you risk more money with this type of account, the probability of profit is also greater. With this kind of calculation, each point is worth $ 10, so a 100-point gain means that stores have earned $ 1,000. This is unprecedented in the Forex market with any other type of account
- Additional services: It is obvious that when traders register a standard trading account, the service they receive from the brokerage firm or currency trading brokers is different from that offered to mini traders. This of course is logical and knows both by the trader and the broker. These concessions can include simple price differentials, as well as many other possible advantages.
Disadvantages:
- Probability of loss: This is a clear negative aspect of standard trading accounts but should be indicated. With the possibility of earning large sums in a short period of time, there is also the flip side of the coin. If the currency moves the same 100 points but in the opposite direction, your loss is $ 1,000. For this reason, the standard accounts are for professional traders who can afford to lose large amounts
- Requires large capital: minimum capital required to open a standard account that differs from one broker to another. Some ask for a minimum of $ 2,000 for trading, while some ask for $ 5,000, and even $ 10,000 with others, making this kind of account very limited to some, unlike other accounts.
Managed Trading
Account
A managed trading account does not need more detail than its name implies. They are trading accounts in which the trader contributes capital, but the management aspect is done by experts in Forex and not by the trader. When an account is opened, the trader determines the objectives of the account, and then the account manager tries to achieve these goals. There are two main types of managed accounts:
- Mutual Funds: In this type of Managed Accounts, clarifies the capital funds of joint investment with the capital of other investors, then the share of profits or losses. These accounts are classified by risk tolerance. The trader who searches for profit in a short period of time will choose to calculate the managed common capital with a higher risk / return ratio, while the trader who is looking for a firmer income will do the opposite.
- Individual accounts: More individual basis and not on the basis of mutual funds.
Advantages:
- Getting professional help: no matter how long I traded for the forks, there are definitely a lot of people who traded before you. It is always important to listen to the views of others in the market, especially when they know that they are experts in this field. With these types of managed accounts, you can generally rely on the owner in the hands of the forex experts and they will take the decisions of the experts about how to handle your money in a timely manner.
- Freedom: running your account by someone else gives you a chance without spending time doing it. You can spend your time doing whatever you want and make sure the experts in your administration do their best to help you win.
Disadvantages:
- Cost: this type of account has a high cost. Free earning from the forex market at the same without spending any time for yourself, will cost you $ 2,000 for accounts with mutual funds and more than $ 10,000 for individual accounts.
- Lack of flexibility: if you choose to manage your account by someone else, you don't want to or don't know how to proceed myself. But with this kind of calculation, there are very few opportunities to engage in trading. If you want to like for whatever reason that the deal you think it is profitable, you'll have to rely on the account manager to make sure this page and make the appropriate decision. Managing your account by others doesn't leave you much flexibility.