|
What Is A Mini Forex
Account?
By
Adrian Pablo
Nowadays many people around the world is looking for entering
the world of Forex trading due to its very high profitability
potential and many other advantages the Forex market has over
other capital markets.
But one of the main worries of the new trader is if he will
need lots of money in order to be able to access this market
and start placing trades.
The reality is that practically anyone can enter the forex
markets and place trades. You don’t need to be super-rich or
the owner of a big corporation. You just need a few dollars
and the right strategy to start profiting from Forex trading.
In the Forex world there is something called a Mini Account,
and it uses a different leverage calculation than a regular
(100k) account. This means that 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. Pips in a Mini Account are worth, on average, $1
instead of the $8 to $10 value they have in a regular account.
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 , but the smaller lot sizes,
with correspondingly smaller pip values, means that you'll be
profiting less from a successful trade and also losing less if
the trade goes bad . For example, while a 20-pip loss on a
100,000 USD/JPY position would be $200, the same loss on a
10,000 USD/JPY position in a Mini account would amount to only
$20.
The following are the characteristics of a Forex Mini Account.
- Minimum required account deposit = $300
- Recommended required account deposit = $2,000
- Traded in 10,000-unit currency lots
- Default Margin: set at 0.5% ($50 per mini-lot)
- Leverage up to = 200:1
Contrary to what you may be tempted to think, there is no
downside to trading a Forex mini account, you will be enjoying
all the benefits that full-size FX account holders enjoy;
including, same state-of-the art trading software from your
broker, charts, resources, and tools. This mini accounts are
ideal for a new Forex trader to develop a disciplined,
rational forex trading strategy and technique without
excessively focusing on the fear naturally arising from
thinking too much about profits and losses.
More great news for the starting forex trader is that there is
no maximum trade volume when you use a mini account. Although
the standard trade size is 10,000 units, you are not limited
to trading one lot. For instance, you can trade 10,000 units
or even 200,000 units. Allowing that, as you become more
seasoned and build up your confidence you can slowly increase
the size of your positions to maximize profits. This ability
to customize the size of the trade will allow you to have a
better risk management of your money. |
