Ins and Out of Forex Mini Account and Forex Micro Account
To step into the forex trading world, opening the right account is one of the foremost steps you should take as a new trader. However, there are few account types that are newbie-friendly and based on trade volumes. Forex mini account and forex micro account are some of those newbie-friendly accounts.
However, many new traders tend to fall for lucrative deals offered by many forex trading platforms. As a result, rust into registering an account without an understanding of its offerings. Moreover, some traders may get confused with a range of accounts. Rushing to opening a trading account and getting confused is okay, but the wrong approach. So, we have compiled this article to help you make your wrong approach right.
After finishing this article, you will get in and out of two beginners friendly forex trading accounts that would get you the inclusive idea.
Basics of a Forex Mini Account
In forex, the more you invest, the more you can earn; however, the more you may lose too. But everything depends on your understanding; for that reason, it is wise to start with a basic account so you can comprehend everything. Being said that, initially, a forex mini account would be the best choice.
Forex mini account usually let anyone trade in a small amount as a forex mini lot. Trading with a mini account can significantly reduce any potential risk at the same time; it helps to check out a forex broker and under basic trading features.
On the other hand, a forex mini account will not give you maximum profits like the standard account. So, if you have a large amount of investment, you shouldn’t opt out of a mini account.
Forex Mini Account at a Glance
By looking at the following points, you will understand the idea of a mini account in seconds.
- Smaller trading size, which comes as the forex mini lot, will let you order different forex pairs.
- Beginners can start this account as their learning process.
- Funds can be distributed to various currencies.
Forex Mini Lot Sizes
The size of the mini lot is a trading lot size, which is one-tenth of a standard lot size. You may find one lot, two lots, etc., and any multiple of a mini lot. The forex mini lot starts from 10,000, which represents one mini lot. So, if you trade 20,000 units, it should be 2 mini lots; this is how you can multiply and increase your trading size.
Forex Mini Account Benefits
First of all, if you are too much aware of the risk factors, a mini account could relieve you. However, with a mini forex account, you can invest a certain amount on some forex mini lot and save the rest for any future order.
You can open a mini account with a small investment. The minimum deposit for a forex mini account can start from $100. However, the deposit amount is not the same for all brokers; depending on the forex trading platforms, the deposit can be varied from broker to broker.
On another note, the underlying mini lot for forex trading can help to take a proper risk management strategy, which you can apply for futures trading.
Drawbacks of Forex Mini Account
Although a mini account can minimize any potential risks, it will not earn you a reasonable profit. It is because of their pip movement rate. For instance, while the mini account can get you $1 per pip movement for a $10,000 mini lot, the standard account can generate $10 for the same amount.
Forex Mini Account Brokers
Every single best forex broker supports mini accounts for all. Additionally, brokers can get your signals and indicators via their platforms. However, all the MetaTrader 4 forex brokers and MetaTrader 5 forex brokers include mini accounts in their trading account types.
But as a new trader, you will find it difficult to sort out the brokers according to the accent types. However, we have a simple trick for you to find the forex mini account brokers. The minimum deposit amount required by a broker is a primary way to sort the mini brokers. If you see a broker with a minimum deposit of $100 or less, that broker should offer a mini account. Besides, you may search for forex broker reviews for a mini account on google to get the list of top 10 forex brokers who offer forex mini accounts.
CySEC, FCA, FSB, DFSA, SCB
Basics of a Forex Micro Account
If you want to make less investment than $100, a forex micro account can be perfect for you as it offers a small-scale investment. Basically, Forex micro account is usable for retail investors in the beginner level. The micro account doesn’t possess a high risk, so it is feasible for any level of traders.
Usually, the beginners open a forex micro account, but experts also trade via micro account if they want to check a new broker before investing on a large scale.
Forex Micro Account at a Glance
Though you already know the basics, the glimpse will give you a better idea.
- Micro accounts mainly attract risk-averse investors as this type of account is less risky.
- A trader can trade in the smallest scale named micro lot.
- The lowest trading scale is 1,000 units.
Benefits of Forex Micro Account
The prime pros of the micro forex account are the lowest possible minimum deposit. The micro account doesn’t require any minimum deposit to start. However, in some cases, brokers may require a minimum fixed deposit of $50.
The smallest trading lots of 1,000 units allow you to put more control on your investments and orders. Besides, investing in different foreign currency pairs will let you find the winning pair and strategy.
Drawbacks of Micro Account Forex
Forex trading has many unwanted risks, and trading with a forex micro account is no exception. It is the only drawback of micro account forex, but the risk is low.
Forex Micro Account Brokers
Forex micro account brokers are the right choice for the entry-level broker as the initial deposit is the lowest among all the account types. However, searching for a forex micro account broker is not a difficult task. The requirement of the minimum deposit amount can indicate a broker if it is a micro account broker or not. Usually, the micro account brokers deposit requirement relies on $1 to $50. So, if you find any broker that requires deposits within this range is a forex micro account broker.
CySEC, FCA, FSB, DFSA, SCB
Forex Mini vs Micro Account
Although both micro and mini accounts are feasible for the beginner, they have differences as per the lot size.
1,000 units= 10 cents/ pip = 1 micro lot
10,000 units= $1/ pip= 1 mini lot or 10 micro lots.
In terms of spreads, the forex micro account offers a tighter spread than that of a mini account. For example, trading a 30,000-lot size on a micro account will cost you really less than trading on a mini account.
Usually, lots are calculated as multiples of unit size. Mini lots are multiple of 10,000 units, and micro-lots are multiple of 1,000 units.
Both forex mini account and forex micro account are highly beneficial for the new traders. However, experienced forex traders can use it too, as there are times when experienced traders need to find out a broker’s authenticity. So, in these situations, both account types come handy.
All the details we have provided above in this article should definitely give you ins and out about forex mini and micro-accounts.