If you are a novice in forex trading then you can start your forex trading account with a paper trading account. This will help you to understand the stock market movement and also develop more skills and knowledge with regard to trading in a forex market. As soon you become unbeaten with paper forex trading account you can switch over to mini forex trading account.
There are two forex trading accounts of which one is the Mini account for novices and Standard account for experienced dealers.
The Standard Forex Trading Account:
The Standard Forex Trading Account was planned for the ones who are already in the Forex markets. The contract size for the Standard account is 100,000 units which are ten times above the size of a Mini account. People who want to trade in forex and make a living out of it should go in for this type of account. Here you can make lots of money but if you do not know how to manage risk then take it for granted that you are sure to lose lots of money.
Now we shall see an example to understand the concept of standard forex trading account in a better way:
Suppose you as a trader opened a standard account with 1 standard lot, then the possibility of your profit or loss can be:
1 standard lot = $10/Pip
You gain = $1000
1 standard lot = $10/Pip
You lose = $1000
- Your balance in the account should be more than $10,000 – $15,000
- You must have experience in forex trading
- You want to make a living out of forex trading.
The Mini Forex Trading Account:
The Mini Forex trading account is more beneficial to novice forex traders. It is helpful in aiding traders for growing a trained, balanced forex trading scheme with no focus on gains and losses. Comparatively forex traders who deal with small balances incline to hold on their equity variations and base trading determinations on proceeding reactions to these variations sometimes predominantly when trading with 100,000 lots in a standard forex trading account.
Mini forex trading accounts are diplomatic for traders conversant in dealing with a demo account. This would help them to gain more knowledge before they can go in for the standard forex trading account.
In mini forex trading account you will be able to derive all the welfares of a full-size forex trading account. The same visual display of information and graphs can be utilized while dealing in mini Forex trading account. All the same, it assists you to formulate the self-assurance required to be triumphant without the apprehension and misdirection when large amount is involved in forex trading account.
Mini Forex trading account comes in small sizes of ten thousand units, which is 1/10th of the standard forex trading account. For starting a mini forex trading account you need 100-300 dollars. Under mini forex trading account 1 PIP is equal to 1 dollar for EUR/USD and GBP/USD.
A mini Forex trading account teaches you about risk management. This will be useful for you when you start to deal in full-size trading account. You can deal by one mini lot and then put up on the lot size soon after.
Some of the fundamental vantages of mini Forex trading account are:
o You can start trading with as little as $250
o The leverage of mini Forex trading account is 200 – 1
o It helps lower trade size
