There are different types of Forex account available today, depending on how a person intends to trade. The fact is that not everyone has the same goals, strategies and experience when it comes to handling Forex. Hence, it only makes sense that they will choose an account that matches their current resources. That being said, following are the different types of trading account available today.
Standard Account
This is the most common type that allows for the trade of standard-sized lots, which are around 100,000 units. Since it’s already a big risk, most new traders steer clear of the standard and leave them for the professionals. Using the standard type, individuals can make proper orders and therefore earn a fair amount of money through proper playing.
Mini Accounts
As the name suggests, this account type is smaller than the standard size. The units are typically based at 10,000 of the base currency. They are best taken up by someone who is not practiced in the system and would therefore like to transact without risking more than necessary. Professional Forex traders typically use this for practice purposes to test out specific signals and market movements. Note that not all brokers are capable of providing Mini Accounts.
Micro Accounts
Now this is definitely lower than the Mini Forex account and is typically chosen by individuals who have much lower budgets but would like to start trading and practicing. Lots in Micro Accounts typically start at 1,000 units and is rarely found in Forex brokers. More than Mini Accounts, the Micro type is better for new traders.
Forex Demo Account
Of course, don’t forget the most important account type of all – the demo. Individuals who want to start an account with any broker should first take up their demo before completely signing in. The demo will provide individuals with a fairly accurate glimpse of how the broker works and if the situation fits their standards. If not, then it’s a simple matter of not signing up for their service.
Opening a Forex Account
After choosing what type of account to open, individuals can start placing funds and practice their trading. Funding may vary depending on the type of account a person holds, the cost going anywhere from $25 to $2,000. Some documents may be necessary to complete the registration and activation process.
Note that you should NEVER open a Foreign Exchange account without first being part of their Demo Account or Trial Period. If the broker does not provide this type of service then it’s best to find a different service provider that offers more with their Demo Accounts.
It is important to note that opening a Forex account is just one step towards being a success in the Foreign Exchange market. More often than not, traders will need to thoroughly learn the ropes of the system before being quite adept enough to earn a profit. It is recommended that aside from being picky with a broker, starting traders should also pick a Micro or Mini account type first to prevent risks.
