If you wish to trade in the Forex market, you will need to have a Forex account, money, and a computer with Internet connection. However, there are different types of accounts available that will determine how much money you will be trading. These would be the demo account, micro account, mini account, and standard account.
With the demo account, customers can open the account and try out their skills and strategies in trading in a Forex market. Because it is only a demo, you will not be trading with real money so you are risk free. Demos are usually free of charge, and have a variety of online features to try out.
With the micro account, a trader trades with micro lot sizes, which are generally 1,000 units of the base currency, for example, the pip value is $ 0.10 for EUR/USD. This account can be opened with a minimum of $ 1 deposit. The trader’s account balance should have between $ 1,000 and $ 10,000, and is very suitable for very new traders who would like to have a taste of live trading without risking a great amount of money.
With the mini account, a trader trades with mini lot sizes, which are generally 10,000 units of the base currency, for example, the pip value is $ 1 for EUR/USD. This account can be opened with a minimum of $ 1,000 deposit. If you have at least an account balance of $ 10,000, trading using this account will be suitable. However, if a broker offers you to open the account at smaller amounts, you may find a very great loss in a margin call, so be careful not to take the bait. Nevertheless, this type of account is suitable for both beginner and professional traders.
With the standard account, a trader trades with standard lot sizes, which are generally 100,000 units of the base currency, for example, the pip value is $ 10 for EUR/USD. This account can usually be opened with a minimum of $ 1,000 deposit, although most brokers will offer a minimum initial deposit of $ 3,000 to $ 10,000. This account is offered by most brokers, but unless you have at least $ 100,000 account balance and is a professional trader, it is not recommended to use this account for trading as losses can be very great.
All in all, when choosing the suitable Forex account for your trading needs, measure how much you have and gage your level of trading expertise. Being realistic when choosing accounts will keep the chances of disastrous loss at bay.