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Are you Acquainted with Forex Accounts

Posted on | July 13, 2017 | Comments Off on Are you Acquainted with Forex Accounts

Forex trading is not easy unless you become acquainted with the forex accounts. If you are not well-versed then obviously you are going to have a hard time. Forex basic is easy because you only have to understand the chart patterns, read the market movements, learn the strategies and etc. but when you learn more and more you will understand that there’s no end for forex education. Of course, there is no end because the market is always changing and every time you get to learn something new. Anyways, once you learn the basic your next step should be selecting a reliable broker. But before you find a broker you should know the types of forex accounts because the brokers will inquire about the preferred account.

Figure: Trading CFDs with reputed broker Saxo

So, as traders, you should have the complete picture of the forex accounts in your mind. Actually, there three main types of accounts they are such as standard, mini, and managed accounts. If you are new to the market you would not have the proper knowledge on these accounts so in today’s article we will explain the three types of accounts in brief so you will have some knowledge in it. moreover, you cannot just pick ANY account instead it should be based on certain factors such as how much you are willing to risk, initial investment, time allocation and etc. read the article to learn more.

Standard forex account

The standard forex account is the common account among the forex traders. If you consider the standard account through it, you will be able to trade numerous currency pairs you will not have any restrictions. You can even trade currencies worth $100,000 but it doesn’t mean that you have to have $ 100,000 capital in your account.  There are many advantages in opening standard account and they are such as potential gains, ability trade many currency pairs, and etc. when you consider the forex trading account none of it will have ONLY advantages so the disadvantages in standard account are higher capital requirement, losses are higher, and not suitable for naïve traders. The standard account is not suitable for naïve traders because they do not have the proper experience in trading so obviously it will be risky to trade standard accounts.

Mini forex accounts

If you want to trade smaller lots then the mini forex account is the ideal for you. It is just the account which allows the traders to profit from trading smaller lots. The mini lot can be equal to $10,000 (it may vary according to the brokerage accounts). Normally, these mini accounts are targeted for the novice traders so brokers offer both the standard and mini accounts so it will increase their income as well. There are both pros and cons associated with the mini accounts and the pros are such as lower risks, flexibility and lower capital requirement whereas the disadvantage is it gives the lower reward.

Managed forex trading account

Managed trading account is controlled by the professionals meaning the professionals will do the buying and selling procedures but the capital will be invested by the investors or traders. However if you want to consider trading as your full time professional, you should trade the market all by yourself. There is no point of depending on other people since the outcome of each trade is unpredictable.

Summary- of course, there are many accounts but you should not just select any account instead you should test drive every account. As traders, you should learn the pros and cons of each account but you should not take quick decisions. After the test drive, you will understand whether the account suits your trading style or not so based on it, you can take the decision. If you are not acquainted with the types of forex account it will be hard for you to become a successful trader.