When you go for forex trading, you may come
across many account types, forex mini account and forex micro account
are some of them. These two types of accounts are mainly for beginners who have
little idea about forex trading and want to start trading. Let’s get to know
the details of each account type.
Definition of Forex Mini and Micro Account
Both forex mini and micro accounts cater the
retail investors and idle for the beginner level trader. These types of
accounts allow the traders to take a forex position using a smaller size.
Forex mini account holders can take the position in the forex
mini lot, which represents a smaller trading quantity. On the other hand,
forex micro account holders can trade forex in the micro lot, which is even
smaller than the mini lot.
The ultimate goal of these accounts is to lower
the potential risk as well as limit the losses. Furthermore, the newbies can
also learn trading through this account.
Lot Sizes
Based on lot sizes, forex account basically
initiate a trade in three contract sizes: forex mini, micro, and a standard lot.
So, how big are those contract sizes? Let’s know them.
·
Micro lot: This size of lot starts
from 1000 units.
·
Mini lot: It starts from 10,000
units.
However, standard lots are bigger than the
aforementioned lot sizes, which start from 100,000 units.
How do the Forex Mini and Micro Account Work?
As we have mentioned earlier, these account
types are mainly for the newbies. Hence, these accounts will come in handy for
the new traders. Although Micro and mini accounts will offer the benefits like
a regular trading account, but the working procedure is like a piece of cake.
You will have access to standard account features such as numerous tools,
platforms, charts, analysis and more.
To take a position via micro account, a trader
will have to order multiples of 1,000 units, and for the mini account holders,
it is 10,000 units. Due to the small order placement opportunity, traders can
diversify their trading.
A new trader can understand the market by
placing a small order. Furthermore, the trader becomes knowledgeable and gains
experience slowly.
Selecting Brokers for Mini and Micro Accounts
Sometimes brokers don’t offer micro or mini
accounts. Instead, they work with experienced traders. Hence, the new traders
tend to face problems finding the forex micro account brokers and forex
mini account brokers. You can check the following features while looking
for a mini or micro account forex.
· Regulation
and Licenses: Checking out the regulation will be
the first thing to do. So, verify the license and regulation with the proper
regulatory body.
· Platform:
Ask the broker if they will provide
them access to all the features of the platform. Also, know the name and
features of the offered platforms.
· Currency
Pairs: If you want to use a broker for
testing purposes or even if you are a new trader, you will need to use multiple
currency pairs.
· Trading
Tools: Tools usually increase the trading
capacity and make trading easier. So, know all the tools you will get access
to.
· Commissions:
Brokers earn money via commission.
So, know the commission they will charge for the mini and micro accounts.
· Deposit
and Withdrawal: Although you may not need to pay a
huge amount as a deposit, it will help you if you know the funding methods.
· Customer
Support: Having good customer support is
necessary for any kind of situation. So, understanding the quality of customer
support is necessary.
Final Words
Forex mini and micro accounts are necessary for
the new traders as well as experienced traders. New traders need these accounts
to learn forex trading, while experienced traders use this account to check a
broker. Among the forex mini vs micro accounts, which one do you need?
Choose the one wisely according to your needs.
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