Know the Forex Mini Account Type
Currently traders already have a large selection of trading account types. We know the standard account types, mini and managed accounts. In other articles, we discuss the standard account type, the advantages and disadvantages of the trading account. Well this time we will discuss to know the type of mini forex accounts, advantages and disadvantages.
The type of mini account is a trading account that allows traders to make transactions using mini lots (lot 0.1). In most forex brokers, mini lots equals $ 10,000 per lot unit, or 1/10 (one tenth) of the standard forex account type.
Most brokers offering standard accounts will also offer mini accounts as a way to get new clients who are still hesitant to trade in full.
With a trade in the amount of $ 10,000 per lot unit, a newbie trader (less experience) can trade without wasting much money on his trading account. Meanwhile for experienced traders can test new strategies without spending a lot of money.
Low Capital Needs
Most mini accounts can be opened at initial margin with only $ 250 to $ 500 and they can trade up to 1: 400 leverage.
The key to successful trading is to have a risk management plan and stick to the trading plan. With mini lots, it’s much easier to do it, because if one standard lot is too risky, you can buy five or six more with a mini lot and minimize your risk.
With low risk the rewards are also low. Mini accounts that trade $ 10,000 can only earn $ 1 per point of movement, compared to the $ 10 point value in standard accounts. This type of account is recommended for beginner forex traders or those who dabble with new strategies
Note: The type of micro account, below (lower) of the mini account, is also available through several online brokers. This account trades with $ 1,000 per lot unit and the movement per point is worth 10 cents ($ 0.1) per point. This account is usually used for investors with limited forex knowledge and can be opened at least with initial capital (initial margin) of $ 25.