Know Your Standard Forex Account Type
We already know the concept of trading, margin, leverage and risk levels in forex trading business. To plunge more real, of course we need a valid trading account and can be a portfolio so that we can achieve profit.
The forex market contains buying and selling of currencies in the world and one of the most liquid markets in the world. The unique aspect of forex trading is that individual investors can compete with large financial institutions and banks – they just need to set up their trading accounts properly.
There are three main types of trading accounts: standard accounts, mini accounts and managed-accounts. Each type of account has its own advantages and disadvantages. The type of account that is right for you depends on your ability to tolerate risk, your initial margin amount and the amount of time you have to focus on trading in the market on a daily basis. Well, let’s get to know the standard forex account type, its advantages and disadvantages.
Also referred to as regular and most commonly used accounts. You have access to many currency standards, each worth $ 100,000 per lot unit.
But this does not mean that you have to deposit $ 100,000 in capital for trading. There is a margin and leverage rule (1: 100 usually in forex) means that it only takes $ 1,000 margin in a trading account so you can trade one standard lot.
Advantages of Standard Account
Since standard accounts require considerable initial capital for trading, most brokers provide more services (premiums) and better facilities for individual investors who have this type of account.
On a standard account each point is worth $ 10. If the order you created moves up to 100 points in one day, your profit will be $ 1,000.
Default Account Standard
Most brokers require a minimum balance for standard accounts ranging from $ 5,000 and sometimes up to $ 10,000.
Just as you have a chance to earn $ 1,000 if the position of the order you make moves, but you can also lose $ 1,000 if it moves against the direction of the order. This loss can destroy an experienced trader with minimal amount in his trading account.
This type of account is recommended for experienced traders with good funding.