Excerpt from: Forex Training
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| January 15, 2009 | | Learn currency trading with smaller lot sizes and a smaller deposit |
Forex trading has many advantages. However, before one begins, it is important to first determine what type of account he or shee prefers. When one wants to begin forex trading, there are two main types of accounts to choose from:
- Mini forex account.
- Regular forex account.
Most people think of the regular forex account first, believing that a large minimum deposit (usually between $2,500 and $5,000) is required to start trading on the currency market. This, however, is not true. The mini forex account allows one to begin forex trading for as little as a $250 (or $500 in some cases) deposit.
The biggest difference between the two forex trading accounts is that a regular forex account deals in large lot sizes: 100,000 units of currency per trade (this is one of the reasons that small changes to a currency pair can translate into large gains or losses). A mini forex account, on the other hand, has a much smaller lot size: 10,000 units of currency per trade.
The leverage in a mini forex account is often the same as that of regular forex account, but because of the smaller lot sizes, you will not make as much with the mini account. It is important to note that the leverage involved in forex trading makes this method of speculation extremely risky, no matter the lot sizes you are trading.
A mini forex account can help beginners
One of the main reasons for opening a mini forex account is for practice. Many currency market beginners "start small" with a mini forex account. The smaller lot sizes mean that you do not need as much capital to get started, and many people are more comfortable, at first, using smaller amounts of money (but the risk is still there, and you could potentially lose a great deal).
 | Topic Tags: currency market, forex trading account, learn currency trading, learn forex trading, make money, mini forex account, mini forex trading | |
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