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What Is A Mini Forex Account?
What Is A Mini Forex Account?
by Adrian Pablo
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Nowadays many people around the world is looking for entering
the world of Forex trading due to its very high profitability
potential and many other advantages the Forex market has over
other capital markets.
But one of the main worries of the new trader is if he will need
lots of money in order to be able to access this market and
start placing trades.
The reality is that practically anyone can enter the forex
markets and place trades. You don't need to be super-rich or the
owner of a big corporation. You just need a few dollars and the
right strategy to start profiting from Forex trading.
In the Forex world there is something called a Mini Account, and
it uses a different leverage calculation than a regular (100k)
account. This means that instead of trading full-size currency
lots (100,000 units), you'll trade in lots that are just 1/10
the size (10,000 currency units), which in turn greatly reduces
the amount of money you risk in each trade you enter. Pips in a
Mini Account are worth, on average, $1 instead of the $8 to $10
value they have in a regular account. The Mini Forex Account offers up
to a huge 200:1 leverage, this means that just a $50 margin
deposit will allow you to trade lots worth roughly $10,000 , but
the smaller lot sizes, with correspondingly smaller pip values,
means that you'll be profiting less from a successful trade and
also losing less if the trade goes bad . For example, while a
20-pip loss on a 100,000 USD/JPY position would be $200, the
same loss on a 10,000 USD/JPY position in a Mini account would
amount to only
$20.
The following are the characteristics of a Forex Mini Account.
- Minimum required account deposit = $300 - Recommended required
account deposit = $2,000 - Traded in 10,000-unit currency lots -
Default Margin: set at 0.5% ($50 per mini-lot) - Leverage up to
= 200:1
Contrary to what you may be tempted to think, there is no
downside to trading a Forex mini account, you will be enjoying
all the benefits that full-size FX account holders enjoy;
including, same state-of-the art trading software from your
broker, charts, resources, and tools. This mini accounts are
ideal for a new Forex trader to develop a disciplined, rational
forex trading strategy and technique without excessively
focusing on the fear naturally arising from thinking too much
about profits and losses.
One more great new for the starting forex trader is that there
is no maximum trade volume when you use a mini account. Although
the standard trade size is 10,000 units, you are not limited to
trading one lot. For instance, you can trade 10,000 units or
even 200,000 units. Allowing that, as you become more seasoned
and build up your confidence you can slowly increase the size of
your positions to maximize profits. This ability to customize
the size of the trade will allow you to have a better risk
management of your money.
About the author:
Adrian Pablo is a Forex freelance writer with articles published
in a number of places. Get a free report on Fibonacci Trading
and learn more about the world of trading , visit:
=> http://www.1-forex.com
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