Why Mini Forex Trading Is Important For New Traders
For any new investor to have a successful career in Forex currency trading, they have to start out in the right direction by investing in a Forex mini account. A mini account is different from the Forex standard account in terms of initial investment capitalization. This type of account can be started with only $200 - $250, with some even lower with other account handlers. A standard Forex account, at the most, requires at least $2,000 - $2,500 to begin with. The advantage of a mini account is that any investor can still do normal trading with the same privileges of that of the standard account without being burdened with a high initial investment requirement.
A mini Forex account is conveniently set at only one-tenth the lot size of a regular Forex account. Its Pip values are also given the same percentage number. The standard Forex account is given the lot size amounting to 10,000 units of the base currency, or as example would the USD which corresponding amount would be $10,000.
A Forex mini account trading is ideal for investors with little capital investments. This means that mini account traders have to engage in marginal trading or leverage trading. Leverage trading is borrowing money to do trading but without having to put up the full required amount for a single lot. The capital that is used apart from this amount is known as a margin lot. The marginal lot for a mini account of $10,000 is $50, or a ratio of 200:1. So if you start with an amount of $250, this is equal to five mini lots.
It's not advisable to take on a large amount of leverage, especially in a standard Forex trading account where losses can mean in the thousands of dollars. But in mini Forex trading, this is just the right way to go since it is not viewed as over-leveraging, since the risk factor is much lower due to its 200: 1 ratio. This lets any investor make more profitable and successful trading in dealing with lesser amount and knowing that when losses do happen, it'll be in lesser amounts. Standard Forex accounts are more complicated to handle which may not be right for the neophyte investor, who at the most may lack the right knowledge and tools for such transactions.
If you want to invest in Forex trading with amounts not greater than $5,000 - $10,000, then go with a Mini Forex account. You'll have a better chance of staying longer in the market and without over-leveraging when you do multiple currency trades. - 23222
A mini Forex account is conveniently set at only one-tenth the lot size of a regular Forex account. Its Pip values are also given the same percentage number. The standard Forex account is given the lot size amounting to 10,000 units of the base currency, or as example would the USD which corresponding amount would be $10,000.
A Forex mini account trading is ideal for investors with little capital investments. This means that mini account traders have to engage in marginal trading or leverage trading. Leverage trading is borrowing money to do trading but without having to put up the full required amount for a single lot. The capital that is used apart from this amount is known as a margin lot. The marginal lot for a mini account of $10,000 is $50, or a ratio of 200:1. So if you start with an amount of $250, this is equal to five mini lots.
It's not advisable to take on a large amount of leverage, especially in a standard Forex trading account where losses can mean in the thousands of dollars. But in mini Forex trading, this is just the right way to go since it is not viewed as over-leveraging, since the risk factor is much lower due to its 200: 1 ratio. This lets any investor make more profitable and successful trading in dealing with lesser amount and knowing that when losses do happen, it'll be in lesser amounts. Standard Forex accounts are more complicated to handle which may not be right for the neophyte investor, who at the most may lack the right knowledge and tools for such transactions.
If you want to invest in Forex trading with amounts not greater than $5,000 - $10,000, then go with a Mini Forex account. You'll have a better chance of staying longer in the market and without over-leveraging when you do multiple currency trades. - 23222
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posted by X - Men @ 5:17 AM
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