Forex Mini
What are the
Advantages of a Forex Mini Account?
Many . With a mini account,
you will enjoy many of the same benefits as with a regular forex
account, but a lower initial investment. Here are some reasons why you
should consider a mini account with Trading INTL:
- Free training platform,
small spread
- Real Profits and Losses***
- Small Pip Spreads- 2 on the EUR/USD
- 100:1 Leverage*
Mini Account Contract
sizes
In a mini account , the
lot or contract sizes that are traded are 10,000 of the base currency,
whereas for a regular forex account, the lot sizes are 100,000; in
other words, the mini forex contract is 1/10th the size of the standard
contracts.
How can you trade
$10,000 worth of a currency with only $250 in a Mini Account?
The answer is because of "leverage*"
Leverage*
allows you to trade more of a given commodity (stocks,
currency, futures, etc.) than you have money in your account to do.
With a mini account, the margin deposit requirement per $10,000 lot
traded is $50 . That means that the leverage*
is 200 to 1 ( 10,000
divided by 50 is 200 ). Thus, with $250 you could trade a maximum of 5
mini lots, with $500 a maximum of 10, with $1000 a maximum of 20 , etc.
This leverage*
is 50 times greater than for stocks (day trading stocks
provides a 4 to 1 intraday leverage*
for traders that have $25,000
or more in an account by U.S. law). Using a high degree of leverage*
is
not always appropriate, and may increase potential gains as well as
losses, but at least the superior leverage*
found in mini forex
accounts provides the trader with a greater degree of flexibility in
the implementation and execution of different trading strategies.
Mini
Forex Trading is great for Accounts under $10,000
Traders
that want to trade with less than $10,000 are better off opening a mini
forex account. This will not only give a trader more flexibility in the
implementation of different strategies, it will also give him more
staying power in the forex market since
he could take advantage of multiple trades without over-leveraging his
trading account.
**Disclaimer:
Forex trading involves a substantial risk of loss.
***Increasing leverage may increase gains or losses on any given
trade.
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