Many Forex traders prefer to make their first steps in online trading by opening a Demo account. It is a good way of getting started but there is an even better approach to learn and experience the Forex market and it is called Cent or Micro Account Trading. The reasons to open a so-called cent account are many and we will try to present them to you in this article.
Cent or micro accounts explained
A Cent or Micro Account allows traders to open a live account with a very small deposit amount, for example $1. Also, the lot size used for trading is only $1000 or 0.01 of a standard lot. This allows you to place real trades on the financial markets with the same conditions and same quotes as other traders, without having thousands of dollars in your trading account.
Did you know that LiteForex was the first broker to introduce the idea of “cent accounts”?
It’s true, LiteForex introduced the “cent account” in 2005 and since then it has become a common practice in the Forex industry. The account type is called “Lite” Account and the minimum deposit requirement is only $1, with a recommended deposit of $50. The leverage you can use is up to 1:1000 which allows you to open a position of $1000 with only $1 from your account. The trading platforms which you can use are MT4 or MT5. Read all advantages of the Lite Account on our website.
You can open an account with just $1
The biggest advantage of a cent account is that you can open one with only $1 and start placing live trades. Since the initial investment is so low your financial risk is also very low and limited to your initial deposit. It is recommended to deposit a bit more than the minimum required in order to cover adverse price movements. The recommended deposit for the Lite Account is $50.
There is no better way to test our services
Opening a Lite Account allows you to enjoy and try out the full range of services that are offered by LiteForex. There are many things you can try out after creating an account and these include depositing and withdrawing money, our dedicated customer service, execution of live trades, trading platform features, etc. You can also check what other instruments can be traded and even place several trades with different instruments, for example CFDs on shares or indices. Once you’ve become familiar and satisfied with our services you can soon start making bigger investments and upgrade your account to a higher level.
It is real trading
You cannot prepare yourself for serious investments without first having lost 1 dollar in a real trade. The realistic environment of live trading can teach you how to deal with losses, what your trading style is and, most importantly, what your limits are. By risking real money you learn about your emotional responses and how they affect your trading decisions. This way you can learn about your weak spots and try to improve on them over time.
Customize your lots and risk
Traders with a Forex cent account can use micro lots of 1 000 units, which is much smaller than the standard lot of 100 000 units. Therefore the amount you risk per trade is much smaller. By using micro (1000 unit) lots or mini (10 000 unit) lots instead of standard lots, you can customize your trades and place smaller trades on the market. This way you will be less exposed to adverse price movements and will have greater risk control. If you are a trader who seeks extra leverage with the funds you have in your account, you can use the maximum 1:1000 leverage and still place large orders. Overall cent accounts have many advantages, especially if you are just starting to trade Forex and you want to get a feel of the market. Once you’ve gained experience and are ready for more serious trading read about the different account types offered by Lite Forex and choose the one that best fits what you’re looking for.
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The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.