A beginner in Forex trading needs to open up an account with any reputed Forex trading service which is available in the market. A lot of online Forex trading service providers offer free trading accounts for beginners to start with. But there are various types of Forex accounts, and a beginner has to know which account fits the best for his trading requirements, the trading fund, level of trading expertise etc. Know about the main Forex account types.
Types of Forex Trading Accounts
Forex Trading Accounts are generally classified as:
- Demo Account
Demo Forex accounts types can be generally opened up free of cost, and come with a number of features which can be tried out online. The account can be opened up by customers who want to test their strategies and skills in the Forex market before conducting actual trades. As it is just a demo account, traders can conduct risk-free trades with fake money. Most of the online Forex brokers offer these accounts free of cost to potential traders.
- Micro Account
Micro lot sizes are esed for trading with micro forex trading account types. The lots sizes are usually 1,000 units of the base currency.
For instance, for EUR/USD the pip worth is 0.10 USD. With a minimum deposit of 1 USD, the account can be opened up. The balance of a trader needs to be in the 1,000 – 10,000 USD range, and it is extremely appropriate for beginners who want to enjoy live trading without putting a lot of money at risk.
- Mini Account
A trader has to use mini lots sizes, usually 10,000 units of the base currency, while trading with a mini account.
For instance, for EUR/USD the pip worth is 1 USD. With a minimum deposit of 1 USD, the account can be opened up. One can trade with this type of account if he has at least 10,000 USD as his account balance. But in case a broker offers the chance to open the account with a smaller amount, there can be a higher loss while taking a margin call. Naturally, the offer should not be taken up. But these account types in Forex can be perfect for pro as well as beginner traders.
- Standard Account
With these Forex account types, can be used lots of standard sizes for trading purposes. These are usually 10,000 units of the base currency.
For instance, for EUR/USD the pip worth is 10 USD. With only 1,000 USD minimum deposit, this type of account can be generally opened up. However, most of the brokers offer a 3,000 – 10,000 USD minimum initial deposit. Such kinds of Forex trading account types are offered by the majority of brokers out there in the market.
While most brokers offer these kinds of accounts, traders are not recommended to trade with standard accounts unless they have some amount of professional experience and have a minimum of 100,000 USD in account balance. Losses can be quite huge.
- Managed Account
This type of account lets traders control their capital, although not through their sale and purchase decisions. The broker who manages the account takes these decisions. These Forex broker account types are perfect for traders who want to make their portfolio more diverse, and do not want to keep a watch on the market continuously.