Are you new in forex trading? You need an account to ensure your start in this lucrative trading business. Opening a forex account need some efforts. This is because there are many account available types to choose from. In this article, you will be able to understand the need of forex trading account and where you should go to open it. No one is willing to risk his/ her hard-earned money to lose because of wrong choices.
Why should traders open a forex trading account?
Forex (Foreign Exchange) Trading procedure consists of buying and selling of world currencies. Its unique concept is that any individual investor can compete with other traders, large banks and corporate institutes online. To trade in different currency pairs, you should open a trading account that is suitable for your trading purposes.
Types of trading account:
For opening a forex trading account online, you have to reach reliable forex broker. One can open two or more types of trading accounts. Some of the types of trading account are:
- Standard account
- Mini account
- Premium account
Each account has its pros and cons. In addition, the type of account sets the limit of investment to trade on.
Standard account is one of the most common types of forex trading account. It will be accessed to standard lots of currency. Traders who open a standard account need to invest $100,000 of capital. This does not suggest that you have to put down this amount to trade. In fact, trading amount will be 100 : 1 in forex that means $1,000 is necessary to trade on one standard lot.
- As the investment is higher, brokers provide multiple services to these traders.
- One can gain more because of high capital investment and return.
If you are willing to trade using standard account, then you must abide by the rules necessary for this type of trading account.
Mini account is a type of account that allows a trader to make his/ her transactions using mini lots. In a mini lot, one can trade with an amount that will be equal to $10,000 or 1/10th of standard account.
- It offers less investment of money
- Beginners who hesitate to trade on full lots should choose mini account
- Traders will have low risk with low capital investment
In fact, there will be small reward because of less investment of money. But it is much better for the beginners to learn. Some brokers also offer micro accounts to trade on much less capital investment than mini accounts.
How can I open forex trading account?
Different brokers provide reliable support to open trading accounts. In this context, you can take help from online reviews. This is because traders who reach reliable broker will get potential support to trade. One can say that key to become successful trader is risk-management strategies. So, choosing a broker offers great potential to understand the market. It is recommended to take forex advice from different traders before you start to trade, and open forex trading account online.