The Forex market stands out as a global network formed out of traders that speculate various currency values. Forex trading brings in high leverage and if you want to capitalize on fractions volatility this is necessary when talking about currency units. The problem is that there are daily exchange rates variations and they are usually very small. This causes a lot of risk when trading in the forex market and many stay away from investing because of this very reason. Most will not want to risk a lot of their earned cash in order to trade something that has big risks of transforming into a loss of money. People like that can now opt for forex mini accounts in order to minimize risks.
What is a Forex Mini Account?
There is a lot of trading involved with the forex market as it operates continuously throughout the day. One standard lot will be made out of 100 thousand base currency units of one currency pair. As an example, one standard EUR/USD lot is of 100,000 EURO. Mini accounts have many 10 thousand units of a currency. This allows for mini account holders to trade much smaller amounts as compared to standard account holders.
Mini Forex Trading is highly similar to any regular forex trading session. The real difference stands in the fact that you can start your trades at just $25. Mini Forex account contract sizes are 1 tenth of the regular trading contract sizes. Even so, they can easily be leveraged and traded in a similar fashion. In truth, any Mini Forex Account will enable a trader to gain more leverage. People that learned trading forex through demo accounts should always start trading real cash through mini accounts.
Pip Sizes in Forex Mini Accounts
Mini forex accounts have smaller pip values when compared to regular accounts. A regular EUR/USD account pair has the value of 10. This leads to small fluctuations causing decreases or increases of even hundreds of dollars. When talking about mini accounts the pip value is $1. This reduces market movement vulnerability.
Forex Mini Accounts – Benefits
Mini Forex accounts are very good for a small trader that will not be able to use a lot of money to trade forex. Also, it will enable the trader to trade by using the exact same tools that the standard account holder is using. By doing this the risk is lower and trade confidence can increase for everyone. Mini forex account traders can be a big part of the forex market, just as the veteran traders.