Types of Accounts Offered by Forex Brokers
The foreign exchange (Forex) market entices investors with its high earning potential. No wonder then that the daily turnover in this market has crossed $3 trillion. Trade in the Forex market is conducted primarily through brokers. The first stepping stone for all the people who wish to participate in the Forex market is selecting a reliable, ethical broker from the numerous brokerage houses offering Forex trading serviced. Once you have finalized a broker, the next step is to open an account. Brokers usually offer several types of accounts, with each of them appropriate for different deposit sizes and margin requirements.
Brokers generally have different account types, all of which vary in lot sizes, minimum deposit amounts and margin requirements. Each type of account is suitable for a specific category of investor. The extent of your transaction size would largely depend on the type of account you have opened at your broker.
Mini Account This type of Forex account is preferred by investors who are new to the market. One feature that makes this account popular is its low minimum deposit amount. While the exact minimum amount varies among brokers, you can open the account and start trading with as little as $200 in deposit. In the mini account, you can open a position with currency units worth as little as $2,500 and start trading with this lot. This means with just a small deposit, you can control currency worth $2,500. The mini account has a built-in “Guaranteed Limited Risk” feature, which means that you would not lose more than what you have invested in the initial stage. However, this account has a higher ask/bid spread than other accounts.
Standard Account This Forex account has a deposit limit higher than the mini account. While here too the minimum deposit is dependent on brokers, most of them have set it as $2,000. With a leverage ratio of 200 to 1, the minimum lot size is $100,000. The standard account too has the “Guaranteed Limited Risk” built into the account. This account has lower spread and better leverage than the mini account.
Managed Accounts In managed accounts (also referred to with names such as Gold or Platinum), the minimum deposit requirement is usually around $10,000. With this account, you do not need to spend hours studying, assessing and actively trading in the market. Your broker assigns a professional trader to your account, who uses your money to trade and try to earn profits from numerous opportunities.
You can choose the account that best meets your requirements so as to try and maximize your profits. easy-forex® allows you to open all of the above types of accounts to enhance your trading experience and help you optimize your profits.