Micro Account

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Lots, leverage and margin are all pretty boring subjects. One exception to this mini account forex trading is traders from the U. Spread betting usually works differently. In the previous article you learned what a pip is and how to calculate the value of a pip. To open a trade, you need to buy or sell one or more lots. Nano and micro lots are a fantastic way to trade Forex without risking much money. When you first start trading, you do not want to be trading standard lots.

Micro lots allow you to learn Forex without risking the house. Now you can calculate the value of a pip per lot. The pip value we calculated in the previous article was based mini account forex trading a single unit. Calculating how much you will make per pip on a trade is straight forward. If the US dollar is not quoted first and you want the pip value in US dollars, the formula is a little different. Leverage allows you to trade more units than you have.

In this case, you would have The important thing to remember about leverage is that it does not affect the value of a lot. You know that a mini-lot is 10, units of currency and a standard lot isunits. The value of these never changes no matter what your leverage is. If you have Leverage does not affect the value of a lot but has an effect on the mini account forex trading of lots you can have in the market, based on the capital in your account.

The reason they call it leverage is because it is much like trying to lift a very heavy object. Some objects are just too heavy to lift. Leverage may sound mini account forex trading, but it can cause problems too. The higher your leverage the more of your capital you can risk at one time, in comparison to a lower leverage.

The trader with Trader 1 takes a long position at Trader 2 takes the same long position at Since Trader 1 has Since Trader 2 has Leverage be extremely dangerous. You need to be very careful with leverage. In the end though, you are the one that determines the degree of your leverage.

Your broker can only determine the maximum leverage mini account forex trading. If you choose to use the maximum that is up to you. Margin is a good faith deposit required by your Forex broker to cover the position you have mini account forex trading into the market.

Without providing this margin, you would be unable to use leverage as this is what your broker uses to maintain your position, and to cover any potential mini account forex trading. Different brokers will insist on different levels of margin depending on a number of factors such as the currency pair you are trading and the leverage of your account.

The currency pair you are trading is a factor in how much margin is required because each currency pair moves different. This means the margin required to trade those currencies is likely to be higher. Also since margin is mini account forex trading quoted in percentage terms, such as 0. The easiest way to think of margin is that it is the 1 in the leverage ratio.

So for instance, if your leverage is This will dictate how much you can place in the Forex market. A margin call is mini account forex trading happens when you have no money left in your account. To protect you from losing more money than you have your broker closes out your positions. This means you can never lose more money than you have in your account.

The amount of money in your account that is currently used in open trades. The amount of money in your account minus any open trades. We will continue from the same examples used above. With good money management this should never happen but newbies can slip up. Tom curses himself for taking a long but he keeps the position open. If Tom keeps the position open and it moves too far against him he will get a margin call.

This protects Tom from losing more money than he has in his account. Margin calls are easily avoided if you trade sensibly. However, this is more advanced stuff that you will learn later in the free Forex course.

It is very important that you check what the margin polices are with your broker. Margin policies can differ from broker to broker so if you plan to open an account remember to ask. What is a lot in forex? However, there are several different lot sizes in Forex: Calculate the per unit value of a pip.

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Mini and micro accounts are a very important part of the portfolio of almost every forex broker offering services to private traders. These accounts appear to be a perfect solution to attract novice traders. Forex newbies are willing to try their hand in forex and at the same time they do not want to put their hard-earned capitals at great risk.

Trading on forex mini account is good not only for learning purposes, but also to diversify the risks, to be more flexible and have a better control of the trading operations. It is possible for a mini account holder to trade more than one lot at a time, that is, for a mini account trader it is possible to trade between 11 and 19 lots, whereas a regular trader should choose either one or two standard lots in the same situation.

What is more, forex traders commonly use mini forex trading to have the extra leverage available, which is possible with a wide range of retail forex brokers. In short, mini accounts offer larger amount of leverage and better risk control.

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Forex Awards Forex Nominations Best Mini Account Provider Best Mini Account Provider Mini and micro accounts are a very important part of the portfolio of almost every forex broker offering services to private traders. Vote for the best forex mini account broker here! Most indicated strengths of the Best Mini Account Provider Indicated strengths reflect the voting users preferences. Please indicate which nominee is currently a benchmark of the Forex Industry.

Variety of trading tools. No limitation on position sizes. Variety of currency pairs. Flexible orders per ticket. Only logged in users can vote.