To take advantage of the highly profitable opportunities available on the forex market, you need to register an account with a brokerage firm. Your broker is your primary partner in your forex trade business venture and thus you should go about choosing one very carefully. Once you have picked your broker, you need to find the best account to suit your investment needs. There are various kinds of brokerage accounts and these include:
A demo account may also go by the name practice account or paper account. It is basically an account offered by the broker free of charge. It allows the trader to test out trading theories and experience the forex market using real time forex data. With a demo account, the trader can learn all about trading currency without incurring any risks or committing any funds. Though a demo account will probably have only the basic features on the trading platform, it offers a great way to learn how to use the trader’s platform profitably and in a timely manner.
A micro trading account is a live account for investors who want to start small. A micro account allows the trader access to all live data and all the features of a trading platform. It is not only a great account for those who want to start with small investments, it is also a wonderful option for those with other large accounts but want to maintain an account for trying out new strategies without losing the features offered on a live account. For instance, if you have an account with an investment of $50,000, it would be a good idea to also maintain a $50 micro account where you can test out your strategies and adopt the ones that work on the $50k account. A micro account typically has a minimum deposit of as low as $20 depending on your broker. With a micro account, you will be trading micro lots or will have to use high leverage levels to trade on standard lots.
A mini account is larger than a micro account and has a typical minimum deposit of around $200-500. Deposits on a mini account can go as high as $100,000. This type of forex trading account is great for beginners who have gathered the expertise and confidence to pursue higher profit levels compared to what is offered by the micro accounts. A mini account may not make one rich, but it is an avenue for growth and can result in a comfortable steady income.
A standard forex trading account can enable a trader achieve very high profit levels with much less effort compared to the other account types already discussed. With a standard account, you are not under pressure to keep trading so as to achieve decent profits amounts. You can opt to wait out the market until that time when it offers ideal trading conditions that can offer the best profit margins. A trader can also trade on longer timeframes which are easier to manage and easier to analyze for lower risks and higher profits. Minimum deposits for a standard account are typically from $50,000 though should ideally start from $100,000 to avoid the need for high leverage which increases risks.
These accounts offer the best of everything to traders. They are favored by highly professional full-time traders who want access to the best that the market can offer. A VIP account is a standard account with extra benefits. One gets higher leverage, access to market signals and indicators, access to more real time news feeds, and access to expert advisors.
Depending on the broker one picks, there are many different kinds of trading accounts available on the trader’s platform. Most of them are differentiated by the level of investment or by the level of services offered by the broker.
Felix Leitner is a portfolio manager and financial consultant with a proven track record for high returns on client investments. His success rate is very much a result of his years of Wall Street trading which combined home-based financial products and overseas investments.