Forex Account Types

By Jack Seur


When people are talking about forex they are usually referring to electronic foreign exchange trading. The use of home software to trade currencies brought all sort of advantages and the obvious one is that the market is now open for all, financial firms and individuals. But there is a down side, the inexperienced trader is now exposed to this high risk market and the chance of losing money is great.

For that reason it is essential for the beginner trader to be aware of all the different accounts offered to him by the brokers.

Using the proper account can be the line that separates the earning traders from the bankrupt ones.


Demo account

If you want to start and trade forex and you haven't done it before then the demo account can be perfect for you. As a beginner trader you still don't know all the currencies trading features and the risks involved and a demo account is just the thing you need to in order to prevent losing money while getting some experience. A patient trader will wait until he profit some money in the demo and has confident in his trading strategy, only then he will invest money in a live account. Go crazy, make all your experiments and trials and try all sorts of strategies. Waste all your mistakes at the beginning, while it still doesn't cost you anything, that's what the demo account is for.

Don't be Irresponsible, take baby steps, when you feel ready move to the next step.


Micro, Mini or Standard Account

The sorts of account that are stated above usually have the same features but are distinguished in one very important thing and that is the minimum initial deposit. The minimum initial deposit can vary from 1,000$ to just 10$, depends on the broker you're dealing with. The purpose behind the different accounts is pretty much the same as the purpose behind the demo account; it can eliminate the trader's risk to minimum.
You can practice and experience in a mini or micro account, you can apply all of the regular strategies and you can still double your money (or lose it all), but using the mini account will limit your lose to almost nothing.

Polish your trading skills in the mini account and invest money according to your financial ability.


Managed Account

The last option is the manage account that allows you to sit back and relax while an account manager is doing all the work.

If you want someone else to trade for you have three options:

1. Get an account manager from one the many forex brokers and hand him your money for investment.

2. Use a service like ZuluTrade that allows you to choose an expert trader from their list of experts and calibrate your account so that the trades of the expert will be executed in your account as well.

3. Use algo trading. In algo trading you need to program a software to trade according to your trading strategy. Once you did that you can sit back, watch the results and make adjustments when necessary.
These are the accounts available for you at the forex brokers, choose yours carefully and have a safe and successful trading.

Content Editor and Forex Trader Compare BeForex - Track down your most wanted broker http://www.compare-beforex.com/

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