Mini accounts only allow traders to open positions no greater than 100,000 units. Consequently, it takes a noticeably longer period of time to grow capital that’s stored in a mini account as opposed to those using a standard account where 100,000 units or more are permitted. However, choosing to trade in such humble beginnings can actually benefit a trader in the long run and avoid the common resentments voiced by those who are too impatient and greedy. Here’s 3 benefits on why you should learn Forex trading with a mini account.
Less Risk While Learning Technicals
Although the potential profits at stake are reduced significantly, it also results in less risk taken per trade. Trading smaller lot sizes allow you to participate in news-based events and day-to-day price action with minimal risk involved. For example, a trader with a mini account trading 5 mini lots of NZD/USD with a 10-pip stop loss only stands to lose $50 of his/her real money. But with a standard account, the same circumstances will yield a loss of $500.
Access to Trading Platform
If you don’t have enough money for a standard account but wish to get an idea of how the user interface looks and feels, signing up for a mini account lets you do just that. A mini account can be funded with $1,000 minimum, anything less than that is considered a micro account or those that trade with micro lots. Along with the trading platform, you will have access to technical indicators, analyst tools, and support from both the trading community and market experts.
Appreciate the Value of Money
Learn forex trading with a mini account and you’re sure to appreciate a good 10-pip move, regardless of how infinitesimal its value is. People who load up with a standard account on their first attempt at conquering Forex tend to be ill-satisfied when they make $100 or $200 in a day. They become too greedy and chase after the jackpot prize only to find themselves buried under capital loss. Trading with a mini account forces you to be patient and appreciative of even the smallest monetary gains.
Applying For a Mini Account
The process is pretty straightforward and most brokers allow you to do everything online. You will need a bank account, copies of your ID, Social Security Number, and the minimum amount allowed by the broker for opening a mini account.
Before opening a mini account, make sure you’ve vetted your broker options and that you’ve chosen the best possible candidate for broker services. Peruse the web for unbiased reviews about your prospected broker. See if they’ve had any run-ins with authorities in the past. Check their credentials and their financial status. Are they financially fit to handle your cash with minimal to no risk of declaring bankruptcy in the next few years?
These aforementioned benefits make Forex mini accounts a powerful tool every trader should capitalize on. It offers the opportunity to allocate small amounts of capital to a liquid market that was once only accessible to wealthy people.