The Difference Between Standard and Mini Forex Accounts

There are a growing number of people that are finding their way into the currency markets. An even bigger number of people are at least curious about it, and this is a great adventure for anyone. In fact, some people do it purely as a hobby. They get satisfaction out of competing with the rest of the world, and holding foreign currencies. Others are looking to strike it rich, and many make their full time living from it. Whatever the reasons are that draw so many to the Forex, they all have to start somewhere.

Having success in the Forex is tough feat. There's a huge learning curve before getting started down this journey. That's why brokers have setup different styles of accounts to get newcomers familiar with trading while they cut their teeth so to speak, but they also have accounts for the more seasoned traders. These are called mini accounts and standard accounts.

What is a Mini Forex account?

A mini Forex account is for beginners of currency trading. They differ from standard accounts in terms of risk, and leverage. Most newcomers should start here until they have a firm plan. Otherwise, they can lose their account in a hurry. It is said time and again by veteran traders that risk management is the most important thing when it comes to success in the Forex. This is good advice that should be taken seriously by those who are new to trading.

A trader can open a mini account for as low as $250 depending on the broker. This allows them to leverage up to 400:1. Each contract gives the trader control over $10,000 lots, and one pip in either direction represents one dollar in these accounts. On a good day, even one dollar pips can rack up in a hurry.

What is a Standard Account?

The standard account is for those who have graduated so to speak with a plan for trading that works. Here, the entry level is $1000 to control one lot that equals $100,000 in capital. This is a significant increase in both profits and losses for the trader than for those who are using a mini account. Any pip movements in this type of account represent $10 per lot.

It's also important to note these are only entry minimums. Many fall under the impression that if they have a $1000 to trade with then a standard account would be best. In fact, it may be short lived if a few trades run south. In the end, trading in the Forex is a great endeavor for anyone. However, opening the right account is important to getting this journey set in a good direction.

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