In Forex brokerage cent accounts are known by the fact that they are accounts where all the deposits, losses or profits are quantified in terms of cents, as opposed to the more traditional form of measuring them in terms of dollars. In the formative years, a trader was required to have $500 in order to open a live account and begin trading. This amount was very high a toll for most traders and only those who could afford it could trade in this market.
The development of the cent accounts was thus a response to this status quo as the emergence of bigger competition among the firms led to more brokerage firms coming up. These new firms were largely unknown to most traders and brokers alike, but had a unique aspect; they were willing to develop and part of their development strategy encompassed offering account opening with lesser amounts of money. The sums that were considered lesser than the previous $500 have been reducing over time and most recently there has been the emergence of Forex brokers who are known to control cent accounts.
A cent account is a trading account found in the Foreign Exchange Market which measures the deposits made in terms of cents instead of US Dollars. These accounts are operated in the same fashion as those that use the US Dollar system,with the only difference that exists between these two accounts being the measure used in quantifying the money deposited. The values in the terminal are multiplied by one hundred to get its equivalent in the cent account. If one decides for example to open a cent account and deposit $ 20, the amount shown in the terminal would be 2,000 cents.
Cent accounts are known to be very helpful to new traders due to their registration requirements that have allowed many of the novice traders to learn a lot about the Forex market and the brokerage process. Forex brokers that offer such services are known to limit both the position size and the maximum account. It is also important to note that these types of accounts have higher quotes for the spreads that they have to ensure that the Forex brokers are also compensated.
Forex brokers often recommend cent accounts for clients who employ capital-demanding strategies that include the use of Grid Trading or the more popular Martingale. Some of the most popular cent account Forex brokers include FXTM, FiboGroup, InstaForex, Fort Financial Services and RoboForex with pakyments options ranging from Paypal, Skrill, Bitcoin, FasaPay and Webmoney. Additionally, Forex brokers offering cent accounts have thus been responsible for the growth of the number of traders who engage in currency exchange. More cent accounts have also allowed the traders to be more conversant with the process of trading through their demo accounts which act as a training ground for them before they get live accounts where they can solicit the services of Forex brokers when buying or selling currency.
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