When using a Forex mini account, a trading lot is typically one-tenth the size of a standard lot, which usually amounts to 100,000 units. A single PIP here is worth one dollar, irrespective of the currency, as compared to trading with a standard lot which is ten times its value, i.e., ten dollars. By possessing a mini account with a Forex broker of their choice, rookie Forex traders can exploit mini lots while trading in the Foreign Exchange Market.
There Is No Restriction On A Single Lot
With a Forex mini account, a trader is not limited to a single lot when trading. When using a Forex mini account, traders are qualified for ten mini trading lots if they want their trade to be considered worthy of a standard lot. By utilizing their mini lots, traders are able to manage their risk more efficiently and also have an opportunity to their trades. For instance, it is difficult for a Forex trader who possesses a regular account to trade if he wants make use of two standard lots that are worth 100,000 units. An alternative for such a trader can be the selection of 50,000 lots if he intends to get a better outcome. With a mini account, such a trader can facilitate his trading by choosing any number of lots that range from 11 to 19 mini lots.
A Considerable Leverage From Forex Brokers
With the use of mini lots, Forex traders can enjoy considerable leverage from their retail Forex brokers. Trading is reduced on the side of the trader as a risk management strategy in order to ensure that they are not exposed to situation where they make massive losses. With a mini Forex account, a trader is able to get an extra leverage while enduring with 100,000 units of trade simultaneously. This risk customization and enhanced leverage makes it more beneficial for retail traders to trade with mini accounts as they are not exposed to situations of massive loss.
A Small Amount Of Capital Needed To Open A Forex Mini Account
A small amount of money is needed for a trader to start a Forex mini account. This means that the trader only needs to invest a small amount of funds upfront for them to be able to open this type of account. This is a lucrative opportunity for Forex traders to get information about trading currency in the Foreign Exchange Market without exposing themselves to the risk of losing all their hard-earned money. In most cases, an upfront capital of about $250 is enough for a Forex trader to obtain a live Forex mini account. Forex traders know that even the slightest negative move of their currency pair of choice can severely affect their trade. This is the main reason why Forex traders are advised not to use their leverage in situations where they had a chance of opening an account with an upfront capital of a minute amount.
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