Forex Mini Accounts - Understand the Pros and Cons Before You Opt for One

FinanceTrading / Investing

  • Author Owen Moore
  • Published August 9, 2011
  • Word count 664

There are tons of recommendation to work with forex mini account for newbies. Even so, make sure you are aware of the pros and cons of a mini account first so that you understand what to expect.

Before starting a business profession, people analyze the risk and reward associated with it. Forex mini account is a best way to minimize the risk with a low startup capital. A mini account is like a normal account with a small investment. $100 are enough for opening a forex mini account. Forex mini account is a best way to boost your confidence because your investment is low so the risk is also low. So if you want to learn forex, forex mini account is best for you.

Every investment is associated with risk and return. So there are some advantages and disadvantages of using forex mini account that are:

Positive points of using forex mini account:

By using a forex mini account you can claim a number of benefits that are:

Low initial investment:

A forex mini account can be opened with only $100 while a regular account costs you $1000. So a regular account is ten times costly than a mini account. It is best for investors because they can start their business with low investment. It is affordable for every person who wants to enter in forex.

Low level of risk:

Since the investment required to open a forex mini account is lower, so the risk is also lower. If we compare it with regular account the loss occur in this is so much low. So the traders can trade without the fear of great risk.

Best for new comers:

Forex mini account is ideal for the persons who are the new comers in the forex market. It provides a best way to enter in the market. So by using the forex mini account the traders can trade in a real scenario. It is ideal for beginners to enter in the market. Such conditions are a good opportunity to become more experienced and confident trader.

Act as a regular account:

The forex mini account is different from demo account. It have the same characteristics and features which regular account has. It provides you the opportunity to trade in real market and also it offers you the reward for your successful trades.

Leverage:

By using forex mini account, you can enjoy more leverage. So the traders can earn a decent profit by using mini accounts.

Best for learners:

Forex mini account provides the opportunity of learning forex market. They can see the market indicators and also can judge the different parameters. Mini account helps the traders to increase their knowledge. In simple words, forex mini account act as a coach for entrepreneurs who want to start their career as a trader.

Disadvantages:

Each thing has some good side and a bad side. So the couple of disadvantages that are related with using a forex mini account are

Return is low:

The whole finance is based on the principle of "low risk low return". By using the forex mini account, actually you are investing a small portion in market. You are considering low risk. So keep in mind that your reward will also low. You cannot earn thousands on a mini account.

High commission:

The brokers charge commission for every trade however they small would be. So using a mini account you do small trades. Brokers charge you commission for every trade irrespective of their size, so in short you are paying more commission than regular account.

Low level of facilities:

Some brokers offer low facilities to the mini account traders. So it is up to you to make the correct analysis.

Forex mini account is just like regular account but with low startup cost. Along with low level of risk and capital, you can claim a number of benefits by using forex mini account. Low return and high commission are the two major disadvantages of using forex mini account.

If you are a new trader, have a look at forex trading tips for 5 guidelines that will ensure your survival in forex trading. Furthermore, see the details of a winning trading system which can be mastered under sixty minutes at Forex Profits Review.

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