Forex Account Types

In general, there are 3 types of Forex accounts: Standard , Mini, and Micro (Nano) account. It classifies by the leverage provided thus will have an effect on minimum deposit

One lot Standard is worth $100,000. The margin requirement to trade one lot Standard is $1,000. In Standard account, one pip equals to $10. Hence, if in one given day a trader gains 20 pips, it means he makes $10 x 20 pips = $200. In contrary, if he losses 20 pips, it will cost him $200. The capital requirement for Standard Account starts from $5,000.
One lot Mini is worth $10,000. The margin requirement is $100. One pip in Mini is equivalent to $1. Capital requirement for Mini starts from $500. Mini account is usually the more preferable by a new trader or trader who wants to test new strategy, because the potential loss in Mini is one-tenth of Standard Account.
One lot Micro is worth $1,000. The margin requirement is $10. One pip in Micro is about 10c (ten cents). Generally, Micro is a good option new trader who is not familiar with trading, because its potential loss is only one-tenth of Mini account. Not all broker provide Micro (Nano) account. Capital requirement for Micro (Nano) account starts from $25.
Both, Micro and Mini account, are a good option for a new trader, as their potential loss is much smaller than Standard account. Trader must choose the suitable leverage to trade. Experience and sophisticated trader can go with Standard account, while for beginner it’s better go with Mini or Micro account.

In forex trading, capital is crucial, but knowledge is beyond capital. If the trader has skill and knowledge, trader can compound small capital into big one. But, if the trader only depend on large capital he / she has, the money is going to the market in no time. Remember Black Wednesday, 1992 when George Soros beat Bank of England. It is a solid  proof that knowledge is beyond capital.

 

About Vilas Kusumahardja

Originally from Indonesia, Vilas began trading ten years ago to support his love of travel. He figured that, as long as he could find an internet connection, he would be able to support himself. In 2008, he came to the United States and a year later, re-learned everything he thought he knew about forex. Now, he places trades using support and resistance, utilizing signals from EA's. Vilas helps at the Apiary Fund as a trader support representative managing the Apiary Fund blog and answering questions in the forum.

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  1. Sizing - The Apiary Fund Blog - October 7, 2013

    […] Sizing is very important in Forex trading. Sizing determines lot size for one open trade position. Each open trade position can have different lot size. In Forex trading, trading unit known as ‘lot’. ‘Lot’ represents the minimum quantity of currency that may be traded. ‘Lot’ determines how much money the trader puts in one trade position. One lot size equals to certain dollar amount. It has correlation with forex account type. […]