In forex trading, a small mistake may turn into be a big disaster very quickly. Just when you think that you’ve made it, the system can prove you wrong and you may end up losing your money. For successful currency trading, you need to possess several basic skills. For instance, you should have the ability to keep your head clear even when the exchange rate prospects do not seem to be in your favor. The best solution to this problem is to start trading with a forex micro account, if you are a beginner.
Understanding a Forex Micro Account
A standard forex account requires you to have at least $1000 in deposits to start trading. A forex micro account is one that allows you to begin trading with just $25. There are a number of forex microaccount brokers in the online market now.
One of the biggest benefits of opening a micro account is that it enables market participants to trade in much smaller increments. A micro lot carries 1000 units of the base currency, which is a significantly smaller than the 10,000 units in a mini forex account and 100,000 units in a standard account. Most forex micro account brokers have strict limitations on the trade volume and deposits.
Forex Micro Account: Good for Beginners
Some people believe that a micro version does not make sense when a standard one is there. However, the truth is that a micro account can play a very crucial role in shaping your career in forex trading. Many professional traders use microaccounts quite often to test new trading strategies and analyze how much money they are able to make through these strategies. This is important in cases where huge amounts of cash are involved at a later point. Moreover, even after being such a small account, it lets trader get access to all the resources that are available with the standard version. Due to this, forex micro-accounts are widely used to learn the techniques of reading and understanding forex charts without making large initial investment.
Many beginner traders opt to have demo accounts to learn the basics of trading. However, a demo account is devoid of the psychology of trading and does not involve risk. Also, it is more productive to practice money management with a mirco account, since it involves real money. Forex micro accounts expose traders to low risk.