Mini Trading Accounts – Forex Academy

There are a lot of different kinds of forex brokerage account types out there, from more common options like mini and standard accounts to gold, platinum, and diamond accounts, and the list goes on. At the top of the list, you’ll find the elusive VIP account, which is reserved for serious traders that can afford to invest a whole lot of money. Today, we will take a more detailed look at the mini account, which might also be referred to as a cent or micro account.

Pros

One of the things that make mini accounts so attractive is low entry barriers, which usually fall anywhere from $1 to $100. These are usually the cheapest accounts offered by brokers with multiple types to choose from, so they are ideal for beginners that might not feel ready to make a larger deposit.
Traders trade mini lots instead of standard lots when operating a mini account, which gives them more control over the trade and how much they are risking.
Mini accounts typically offer very flexible leverage options, especially when compared to the other account types a broker offers.
Mini accounts are often used by those that are learning to trade because they provide more control and help limit risk, and they are also beneficial to more experienced traders looking to test strategies and systems for these reasons.
Since mini accounts do not require a large deposit, it won’t hurt your wallet as badly if you do blow your account, and you’ll be less likely to give up on trading thanks to the softened financial hit.
A mini account is a great place to start as a beginner before working your way up to an account with a larger deposit requirement.

Cons

Most brokers charge higher spreads and commission fees on their mini accounts, with better offers on their accounts that require larger deposits. This is understandable, but traders need to be aware that 1.5 pips is an average spread on the pair EURUSD. Some mini accounts we’ve seen list a spread more than twice that for the pair.
Mini account holders don’t usually get as many benefits as higher account holders through a broker. This means you might miss out on the chance to receive bonuses, you might not get an account manager where other accounts do, etc.
While you’re risking less when trading on a mini account, you’re also more likely to make less profits. This makes mini accounts less attractive to those that want to trade forex for a living, or anyone that has big goals they are trying to meet.
Mini accounts are more limited when it comes to the maximum allowed trade size, however, many beginners aren’t affected by this.

The Bottom Line

Forex mini accounts are great for beginners and can even be useful to more experienced traders that are looking to test strategies and systems. In addition to offering low entry barriers, these accounts help traders to manage their risk and take more control of their trades with flexible leverage options and less financial risk. On the downside, you might wind up paying higher fees on your mini account and missing out on some extra perks offered by your broker, like bonuses, promotional offers, etc. You will also be restricted to smaller maximum trade sizes and to make a smaller amount of money than you would on a more substantial account type. Still, a mini account is a great place to start before working your way up to another account type.

Many forex brokers offer multiple types of trading accounts so that they can cater to the needs of different kinds of clients. For example, a VIP account is usually designed for big-league clients that can afford to make a very large deposit (somewhere in the ballpark of $25,000, $100,000, or more). The broker might reward these clients with lowered spreads and commission fees or other benefits for making such a large investment with them. A Mini account is one common account type that is more suitable for entry-level traders. This account also might be referred to as a Cent or Micro account.

Conditions with every broker are different, but there are a few things you can expect to see with a Mini account type:

A low deposit minimum: Some brokers will allow you to deposit $5, while others might ask for a larger amount of around $100 or so. Still, the required minimum for these accounts is often much lower than the asking amount for a Standard account or other type of account that the broker offers. This makes these accounts more attractive for beginners.
A smaller minimum trade size: Most mini accounts will allow you to make a trade that is one micro lot (0.01) in size. Other larger accounts often require a minimum trade size of one mini lot (0.1) or one lot, especially accounts with larger deposit requirements.

Mini accounts are attractive options for beginners because they offer the ability to open a trading account with a smaller deposit while taking a reduced risk through smaller contract sizes on trades. Traders usually have access to the same assets, trading platforms, support options, and other features offered by the broker, so this can be a great option for those that are just starting out.

If you’re considering a Mini account, you do need to be aware of some of the dangers associated with these account types. While trustworthy brokers will provide you with average conditions or better, some brokers take advantage of entry-level traders that can’t afford to make a big investment right out of the gate. Here are some things to watch out for:

Make sure the broker’s asking deposit is low. You should never have to deposit $500 or more to open a mini account. Even $250 is a lot considering that many standard accounts can be opened for around $100 to $200.
Check the spreads on the account – the average spread is 1.5 pips on the pair EURUSD. If you see spreads of 3 pips or more on this pair, you should look at other options. You shouldn’t be charged an arm and a leg to make a trade just because you have an entry-level account, and many other brokers won’t try to overcharge you. Of course, do expect to see higher spreads than what might be offered on a Platinum, VIP, etc. account that requires a much larger deposit.
Look at commission fees to be sure that they are reasonable as well. Be sure to add spreads and commission fees so that you know the total cost of placing a trade.
Some shady brokers withhold certain features from lower-tiered accounts, even though those benefits should be available to everyone. For example, VIP clients might be provided with instant support, while Mini account holders are only able to talk to support through email. Having a dedicated account manager is one thing but being denied basic customer service options is unacceptable.

A Mini account can be a great option for traders that are just getting started. This account type accepts low entry-level deposits and will allow you to make smaller trades. Although profits are on a smaller scale, clients that are still learning will benefit more from this less risky account type. There are a few things to watch for before opening a mini account, however, as some brokers might try to charge you high fees or take advantage of beginners. As long as you open a mini account through a trustworthy brokerage, you will be able to reap the benefits without losing your investment as easily as you could on another type of account. Once you become more acquainted with trading, many brokers will allow you to move on to another account type that supports larger trades and offers more benefits.