Tag: Trading Accounts

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Forex Basics

Everyone Should Know This Before Opening A Live Account

Sometimes we just can’t wait to go live, start trading and earning money. After all, that is why we are here trading in the first place. Going live means that we will be trading with our own money instead of the pretend money that we have when using a demo account. However going live, as […]

Sometimes we just can’t wait to go live, start trading and earning money. After all, that is why we are here trading in the first place. Going live means that we will be trading with our own money instead of the pretend money that we have when using a demo account. However going live, as […]

Sometimes we just can’t wait to go live, start trading and earning money. After all, that is why we are here trading in the first place. Going live means that we will be trading with our own money instead of the pretend money that we have when using a demo account. However going live, as exciting as it is, is not something that you should jump into straight away, this is true whether you are trading manually or using an expert advisor.

There are a lot of big steps and things to consider should you decide to move over to a live account, there are certain things that need to be ready and certain psychological preparations that you will need to ensure that are set up and ready to go. We have made a list of a few different things that you should probably consider before you decide to go live, of course not all of the things are relevant to everyone but some of them certainly will be, so consider them before going live, if you already are live, then consider whether you need to start doing any of these things or even potentially moving back to a demo account should you actually feel you maybe aren’t quite ready to go live.

How long have you been trading?

This one should be quite easy to answer, the standard thing to do is to consider whether or not you have been trading regularly for the past six months. Don’t think about whether it was profitable or not, just that you have been doing it regularly. The definition of regular will vary from person to person so consider it along with your strategy. If your strategy wants you to trade 5 days a week then ensure that you have been trading 5 days a week for six months, if your strategy only requires 3 days a week then ensure you have been doing at least 3 days a week for the past 6 months. This ensures that you have been trading in line with your strategy for a long period of time, building up experience and an understanding of how it works. If you are using an expert advisor (EA) then ensure it has been running well for at least those 6 months before moving towards a new live account.

Have you tried more than one strategy?

Some people join forex and trading, find one strategy, and then stick with it, but how do you know that this strategy that you have picked is actually the right one for you? You don’t until you have tried at least a few different ones. The demo account is the perfect place to do this. If you try one and it goes horribly wrong, at least you have not lost anything. However, if you try something new and it works wonders, there is no harm in taking this one up as your primary trading strategy. Use this demo account to experiment until you have found the strategy that is right for you. Also having experience in multiple different strategies will allow you to adapt much better to the ever-changing markets. So before you go live, ensure that you have tried at least a few different strategies, just so you will be sure that you have the right one and that you are comfortable with the one you are planning to use.

Are your winnings more than your losses?

Something that you want and need to be sure of before you go for a live account is that you are actually trading profitably, if not then at least breaking even on more occasions than not. There is absolutely no sense in going to a live account if you are consistently making losses on your demo account. The exact same thing will happen on a live account but this time you will be losing some of your real money. So ensure that you are making consistent profits, not just a single good day or week, but consistent profits over a long period of time before you decide to put any of your real money on the line.

Do you record and review your trades?

Having some form of recording of your trades, mostly through a trading journal is vital if you want to trade your real money, you should also be using this record and the information that it brings to help analyse the review of your trades. If you are not doing this then start doing it and do it for a while before you go for a live account. This is a fantastic habit to have and one that every trader should be doing. It will allow you to work out why some trades have lost and also why others have won so you can try and alter your strategy or mindset to better suit the ones that are winning. It will also give you a much better overview of the standard of trading. Try to make sure that you are doing this and benefiting from it before you go live.

Is your trading plan based around you?

What we see a lot of is people simply taking someone else’s trading plan and strategy and then simply copying it word for word and trade for trade. This is not a good way of trading and while it may bring you some short-term results. It certainly won’t keep you going long term. If you simply copy what someone else is doing, you most likely do not know exactly why they are doing what they are doing. You need to create a plan that is based on you. You can certainly use another one as a template, but you need to ensure that you get a full understanding of what you are doing and when you need to use it on a demo account for an extended period of time so you can be sure that it works and that it does actually suit you.

So do you think you are ready to go live? If you are not entirely sure yet then there is no issue at all, simply continue with a demo account until you feel ready to go live, there is no harm in spending more time on a demo than others. Remember, you will be trading your own money with any losses being your actual money gone, so ensure that you are fully prepared before you take the major step in your trading career.

Categories
Forex Basics

The Fundamentals of Forex Standard Accounts Revealed

When it comes to forex trading, a standard account is the most common account type out there. Most brokers offer an account by this name, especially if the broker only offers one account type altogether. While the name might not sound so impressive, standard accounts do offer some benefits to traders, along with disadvantages. Stay […]

When it comes to forex trading, a standard account is the most common account type out there. Most brokers offer an account by this name, especially if the broker only offers one account type altogether. While the name might not sound so impressive, standard accounts do offer some benefits to traders, along with disadvantages. Stay […]

When it comes to forex trading, a standard account is the most common account type out there. Most brokers offer an account by this name, especially if the broker only offers one account type altogether. While the name might not sound so impressive, standard accounts do offer some benefits to traders, along with disadvantages. Stay with us to find out more about this type of trading account.

Pros

  1. Standard accounts can usually be opened with a reasonable deposit minimum, typically from around $100 to $300 or $500 in some cases. Some beginners might have to save up to afford the deposit, but it isn’t an impossible goal to reach.
  2. Standard account holders can usually access some perks through their brokers, like reduced spreads, bonus opportunities, and so on.
  3. Those trading on a standard account have good opportunities to profit. For example, you could profit $1,000 with each pip being worth $10 if a position moves in your favor by 100 pips. It usually isn’t possible to come out with this type of gain with other account types.
  4. Spreads on standard accounts are usually about average, although some brokers do offer competitive spreads on these account types. This can really go either way. 

Cons

  1. Some brokers might ask for a larger deposit in order to open one of their standard accounts. The good news is that you can avoid those companies and look for a cheaper broker if you can’t meet the minimum requirements.
  2. Although standard accounts offer a good opportunity to gain profits, traders can also lose the same amount of money if things move against them.
  3. Beginners might struggle with the loss potential on these accounts, especially if they are only working with the minimum required deposit in their account. One bad move could be financially devastating if the risk isn’t managed well enough. 
  4. While standard account holders can usually access some perks, they are often more limited than those offered to higher tier account holders. Bonuses might be more limited, other account holders might be given a free trading coach or one on one lessons, and so on. 

The Bottom Line

Many beginners start out with either a mini account or a standard account. The standard account is a common type of trading account that can usually be opened for $100 to a couple of hundred dollars, with some perks, like an opportunity for larger financial gains, average to competitive spreads, and extra perks in some cases. On the downside, traders can lose just as much as they can gain, so these accounts can be dangerous for those that don’t really know how to manage their risk well. We’ve also seen high fees with some brokers on these account types, so traders will need to remain diligent when it comes to researching terms associated with any broker’s standard account before signing up.

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Beginners Forex Education Forex Basics

Forex Mini (and Micro) Trading Accounts Explained

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 […]

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 […]

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.