In forex trading, a small mistake can quickly turn into a big disaster. Just when you think you’ve made it, the system may prove you wrong and you may end up losing your money. To successfully trade forex, you need to possess several basic skills. For example, you must have the ability to keep a clear head even when the exchange rate outlook does 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 start trading with just $25. There are a number of forex micro account brokers in the online market now.
One of the biggest benefits of opening a micro account is that it allows market participants to trade in much smaller increments. A micro lot carries 1000 units of the base currency, which is significantly less than the 10,000 units in a mini forex account and the 100,000 units in a standard account. Most Forex micro account brokers have strict limitations on trading volume and deposits.
Forex micro account: good for beginners
Some people believe that a micro version is meaningless when there is a standard one. However, the truth is that a micro account can play a huge role in shaping your forex trading career. Many professional traders use microaccounts quite often to try out new trading strategies and analyze how much money they can earn through these strategies. This is important in cases where large amounts of cash are involved at a later time. Also, even after being such a small account, it allows the merchant to access all the resources that are available with the standard version. Because of this, forex microaccounts are widely used to learn the techniques of reading and understanding forex charts without making a large initial investment.
Many beginning traders choose to have demo accounts to learn the basics of trading. However, a demo account lacks the psychology of trading and carries no risk. In addition, it is more productive to practice money management with a mirco account, since it is real money. Forex micro accounts expose traders to low risk.