If you haven’t noticed yet let me enlighten you about a variety of choices forex accounts. Some forex brokers only offer two – demo account for practicing your forex skills with virtual money and a real account where you trade with real cash. However, some forex brokers offer more than that. So before you start chocking on the amount of forex account options out there, let’s take a look at some variety of account types.
Review of Forex Brokers Account Types
The so called “Mini Account ” is usually favored by beginners in forex trading since the minimum deposit requirements could be as low as $1. Of course we all welcome the small amount of investment, but usually mini accounts are accompanied by higher pip spreads. So if your agenda is to trade with tight spreads such as 3 pips or lower mini account terms will most probably disappoint you. Besides spreads mini account might have different leverage options, less currency pairs to choose from, smaller trading lot size, different margin requirements, different trading platform or less trading tools and even less support.
A Micro or Mini account can offer, for example from Octafx Broker, the following trading terms:
- Floating spreads, starting at 0.4 pips or Fixed spreads, starting at 2 pips
- Minimum deposit of $100 or less
- 28 currency pairs + gold and silver+ 4 indices + 3 cryptocurrencies
- Up to 1:500 leverage
- Margin call / stop level 25% / 15%
- Scalping, Hedging, news trading allowed
Standard forex account requires a higher deposit but it is usually accompanied with traditional trading platform with 24 hour assistance, low margin requirements, nicer leverage options, higher amount of currency pairs, and last but not least much lower spreads.
Standard or classic Account specification can include the following (the example taken from Liteforex Broker):
- Spread - floating, from 1.8 points
- Commission- None
- Execution type - MARKET EXECUTION
- Platform - MT4, MT5
- Leverage 1:500 - 1:1
- Account base currency USD, EUR, CHF, RUB, MBT
- Minimum deposit $50
- Rate, % per annum 0%
- Islamic accounts Yes
- Minimum lot 0.01
- Maximum lot 100
- Minimum step 0.01
- Max. number of orders Unlimited
- Margin Call Level 100%
- Stop Out Level 20%
- Social trading Available
And finally we have the fancy accounts! Most of them even have fancy names such as Gold, Platinum or VIP. The minimum deposit for such accounts varies, but it usually not less than $10,000. With large deposit comes great power and by that I mean VIP treatment. VIP forex traders enjoy tailor-made reviews, hedging and trading consults, special trading tools, charting, fundamental and technical analysis, tips and recommendations from trading coaches, financial tutors and individual forex account manager who will attend your most desired trading needs (or so we hope!)
As an example of a VIP account we have reviewed the XM Zero account from XM Forex Broker:
The new account type, XM Zero, features ultra-thin spreads as low as zero pips, along with XM's no re-quotes execution policy. The clients can choose to open an XM Zero Account with up to 500:1 leverage in USD, JPY or EUR base currencies and trade over 55 currency pairs, as well as gold and silver on MT4 and MT5 for Windows, Mac, iPhone, iPad and Android powered devices. The commission for the XM Zero Account is $3.5 per $100,000 traded.
Lastly, we have got the ECN Accounts.This type of account offers the highest annual percent accrued on unused funds, and access to deep liquidity with low floating spreads. The trading account is created on the basis of modern ECN technology that provides access to the best prices on the market, stable and guaranteed fast execution with no re-quotes and no conflict of interest.
- Increased quoting precision
- Market execution of orders with no requotes
- No Stop & Limit levels
- Scalping and news trading allowed
- Unlimited duration of transactions
- Trades are delivered directly to liquidity providers
- No conflict of interests
The example is the ECN Account specification from Liteforex offer the following:
Keep in mind that higher deposit requirements do not guarantee the quality. There are many forex brokers that promise lots and give you less then nothing. Do your homework before you sign up for any account – check the requirements, double check terms and conditions and look through the features and options.