Forex Trading Guide - Forex Advisory Section

Main Forex Advisory sponsors

 

 

Welcome to Forex Trading Guide

Article

What�s the Difference of Trading Mini Lots Vs. Full-sized Lots in Forex.
Adrian Pablo

In Forex trading there is something called, a Mini Account, and it uses a different leverage calculation than a regular (100k) account. This is, instead of trading full-size currency lots (100,000 units), you'll trade in lots that are just 1/10 the size (10,000 currency units), which in turn greatly reduces your risk. Pips in a Mini Account are worth, on average, $1 instead of the $8 to $10 value they have in a regular account. The Mini Forex account offers up to 200:1 leverage, this means that just a $50 margin deposit will allow you to trade lots worth roughly $10,000 , but the smaller lot sizes, with correspondingly smaller pip values, means that you'll be assuming less total risk. For example, while a 20-pip loss on a 100,000 USD/JPY position would be $200, the same loss on a 10,000 USD/JPY position in a Mini account would amount to $20.

Here you have an overview of leverage (Margin, Account Size) on each of the two accounts discussed above:

100K (Regular Full-sized Account)
- Minimum required account deposit = $2,000
- Recommended required account deposit = $5,000 to $10,000
- Traded in 100,000-unit currency lots
- Default Margin: set at 1% ($1,000 per lot)
- Leverage = 100:1 or 50:1 (if margin is set at 2%)

Mini Account
- Minimum required account deposit = $300
- Recommended required account deposit = $2,000
- Traded in 10,000-unit currency lots
- Default Margin: set at 0.5% ($50 per mini-lot)
- Leverage = 200:1

There is no downside to trading a mini account , you will be still enjoying all the benefits that full-size FX account holders enjoy; including, same state-of-the art trading software, charts, resources, and tools, etc. This mini accounts are ideal for a new Forex trader to develop a disciplined, rational forex trading strategy without excessively focusing on profits and losses.

Also there is no maximum trade volume when you use a mini account. Although the standard trade size is 10,000 units, you are not limited to trading one lot. For instance, you can trade 10,000 units, 50,000 units or 200,000 units. This means as you become more seasoned and build up confidence you can slowly increase the size of your positions to maximize profits. In fact the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade. The ability to customize the size of the trade allows you to have a better risk management.
With less capital at risk in a Mini FX account, it is easier for you to develop a disciplined trading methodology, as well as the confidence needed to be a successful currency trader, without the anxiety and distractions that come with large Profit and Lose swings.

About the author:
Adrian Pablo; Forex trader and freelance writer.

You can download a free Fibonacci trading report at his website:

http://www.1-forex.com

Forex Advisory News

forex advisory

Go to the new RSS page and renew your subscription.]]>

IMPORTANT: Bing News RSS feed has moved!

The Forex Market” All Rights Reserved ... all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices or other information contained ...

Forex: GBP/USD consolidates above 1.5800

The Forex Market” All Rights Reserved ... all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices or other information contained ...

Forex: USD/JPY rallies to 76.70

Adding back some forex hedging, a Clearwire write-off ... Steve is sole proprietor of Northlake, an SEC registered investment advisor. GOOG is a net long position in the Entermedia Funds. The Entermedia Funds are long/short equity hedge funds ...

Google In The Penalty Box... For Now

an exclusive Expert Advisor Test Lab and daily currency market insights. Traders can bookmark the Vantage FX UK Forex glossary for ready-reference at: Trading derivatives and Forex carries a high level of risk to your capital and you should only ...

How Traders Boost Forex Trading Vocabulary with Vantage FX UK

Correct and wise decision: C Rangarajan, Chairman of Economic Advisory Council to the Prime Minister The ... CRR cut a result of RBI's intervention in forex markets: Ajay Mahajan, MD, FICC Capital Things would be a bit slow going forward.

RBI cuts CRR: Analysts say rate cut to follow in March

Traders who sign up for the 30 day Forex demo account also receive a free copy of Vantage FX's MetaTrader 4 User Guide eBook to help get them started. 2. Expert Advisor Test Lab Exclusive to Vantage FX, the Expert Advisor Test Lab allows traders ...

Five Ways to Sharpen Your Forex Trading with Vantage FX UK

the director of FX Advisory Services at HiFX. “China sits with a huge current account surplus and has no requirement to borrow from the international markets, as it has a three trillion-dollar thick mattress to sleep on. Where would you want to stay with ...

Forex focus: will China thrive in year of the dragon?

"The next target is now $0.8571, but that looks doubtful without a correction first," said Derek Rankin of Rankin Treasury Advisory. He said importers ... MARKETS AUSTRALIA NEWZEALAND/FOREX (+61 2 9373 1800/+64 4 471 4234) COPYRIGHT Copyright Thomson ...

Aussie powers up on USD, euro & pound after RBA surprise

Euro rescue funds should be increased to 1 trln Euros as the current rescue fund is not enoughto boost growthan advisor to the OECD Secretary said