Apiary Fund Blog

Forex Account Types

[fa icon="calendar"] Feb 7, 2017 8:17:11 PM / by Vilas Kusumahardja

Vilas Kusumahardja

As we've mentioned before, capital is the life blood of your trading account. The Forex account types you trade will affect how you first protect, and then grow that capital. A trader wishing to open a new account can generally choose between 3 types of Forex accounts: Standard, Mini, and Micro (Nano). These accounts differ in provided leverage, and, depending on the broker, different minimum deposits required to open that account.

coins-952540_960_720.jpg

Standard Accounts

Most frequently opened is a Standard Account. The capital requirement for a Standard Account generally starts around $5,000 and allows you to trade with a standard lot (worth $100,000); the related margin requirement is $1,000. At this size, one pip equals around $10 (for major currency pairs). Hence, if in one given day a trader gains 20 pips, it means he makes $10 x 20 pips = $200. However, if he losses 20 pips, it will cost him $200. It's important to note that just because you have a standard trading account doesn't mean that you are required to trade with one lot size, you always have the option to use lower lot sizes.

Mini Accounts

Usually preferable for a new trader, or a trader who just wants to test a new strategy, a Mini Account generally starts with capital requirements around $500. As you probably guessed, a Mini Account allows you to trade with a mini lot size. One mini lot is worth $10,000 with a margin requirement of $100. One pip in a mini lot is equivalent to $1, making the potential loss one-tenth of a Standard Account.

Micro Accounts

A Micro (Nano) Account reduces the potential loss even more; it is one-tenth of a Mini Account, though it is not offered by all brokers. For new traders not familiar with trading, a Micro Account or demo account would be a good option to start with. The capital requirements for a Micro Account can start from $25. One micro lot is worth $1,000. The margin requirement is $10, and one pip in a micro lot is around ten cents.

New Traders

Both Micro and Mini accounts are a good option for new traders because of the reduced potential loss (compared to the Standard Account). At the Apiary Fund, all of our traders start on demo accounts of $10,000. This allows the trader to gain experience with no risk while we teach them how to trade. However, once a trader has passed our Beeline to Funding program, the Apiary Fund places them in a real, funded account to see what they can do.  Learn more here.

One last note...

In Forex trading, capital is crucial; however, knowledge extends beyond capital. If the trader has skill and knowledge, they can compound a small capital account into a large one. But, if a trader only depends on the large capital he/she has, the money is going to the market in no time. Black Wednesday, 1992, when George Soros beat Bank of England is a solid proof that knowledge beats capital.

 

Happy Trading!

Topics: Forex, Forex Lingo

Vilas Kusumahardja

Written by Vilas Kusumahardja

Originally from Indonesia, Vilas began trading ten years ago to support his love of travel. He figured that, as long as he could find an internet connection, he would be able to support himself. In 2008, he came to the United States and a year later, re-learned everything he thought he knew about forex. Now, he places trades using support and resistance, utilizing signals from EA's. Vilas helps at the Apiary Fund as a trader support representative managing the Apiary Fund blog and answering questions in the forum.

Subscribe to Email Updates

Recent Posts