Pick a top broker offering the best forex account!
With so many different forex account types available, which one do you choose? Not to worry, we’ve arranged a list of the best brokers offering a good variation of demo, mini, standard and premium or VIP accounts to help you make a sound decision.
Forex Account Types: Which One is for You?
As you improve your skills and knowledge of forex trading, you move up the ladder of the various forex account types. Traders begin with demo accounts, establish and improve their novice skills in the mini account, and finally graduate to the standard account. For those confused about what if each of these options means, here is a brief guide. Remember that leverage means high risk. Always consider your objectives and keep the leverage as low as possible. Please note: In the U.S. the maximum leverage is 50:1 for majors and 20:1 for minors.
The demo account is the kindergarten of trading. Here you are typically granted anywhere between $50 to 100 thousand, which you can squander as many times as you like while learning the basics of trading. This process is mostly about literacy in the forex language. You learn about indicators, order types, currency pairs, and gain fluency in using the software, but training as a real trader is only possible with a mini account.
A majority of traders utilize the mini account during the early and middle phase of their careers. Mini accounts can be opened with as little as $50 sometimes, but at the moment a $1000 account with a lot size of $10,000 at 10:1 leverage is the most common configuration. Some brokers also offer a tiny $1 account with very low leverage termed a micro account.
It is important to recall that these numbers are but guidelines. There exist brokers with fully automated systems that facilitate trading with no minimum deposit requirement at all, at a leverage of 1:1. There also exist some firms that do not allow mini accounts.
Mini accounts are the high schools and universities of trading. There is no need to move beyond mini trading until you feel fully confident in your abilities.
A standard account has a typical minimum initial deposit requirement of around $1,000, but the floor can be as high as $10,000 in some cases. Leverage options are usually higher in these accounts (increasing the risk), with the standard lot being fixed at $100,000 per trade. Standard accounts generally make all the capabilities of the broker available to the trader, if there is no premium account offer.
Premium or VIP Account
The V.I.P account is utilized by high net-worth individuals who feel justified in maintaining account sizes in excess of $10,000. As the name suggests, this package comes with some premium tools that are unavailable to the typical retail client. Advanced trading choices, consultation with market specialists, and the availability of a personal advisor to aid in trading decisions are some of the exclusive advantages enjoyed by a V.I.P. Account owner.
‘Details about qualification requirements, the exclusive features of the account, and the nature and availability of the advice given differs greatly from broker to broker. There even exist some firms that specialize in providing forex V.I.P services to rich clients from the Middle East and Russia. Given the nature of the account package, and the negotiability of many details, it is a better idea to contact each broker about the details if you prefer this account type.
Individual, Partnership, Corporate Account Forms and Other Options
In the U.S. traders must choose between these forms for taxation purposes. The typical forex trader will be satisfied with an individual account, and there is no difference between these choices in terms of trading experience.