Foreign exchange trading is not easy and if you want to achieve success in this volatile market, it is important that you choose a good trading account that suits your individual personality. The forex accounts available to traders include standard, micro and mini and you can make the choice as per your specific needs and requirements.
Micro trading accounts have become a popular choice of traders all over Australia as they have features that are similar to the standard account and enable traders to place smaller trades. If you are a beginner and do not understand the basic difference between trading accounts, let us illustrate it through an example. When you opt for a standard account, you may be able to place lots of 100,000 whereas in the mini account you can place lots of 10,000. With the micro account you can place lots of 1,000 units of your base currency.
Advantages of using a micro account for foreign exchange trading
The biggest advantage of opening a micro account for foreign exchange trading is that you need only small capital to open this account. It is an ideal choice for small traders who are trading on a budget. If you are a beginner, it is best to open this trading account as it provides you an opportunity to learn the fundamentals of this market without risking a lot of money.
Before you start trading in the forex market, you need to understand that there are inherent risks associated with this market. If you are not careful, you may lose big within a few trades. A micro account is one of the simplest ways to manage the risks of trading. As you will be placing smaller lots for trading, you may be able to minimise risks and maximise profits.
You will be able to practise different forex trading strategies, as the risk level is low. This can help you identify strategies that work best with different pairs of currencies. As the risk involved in trading with the micro account is less you may not lose big even if you have a losing trade. This helps protect your investments from big losses.
You can learn money management strategies like limit orders and placing stop loss orders on all your trades using the micro account. This can enable you to manage the risks associated with this market in an effective manner.
Tips for choosing micro accounts for foreign exchange trading
It is best to choose a micro account for foreign exchange trading from reputed brokers so that you may be able to get all the required features and functionalities in the account. You can choose brokers who are licensed and regulated by the Australian Securities and Investments Commission (ASIC) so that you get the best customer service and support from them.
When you choose a trading account that suits your trading style you may be able to execute a fast trade and take advantage of the trading opportunities available in the forex market. This can enable you to make consistent profits on your investments.