Mini Forex Accounts
Mini forex accounts describe an account within a forex brokerage that allow the customer to participate in trading FX with fractional minimum account size to the “real” forex accounts.
The mini FX accounts are possible due to the fractional trading sizes, with one mini lot being a fraction of one actual lot in the interbank forex market.
This way, the margin requirement and account size can be fractional in size as well.
Trading with Mini Forex Accounts
Because the trades placed with mini FX accounts are placed outside of the interbank forex market (due to their size), the marketmaker for the mini trading lots is usually the same brokerage that you have the mini forex account with.
But, because the brokerage can hedge risk effectively in the interbank market, they can (usually) also offer comparative spreads and comparative market prices to the actual forex markets.
However, you’ll find differences in rollover rates (rates paid to or subtracted from an account held overnight) that will affect your trading performance. Therefore, it usually pays off to compare mini FX accounts to find the best rates on overnight positions (in addition to the most competitive spreads).
Mini Forex Accounts – Providers
With Internet, the popularity of mini FX accounts has skyrocketed. In fact, many stock investors seem keen to spread their risk by taking positions on the forex market with mini FX trading accounts.
There are tens of providers available for mini FX accounts. These providers differ in, for example, overnight rates, trading spreads, and maximum leverage rules, so you should take your time comparing the offers.
In addition to comparing the mini forex accounts, compare the trading platforms available. There are huge differences in the ease of use and interface design between trading platforms.
The choice of a platform may, in fact, affect your trading returns (you have to have the ability to use the platform correctly and quickly), so choose one that you’re comfortable with.
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