Forex trading question about mini accounts ?
Monday, June 14th, 2010 at
11:18 pm
I am interested in learn more about forex trading and possibly after some research opening a mini account to start small. I have visited a few websites and something I dont fully understand is How can it be advertised that you can open and start trading Forex with a minimum deposit of say 0 and then the it says the minimum trading deal size is 00 ? I don’t get it
Tagged with: mini account • minimum deposit • trading forex
Filed under: Forex Mini Account
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FX trading is not for the small investor. You likely will lose your investment very quickly.
Think of the other side of the trade. In your example of $250 investment, the ‘broker’ that will open such a small account is really just out to collect money from you.
You can’t check the interbank or get real time FX rates without a sizeable investment. The rate you get quoted from the ‘mini broker’ is often a made up rate that is wide — in and in favor of the broker. When you attempt to close your contract the fees and wide spread will wipe out any profit.
My advice is to steer clear until you have enough capital and experience to trade contracts with a reputable brokerage that will require a minimum capital level.
You may need to understand the concept of leverage in forex trading. With a 1:100 leverage, you would only need $25 to control $2500. Therefore, if you open an account with an initial deposit of $250, it is possible to trade with a deal size of $2500 since you are using leverage.