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Types Of Forex Account Offered By Brokers

Forex trading (more commonly known as currency trading) is a popular form of financial trading.

While share trading has apparently been around since time itself, Forex trading is a relatively new concept. Forex trading quickly gained popularity among beginners because of the high liquidity that currencies bring. If you're looking to begin this enjoyable endeavor of making money online, having a strong grasp of the basics is mandatory. The first decision you will be faced with when signing up with a broker is what type of forex account to choose.

The different types of forex accounts comprise of different features and limitations. Various forex trading accounts are suited to different levels of expertise. There are four account types offered by most forex brokers:

  • Micro account

This type of forex account is ideal for the amateur currency trader as it allows trading with small sums of money (as the name "micro" suggests). This reduces the risk involved and is suitable to learn the concepts and intricacies involved with currency trading.

  • Standard account

While the name suggests that this forex account type is suitable for all types of members, this may be misleading. Standard accounts are recommended for currency traders dealing with large sums of money and who are well versed in the field. The main reason behind this is standard accounts only permit trading large sums of money at a time.

  • Mini account

A mini account is midway between a standard and micro account and is sometimes used by experienced traders as well as ambitious beginners with a large budget available. Mini accounts are less commonly available than the aforementioned forex account types.

The above mentioned forex account types are all handled using the universally recognized US dollar. However, with the geographic diversity of currency traders, forex brokers supporting other currencies are now available. While these accounts are only slowly finding its way into currency trading companies, it may be convenient to create an account using the currency of your country of origin.

The minimum trading value mentioned above for each forex account is commonly referred to as lots. The lot size for the above account types vary depending on the forex broker. This article should give you enough information to make an appropriate choice to cater to your budget and skill level.