A Forex mini account is a smaller version of the standard Forex account. A standard Forex account requires approximately $2,000 as the minimum requirement for opening an account. A mini account can be opened with as little as $$400.
Mini accounts trade what are known as “mini lots”. The pip value for a standard Forex account in the EURUSD is $10, so if the market moves 100 pips in your favor your profit would be $1,000. Your pip value for a mini account, however, is $1 and if the market moves 100 pips in your favor your profit would be $100.
If you'd like to open up an account with even less money than any mini account there is also a “micro account”. A micro account can be opened for as little as $25. If the market moves 100 pips in your favor in this type of account your profit would be $10.
The smaller Forex accounts such as the Forex mini account are extremely handy for those getting started in Forex trading. Although there are demo accounts available which require no real money to trade, a mini account can serve a unique purpose. That purpose is that you will be trading with real money. Trading with real money will help your trading more closely simulate trading a standard account.
You see, with a Forex demo account you really have nothing at risk. Truthfully, people will tend to “play” with “play money”. This is the reason so many beginning Forex traders do amazing things in their Forex demo account but then do terribly when trading with real money in a standard account.
Your objective while trading your Forex mini account is to closely simulate what you will do when you step up to a standard account. You will have an opportunity to put your trading systems to the test while at the same time having a smaller amount of money on the table.
Make certain that you treat your mini account with the same level of respect and risk control that you will use with your standard Forex account. This will help you develop the necessary level of discipline to trade Forex successfully. When you are successfully able to trade your Forex mini account you can then step into a standard account with confidence.
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