Online Foreign Exchange Trading Using a Mini Foreign
currency exchange trading Account
The introduction on the internet and huge growth of home computers has had a massive affect on foreign exchange (forex) trading. Now, no longer is forex the realm of large institutional banks and wealthy individuals. Today, the world of foreign currency exchange trading is open to all. All you need is connection to the internet, a computer, and a mini foreign currency exchange trading account.
What is a mini foreign currency exchange trading account?
Unlike previously, when forex trader had to have large trading accounts with forex brokers, today forex broker will allow individual customers to open an account with them for as little as $250. With the initial deposit of $250 in the account, the forex trader can start to trade. This type of account is known as a mini foreign currency exchange trading account – because of the small amount of deposit needed in order to open the account.
What can I do with my mini forex account?
The limitations imposed upon you with a mini forex account will vary depending on the forex broker with whom you opened the account. In some cases mini forex traders are only allowed to trade the amounts they have on deposit with the broker. In other cases, forex brokers allow mini forex accountholders to leverage trade, which means you can trade by borrowing from the broker. Sometimes forex brokers will allow you to leverage trade up to 100 times the amount of your deposit, so if you have a $250 mini forex account, you can trade forex valued at $25,000!
What are the benefits of a mini forex account?
The primary benefit of a mini foreign currency exchange trading account is that it gives you easy access to the foreign exchange market, thus an additional way to create profits on your savings. Second, with internet access and a home computer, using a mini forex account is an ideal way to progress from dummy foreign currency exchange trading, using software on your computer, to full-blown foreign currency exchange trading, without having to risk losing all of your life's savings. Both of these allow the average man in the street to know what it feels like to be a forex trader.
Are there any restrictions?
Yes, there could be restrictions placed on a holder of a mini forex accountholder. For example, some forex brokers do not allow mini forex accountholders to trade in certain “exotic” currencies, such as third world currencies. Instead they limit your trading activities to the main currencies of the world, such as the Dollar, Pound and Franc.
Will I get the same level of support?
This is a very important question. As a mini foreign currency exchange trading accountholder you cannot expect to get the same level of services as those you have full-blown accounts with the forex broker. At the same time, certain services provided to other accountholders should also be made available to you – for example, you would still want to see real time prices, a good forex software package and even forex signals being made available to you as a mini foreign currency exchange trading accountholder.
Is there anything else I need to consider?
Yes, before you open a mini account with a forex broker, double-check to see what the broker's fee structure is. Make sure that if you are paying the broker a commission fee, you are getting the same level of service as all other commission payers, such as 24-hour IT support, etc. Also, with such small amounts being traded, your margins of profit are going to be very tight, so make sure the spread offer is competitive and that the commission fees do not eat up all of your foreseeable profits.