Know the types of Forex Trading Accounts
Forex trading brings in 100% gain if premeditated properly. The chances of success: loss, in Forex trade is in 70:30 ratios. All trades are required to have ample knowledge and this trade especially demands knowledge to be a part of the success story. We are all aware of the fact that Forex market is a trade in which investments should notbe done blindly. However, getting result is difficult if investments are done reprehensively.
Accounts and their types
Before getting in to the detail of a Forex trade, one must understand the type of account one needs. Not all Forex traders would require similar account types.
- Cent Account
- Mini Account
- Classic Account
- ECN Account
These are the prime Forex trading accounts. The account types differ from each other based on few points that are considered an average requirement. They are:
- Minimum Deposit amount
- Commission on each transaction
- Nature of deposit (currency or wire transfers)
- The spread
- Minimum and Maximum position volume
- Maximum cumulative volume of positions
- Maximum number of positions
- Hedge margins
- Transaction placement
- Margin call/ Stop out
- Availability on internet banking
Explaining the account type in sync with these above mentioned points
Minimum deposit amount varies from each account. The minimum for a cent account is less than an ECN account. The advantage ratio is 1:2000 for all except for classic account, which is at 1:400. For all these accounts, the deposit is accepted via currency as well as wire transfers. The commission for trade is currently available only for ECN accounts. 1k is the minimum value position for cent and mini account and 10k for classic and ECN accounts. Maximum has no limit as such. Hedge margin is 100% for ECN accounts only.
Forex trading flourishes on correct speculation and a correct speculation is dependent on a sound understanding of the trading account types.