Forex trading meaning is trading foreign currencies online for making profit. Mini Forex trading is a kind of online currency trading with lower lot size which is good for beginners, Just like any other form of any trading in any part of the world, foreign exchange trading also has its risk and opportunities.
A good trader always tries to explore the maximum opportunities available and takes only calculated risk.
What Is A Mini Forex Account
There is many types of Fx trading such as demo trading, micro trading, mini currency trading and standard trading, All of these trading accounts provide by Online Brokers.
The word mini in Forex indicates the term mini currency trading. The concept of mini lies in the size of the lot or contract so first we should talk about the lot or contract.
Selling and buying of the currency pairs in the foreign exchange market goes in the contracts or lots. These are contracts that are bought or sold.
Contracts or lots can be bought or sold when the currency pair is expected to go high or low. If the trader expects the price of the currency pair to go high then he can buy the contract and if the trader expects the price of the currency pair to go low then he can sell the contract.
In the market, the value of the standard contract or lot is 100,000. It means that if you are buying or selling one standard contract or lot then you are paying or earning $100,000.
On the other hand, the value of the Forex mini contract is only 10,000. It means the value of the mini FX trading contract is only 10% of the value of the standard contract.
The value of the Forex mini contract or mini lot is 10,000. It means that if you are buying or selling one mini contract or lot then you are paying or earning $10,000 only.
Mini Forex lots
Although the Forex mini contract is much smaller than the standard contract but the mini contracts or mini lots are not the smallest one.
The micro trading contract or lot is smaller than the mini contract with the lot size limited to 100 only.
Now you have the clearer grasp of what the contract or lot in the market is. This understanding will help you to select the type of account that is most suitable to you according to your trading and investment capabilities.
Which Traders Should Have A Forex Mini Account
Not only the beginner traders but also the expert traders should have a Mini Forex trading account because of the too many advantages associated with the Forex mini accounts.
The beginner traders should have a FX mini account so they can learn more without losing more and the expert traders should have a mini Forex account so that they can understand that how the market is moving before placing any big trade.
It means the foreign exchange mini accounts are a great way to learn the risk management. The advantages associated with the Forex mini accounts are listed and explained below.
Opening a foreign exchange account was an expensive business earlier but the introduction of the mini Forex trading accounts and the micro accounts have made the business of currency trading easy and affordable for everyone.
The mini FX accounts can be opened with as low as $500 and some Forex brokers also allow the registration of the mini currency trading account with as low as $250 only.
So the facility of the registration of the foreign exchange mini accounts provided by the brokerage firms is a great opportunity for you if you wish to become a trader but do not have thousands of dollars to invest in the market.
The mini FX accounts are also an opportunity for those experienced and rich traders who want to study the market movement before taking any big investment decision.
The mini currency trading accounts are the best choice for any trader who wishes to run a trading account with an amount less than $10,000. So if you cannot afford to invest more than $10,000 then you fall in the range of those traders who should trade from the mini accounts.
Leverage is the concept in the foreign exchange market that makes it different from other financial market in the world.
The leverage provided by the mini brokers in the market is much more than the leverage offered in any other stock trading market.
The leverage provided to the traders by the brokers in the FX market is 100:1 and some mini Forex brokers also allow the leverage of 500:1.
It means that with just $100 you can open a position of the value of $10,000 when the leverage is 100:1 and with just $100 you can open a position of the value of $50,000 when the leverage offered by the broker is 500:1.
Now the question comes that how can you open a position of $10,000 by just paying $100.
How the extra $9,900 will come to the traders to open such a valuable position? Who will pay the difference? The answer is simple and focuses on the capability of the mini Forex brokers.
The difference is paid by the brokers. So if a broker is providing the leverage of 400:1 then it means that the broker will be investing 400 times your money in your trade orders.
Thus the conclusion comes out that the leverage in the market is actually the money of the broker that is placed with the money of the traders in the trade orders.
After a position closes, the money of the broker is returned to the broker. It does not matter whether the trader has earned profit or suffered loss; the money of the broker goes back to the broker but the broker does not earn any commission.
Yes, in the market, the mini Forex brokers do not earn commission. Now the question comes that what will be benefit of the broker from this trading. The profit of the brokers depend on the difference in the spread.
Currency trading was sometime the business of only the big financial institutions because the big financial institutions were only capable to place big trade orders by doing big investment in the market.
The mini accounts have removed this limitation by facilitating the smaller trade orders. The smaller trade orders can be placed by the small investors also.
The Forex mini accounts also help the traders to gain the inside knowledge of the market and build up their confidence.
Once the knowledge has been gained and the confidence has build up the small investors and the new entrants in the market can be more comfortable in the FX trading business.
There are some other trading methods for the small traders such as the Base 10 Trading, Micro accounts etc but all the advantages of the Forex mini accounts are not provided in any other types of currency trading.
So the registration of the Forex mini accounts should be preferred by not only the beginners but also the experienced players of the market.
If you want to open your mini accounts and looking for the best mini brokers you can easily contact us to help you choose the best broker allows you mini Forex trading.
UK Forex Brokers List
Plus500 – IG Markets – FxPro – CMC Markets – eToro – LCG – ETX Capital – HYCM – Pepperstone – Markets.com – FXTM – AvaTrade – XM.com – easyMarkets – Alpari – City Index – 24option.com – GCI Trading – IQ Option – Tradeo – FxOpen – Trade360
US Forex Brokers Reviews
Swiss Forex Brokers Comparison
Denmark Forex Banks
Japan Fx Brokers
This Forex Brokers list will update with more online Foreign exchange brokers.