What Is A Forex Micro Account

There are an ever-increasing number of people trying forex trading for the first time. As their numbers have grown, brokers have responded by making it easy to open a micro forex account with very little money. Some brokers will allow beginners to operate an account with well under $50 – maybe even half that sum.

But trying to trade with such a minute margin cover carries is also a problem. Either you’ll get bored very quickly with making miniscule profits each time you trade and walk away from the whole idea of a micro forex account, or you’ll start taking big risks in order to make a little more money. Taking huge risks in the forex market will almost certainly wipe out your account in short order. Then you will again have two options – top up your account with another $50 or so and go through the same cycle of some small wins, followed by a big loss and an empty account – or you’ll just decide that trading currency is only for the professionals.

However, you can use a micro forex account in a more sensible way that can produce the income you hope for… in time. You can make profits from a small account, but you should not start too small. It is more realistic to start with a reasonable sum (anything between $200 to $600 would be OK), find a broker, and then use a system suitable for a small account.

Not all systems are right for small accounts. You’ll see systems being promoted that promise success rates in the nineties (per cent), but be careful. With a micro forex account you are probably also be using quite high levels of leverage, and high leverage means high losses when the inevitable loss does occur, so you can’t afford to take big risks. What Is A Forex Micro Account

For the beginner with slightly more money (and you should not be in this business if you don’t have a reasonable sum to work with), another good idea is to use a forex micro account to practice on, or test a system without taking too many risks. You may well have used a demo account and dummy money already, but it’s not a bad idea to go live with real money as soon as you can. If you use a micro account you can trade but keep the position size very small.

This allows you to make trades, assume risks in the real world with real money, and discover how you react to the tension of the actual market – even if you are not playing for very high stakes. If you do okay, you can then slowly put more money in your account and eventually think about moving move on to a higher and more adventurous level, the mini account.

Even some experienced traders like to dabble in a micro account with which they try out a new approach, see how well their intuition is working, or simply try new ideas. This is fine if you don’t mind losing small amounts over and over. But if you “play” at trading without a specific system, you might be right a few times, but you are unlikely stay in profit for very long.

However, if you just cannot resist the odd irrational trade, utilizing a micro forex account to indulge yourself is probably better than opening a trade in your normal mini or standard account – where your losses are likely to be much larger when the “play” turns serious. What Is A Forex Micro Account