Foreign exchange trading is one of the most novel ways to earn money via online means. And because of the convenience that is afforded by the Internet and because there are more than 60 currencies existing all over the world, it is also considered one of the easiest profit-making machines. Forex trading used to involve only large corporations and banks because of the magnitude of the trades. However, since the coming of the Internet, forex trading has become accessible even for the average individual interested in dabbling in currencies.
To date, the forex market is considered the largest in the world, with a turnover of approximately $1.5 trillion a day. In addition, forex trading also operates 24 hours a day, unlike regular day trading sessions that last for only eight hours, giving forex traders an opportunity to buy and sell at any time they want. There are two kinds of forex accounts: the regular forex account and the mini forex account. For this article, we will focus on the mini forex account.
Mini forex trading
Small investors can get a good headstart in the forex trading market by first entering mini forex trading. Mini forex accounts are typically opened and accessed by traders who are relatively novices to the market and do not have enough resources to engage in a regular account. Mini forex trading allows the trader to deposit only $100 to be able to control a currency position worth $10,000. With regular trade, currency positions should be at least $100,000.
Mini forex trading, therefore, is one-tenth of the size of the regular forex trading account. It is a great way for small traders to get a feel of the industry and practice without having to shell out so much. Traders that do not have much funds and want to trade with only less than $10,000 are best advised to go with a mini forex trading account. Not only will this strategy allow them greater flexibility in applying various strategies, but it also gives them a longer staying power in the forex market without the risk of over-leveraging.
You might think its impossible to trade 10,000 worth of currency with just a meager deposit, but it is possible with mini forex trading. This is because you will have what is called ‘leverage’. Leverage enables you to trade more of a particular commodity than what your account holds and affords you the opportunity to reap great returns. Too much leveraging is risky, though, so be careful not to get too excited.
The benefits of the mini forex account are not really that different from the regular forex account. You will still be able to enjoy access to small spreads, a free trading platform, etc. But, as said earlier, perhaps the greatest advantage to opening a mini forex account is that you don’t have to spend so much to be able to see gains. You risk less money, but your earnings opportunities are still attractive.