Who Should Trade a Mini Forex Trading Account?A mini forex trading account is designed for those who are new to forex trading or when the trading account balance is less then $10.000. Mini forex account key points - Only $250-$300 to open Mini forex account advantages Build up confidence starting small A trader can trade a mini forex account using 1 mini lot and building up lot size slowly when he makes profits in his account. A general rule is to trade ONLY 1 mini lot for every $1000 a trader has in account. For example, if an account is worth $5000, trader can take up to 5 mini lots. Develop a forex trading strategy Because on a mini forex account, pip value is $1 = 1 pip, trader can pay more attention on building a solid trading strategy without focusing on floating profit & Loss (P/L). Most traders with a small account balance trading on a standard account will tend to base trading decisions on profit &Loss and not on their trading strategy, they are emotionally too involved. Their account balance fluctuations are so important that they even can’t think developing a proper trading strategy. Their account size is too small for the lot size they take and every small pip loss can lead to a painful loss in their trading account. Such traders will tend to take profits (too) soon and cut losses too late because they always hope the trade will make a reverse and come back. Consider the following example: A trader has a $2000 trading Account. When trading a forex standard account, a 37 pip loss will result in a $370 loss in his trading account or 18.5% of his account balance. When taking the same trade on a forex mini account, a 37 pip loss will result in a $37 loss in his trading account or 1.85 % of his account balance. Conclusion By starting with a Mini account- a trader loses only a small amount on every losing transaction making it easier to stick to a disciplined trading strategy, in the long rum, this will lead to much better trading results. Toby Smitz - Daily Operations Mini Forex Trading
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