When you start trading on Forex, it is very important to take into account several factors. The first is the aim of trading. For sure, it is a well-known fact that the main goal of every type of trading is to get a profit but when you choose the market for trading, you need to know what is the specific goal that brought you to this market. Is it to get high profits in a short period of time or to get a profit step by step, with minimized volatility and high flexibility? Answering these questions will help you to determine your future movements during the trading process.
Another important factor is your knowledge and experience. If you are a beginner and you do not know much about tricky strategies, effective management, and profitable trading rules, we advise you to start with conditions that will provide the lowest possible level of volatility. It will be very wrong if you choose the complex account type with many influential factors.
The next significant issue is your resources. It is essential to know exactly what you are ready for. This includes the unpredictable occasions, the influence of external factors, the level of competition, the demand and supply level, risks, your amount of resources, and the period of trading.
In this article, we will review different Forex accounts from one of the very prestigious and popular platform called XM which suggests to us a diverse possibility to find the one that will be maximally close to our interests as well as the factors that we have mentioned earlier. They recently suggested to traders a new type of Forex trading on cent accounts which, is a new window of opportunity.
Before Choosing The Account Type For FX Trading
There are several features that describe the possibility of good trading on a specific type of account. First of all, you have to make sure that the platform that you chose, is safe and legit. You need to do a little research before making the decision and review comments, reviews, rates, and the reputation of the platform. Each trading platform suggests different accounts for beginners, experienced traders, and for those with different aims.
Even though there are plenty of differences between account types, there are several key features that determine how good and suitable the account is for the trader. The first such kind of feature is accepted currencies. For those, who do not know yet, Forex trading means trading with different currency pairs. So, the accepted area of currencies determines your movements as well as the level of impact of external financial factors, connected to currency sustainability rates.
After determining the currency pairs, it is significant to choose the leverage level. There are many platforms that offer irrealistic leverage rates with enormous amounts of profits. If you use leverage correctly, it can help you essentially for effective trading. Otherwise, it will cause higher losses. Do not choose too much high leverage. Choose the one with realistic options.
The next is the bid-ask spread. If you do not know, this is the difference between the highest and lowest prices for buying and selling. This means that bid-ask determines the liquidity and trading possibilities.
To provide successful trading, you need a customized trading plan where you should take into account the questions which we asked at the beginning of the article.
The Types And Differences Between Forex Trading Accounts
As we said earlier, you have a free choice to select different accounts for FX trading where the main difference is their structural complexity. For example, let’s take a look at Micro account which is very highly demanded from Forex traders. This is the account where you can trade with different 11 currencies on the market. It has pretty acceptable leverage levels which depend on the size of the money. It does not require commission and the maximum contract size for each lot is 1 000.
Similar to the Micro account, Standard is also good for experienced Forex traders because similar to the previous one, you can trade with 11 currencies and the commission is not under the requirement. The leverages are changing from 1:888 to 1:1 000 within the different amounts of money and the contract size is higher with 100 000 for 1 lot.
If you are a beginner and you want to get a not-complex and easy trading experience for the Forex market, we advise you to have an Ultra-low account that customizes the needed indicators to maximize the easiness and effectiveness of trading. This is the account with 6 accepted currencies, great leverage, and different contract sizes from 1:1 000 to 1:100 000.
Different is a shared account where you can only trade with USD, with 1 share contract size, and without leverage. Remember that in a shared account, the commission requirement is included and the maximum number of orders per client includes fewer positions than in other types of accounts.