Once the domain of large banks, multi-national corporations and hedge fund managers, the forex market can now be traded by just about anyone with a recent computer and an Internet connection. This development has effectively opened up the forex market, the largest capital market in the world, to individual traders.
Also, those interested in trading forex online will often find live forex trading accounts readily offered by a myriad of online forex brokers. Nevertheless, for access to a live trading account, a small amount of money is necessary to start trading forex online.
Furthermore, selecting a good broker to handle your online forex trading account can really save considerable money and frustration in the long run. You will need to make sure that the broker can open the type of account that best suits your needs, as well as that they allow your favored options for depositing and withdrawing funds to and from your account.
The following sections contain a list of some of the more common types of live forex trading accounts currently offered by online forex brokers, i.e. we’re not going through demo or practice accounts which we have already covered.
Live Forex Trading Account Basics
In addition to providing demo accounts for practice, most online forex brokers offer a wide variety of funded account types that you can use to trade forex with in a live trading environment. The features of such accounts typically suit traders of varying degrees of sophistication and who have the ability to fund their accounts in different amounts.
The type of live account chosen will usually be determined by the amount of funds available for deposit. Nevertheless, some traders might also base their live account choice on pricing quality, the minimum transaction amount or lot size, or the leverage ratio offered per trade.
Mini Live Accounts
Most forex online brokers offer prospective clients a basic account type which can typically be opened with small deposits ranging anywhere from $25 to $500.
These mini or micro accounts often come with some form of educational tool for training, as well as access to the broker’s trading platform and basic technical analytical tools. They can also be an excellent way of trying out a new forex broker.
Also, these mini accounts tend to have small minimum dealing sizes and low margin requirements. This can make them ideal for someone looking to start trading forex, but who does not wish to take on a lot of risk in order to learn the ropes.
Standard Live Accounts
Standard live forex trading accounts generally offers a wider array of features depending on the broker and the amount of the initial deposit.
The standard live account also usually has a higher minimum initial deposit that typically ranges from $500-$10,000, along with higher minimum dealing sizes and tighter dealing spreads.
Basically, standard live accounts tend to offer more services of a greater level of sophistication than basic accounts. In addition to the broker’s trading platform, live standard account features can include such things as:
- SMS mobile alerts
- Personal access to dealers for market information.
- Higher-end trading analysis software.
- Trading signal alert services.
- Access to news wires like Reuters.
- Proprietary market commentary.
- Support for automated forex trading.
V.I.P. Live Accounts
The V.I.P. accounts offered by many online forex brokers usually make up the highest account type available to the individual forex trader. Such accounts will generally appeal to seasoned traders with a high level of sophistication who desire the best service the broker can provide.
Furthermore, this type of account generally requires a large initial deposit of at least $10,000 or more. Also, customers of this caliber usually qualify for the tightest dealing spreads and direct access to the company’s dealing desk. This type of account also tends to have the highest minimum transaction sizes.
Besides enjoying all of the features of regular live accounts, V.I.P. accounts might also include personalized trading reports and market alert messages sent to a cell phone, as well as calls from dealers to provide customized market updates.
Choosing a Live Trading Account Type
Basically, choosing the right type of live forex trading account for you involves having a good knowledge of your personal trading needs. Once you have addressed those key requirements, you will then want to assess what each prospective online forex broker can offer in terms of features that will benefit you.
Other important forex broker considerations include their flexibility in making deposits and withdrawals and how well regulated and capitalized they are, as well as how efficient, ergonomic and reliable their trading platform is for your intended forex trading purposes.
Back to why you should open a mini live account first.
Are you ready to start choosing your forex broker?