What account can you open on Forex? Types of accounts
If you were wondering which account to open for trading on Forex and the list of accounts has baffled you, then let's figure out what types of accounts are and what is right for you. On Forex, there are several types of accounts - demo, cent, classic or dollar and professional accounts (the so-called about accounts). Each type has its own characteristics and is used in a particular situation. Let's say a strictly new demo and cent accounts are recommended for a beginner, and a professional ST speculator with a large capital is perfect for a Pro STP account. If you are interested in all the advantages of each type of account, read all the details below.
All types of trading accounts will be examined using the Forex4you broker as an example. Other brokers may have different trading conditions and account names, but the essence remains the same - different types of trading accounts are suitable for different levels of training, different capital and different trading strategies.
A demo or virtual account is good because a trader cannot lose his money, but only virtual. You can hone your trading skills as much as you like, test a new strategy or a trading robot - you cannot lose your own money on a demo. There is only one drawback of this type of account - the trader understands perfectly the “impunity” of his trade, therefore he often takes risks. In practice, this is expressed in the fact that the lot is overestimated in the demo, deals are opened in spite of the trading strategy, etc. For many beginners, the demo account is a kind of roulette.
That is why, after short trading on a demo, novice traders are recommended to switch to cent accounts.
Now the trader is trading on his own money, albeit small ones. After all, you can start trading, even having a deposit of $ 1 to 10. Although for the start we recommend $ 50-100 - this is how you can work with several currency pairs at once, using full-fledged money management.
One of the useful “chips” of cent accounts is the ability to trade swap free, i.e. without swaps. This is important primarily for long-term traders who keep their transactions open for a long time - from several days to several weeks or months. And don’t look that this is a cent account - there may be thousands or tens of thousands of dollars on deposit.
Given that the minimum lot is available specifically on cent accounts, such accounts are great for lovers of various networkers or Martingales. We are talking about trading advisors.
It is also worth mentioning that you can trade on a regular instant account (fixed spread, relatively low speed of order execution), and on the market account (floating spread, order execution speed is higher, there is also an additional one-time commission). A market account (the so-called NDD) allows you to really feel the market, since the broker brings the traders' transactions together (one buys EUR / USD, the other sells), for which a commission is charged.
A good trading account with a good speed of execution of applications. This speed is higher than on cent accounts, but lower than on Pro STP. Classic accounts are suitable for those who are not interested in swaps and who have sufficient capital (from $ 1,000). There is no limit on the number of simultaneously open orders; the history of transactions (from 6 months to infinity) is preserved. All in all, great bills for experienced speculators.
Pro STP Account
Open a Forex account like Pro STP, such accounts are suitable for professional traders with extensive experience and large capital. The fastest execution of applications, good entry points to the market, sometimes even at a better price than requested, and other advantages make this type of account special. But, again, only for experienced players with a lot of capital.
And what type of account is closer to you? If in doubt, start with a cent, and then the trading results will tell you the right direction.