Micro Forex Account Tips And Tricks
As forex trading becomes more and more popular with retail traders, it is becoming easier to open a micro forex account with a very small amount of money. People who want to get started with foreign exchange trading without risking their shirt can open accounts with some brokers with just $25. This means that just about anyone can begin trading.
The problem, of course, is that with such a small balance you have to take huge risks in order to have any chance of making more than a few cents a day. Taking huge risks will wipe you out for certain, but making a few cents a day quickly becomes boring and can seem like a big waste of time. Many people, therefore, either lose their $25 a few times over and then conclude that forex trading ‘doesn’t work’, or lose interest.
However, there is a way to use a micro forex account that can bring you the results that you dream of … in time. There is no reason why you should not profit from a small account just as from a big one, but you must understand that you need to start with $100 to $500 and look out for a good broker.
You will also need a system that is suited to a smaller account. This means no big risks. Some systems seem attractive because they advertise a win rate of around 90%, but this inevitably means that when a loss does occur (and it will) it will be big. If you have a micro forex account you are likely to be using relatively high leverage so you want to avoid that situation.
Another good use for a forex micro account is for the beginner who does have more to invest, but wants to practice his skills or try out his system at low risk. You have probably already used a demo account but there is a lot to be said for going live with real money sooner rather than later, while keeping the position size very low. This allows you to trade at some risk and discover how you react to the stress of the live market. Assuming you make out okay, you can then gradually add to the balance of your funds until you are ready to move up to a forex mini account.
Some traders also like to have a micro account in which they test new systems or ‘play’ with hunches or new ideas. This is fine if you can afford to lose a small balance over and over. Playing at forex or trading without a clear system is almost never profitable for any length of time. However, for traders who cannot resist the odd trade on the side, using a micro forex account is better than opening a trade in your regular mini or standard forex trading account.