As the word implies "Mini Forex" is tiny, that means the amount to be invested is less and the risk factor is also less. It is designed in such a way that a person with no prior experience in Forex trading can venture into it without risking a huge amount of money. This is an approach form brokers to attract the people with adequate knowledge about Forex but who have never ventured there. The accounts of a "mini' Forex is available for the amount of hundred to two hundred US dollars. The regular Forex account is tenfold expensive. This kind of Forex trade accounts also have an advantage that it is comparatively risk free.
The person losses nothing but his deposit if he fails to make adequate gains form his first trading venture. This is the reason for the "mini" accounts to get popular among the beginners. This is a stepping-stone and also a training zone for a beginner and it lends the user the flexibility to experiment more. Mini accounts make the person capable to trade currencies up to hundred fold more than the deposits. This is made possible by furnishing a margin. Margin is the amount furnished by the trader while purchasing huge amounts of currencies.
This amount has to be furnished by the trader; however, the brokers are ready to advance the amount to the trader at this stage. In case of losses the trader is indebted to the broker for the total sum of the deposit and the margin that they have loaned. However, this method has its own significance that it allows a person to trade huge amount of currencies with minimal capital.This method allows the trader to trade only up to the amount proportional to the margin. If the margin in the account at any stage gets lower than the necessary amount then the account of the person gets partially freezed.
This measure is known as the guaranteed limited risk, and is intended to protect the brokers because it is them who losses money in case the trader fails. Thus it implies that while venturing mini Forex trading it is essential to keep an eye on the margin balance available with in the account. The trader can also issue 'stop loss orders' whenever necessary to keep the margin amount in control.
Thus mini Forex is a method to be adopted by those who have low resources for investment. It allows the user to trade huge amounts with less investment in the form of deposits of just $100-$200. The chances of loss are high when the trade fails and has a huge margin amount loaned.
Given the pros and cons it is upon the person to decide whether to venture mini Forex or not.come to my blog get the best Mini Forex Trading Strategy.
Ivan is the owner of Forex Million Dollar, which can find forex trading info. |
1 comment:
ForexTrendy is a sophisticated program capable of recognizing the most profitable continuation chart patterns. It scans through all the charts, on all time frames and analyzes every prospective breakout.
Post a Comment