As soon as you enter the world of forex, the first and the foremost thing that you would realize is that forex trading is much more than
just looking at the prices of currency pairs and opening and closing trades at your wish. Forex trading is far more complex than it seems to
be and this is the reason why a majority of forex brokers end up losing a significant portion of their investments in the forex market.
Forex trading is challenging in nature and this is the reason why you need to find the best resources to learn about the market in order to
become profitable as a forex trader. But often learning is not enough; the learning part needs to be supplemented by the practice part.
Although practice can be done on a demo account, a demo account does not represent what the real market situation is. This is the reason why
you need to use a real account for the purpose of practicing.
Most new traders make the mistake of opening a normal trading account for the purpose of entering the market. What they need to realize is
that a standard account is more risky than a mini account and hence it is better to start trading with a mini account rather than a standard
account.
A mini account is basically a smaller version of a standard account but has its benefits over a standard account for novice forex
traders. Here are a few characteristics of a mini account:
The minimum deposit amount is quite less as compared to a standard account
The lot size is of 10,000 units instead of 100,000 units in a standard account
The default margin is generally set at 0.5%
Leverage of up to 200:1 is allowed in such an account
Contrary to what most of the people think there are no downsides to using a mini account for the purpose of investing and trading in the
currency market. Apart from lot sizes there are other benefits such as good trading platform, free charts and tools, low spreads, etc.
Another advantage is that there is no maximum limit related to trading in a mini account. This means that you are not limited to trading
only a few lots, you have the freedom of trading as many lots as you require.
Thus it can be quite easily said that mini forex accounts have their own advantages and are generally considered to be great when it comes
to formulating and fine tuning trading strategies. Even seasoned forex professionals understand the importance of mini accounts, this is the
reason why they develop, test and streamline trading strategies on mini accounts before applying those strategies to their standard trading
accounts.