Understanding the Different Forex Account Types



Forex Spreads

 

Forex trading was initially something  reserved for large banks and major institutions. With the introduction of retail Forex trading many things have changed to adapt the retail trading market. Even with increased leverage it was very difficult for retail Forex traders to trade the same size as these large institutions.

Forex brokers quickly learned that they needed to get creative and inventive in order to accommodate the new retail Forex market. One of the most inventive ways of accommodating retail Forex traders was the introduction of the forex mini account. A standard lot is equal to $100,000 something that not everyone would be comfortable trading. The mini account allowed traders to trade in a fractional increment of $10,000. This was a very similar to what happened with the futures market with the S&P 500 contract and the introduction of the E-mini S&P. these mini during derivations of these major markets allowed the individual Trader to participate where before he could not.

Forex brokers have also learned that there are other ways to accommodate their variety of clientele. Many of these Forex brokers have different Forex account types for the different account sizes and trading styles of their clients. Those that deposit with those with larger amounts will tend to have more narrow spreads and those with very large deposits may have what are known as core spreads with a commission added. Reach Forex trader should closely evaluate his or her situation to find out what type of account they would really be closer to. They can then calculate and what the spreads that the broker is offering and the leverage and to see if that broker is a particularly good fit for them.

To learn more about Forex account types please visit http://www.clmforex.com/trading-account-types/

 

Trading Forex and Derivatives carries a high level of risk, including the risk of losing substantially more than your initial investment. Also, you do not own or have any rights to the underlying assets. The effect of leverage is that both gains and losses are magnified. You should only trade if you can afford to carry these risks. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Financial Services Guide (FSG) and Product Disclosure Statements

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