Investing Idea: Forex Trading (Part 2)
Yesterday we took a brief look at one of the reasons that forex trading is seeing a bit of a revival right now as an investing idea: It is possible to make money almost any time. Today, we look at how the mini forex account has been helpful in making the currency market more accessible to “ordinary” people.
Mini forex account
Prior to the mini forex account, it was not uncommon for someone to need a large amount of capital — often between $2,500 and $5,000 — to open a forex account. Few ordinary investors have that kind of money. However, much like online brokerages and dollar cost averaging have helped bring stock investing to a wider audience, the mini forex account has made it possible for more people to access the currency market.
A mini forex account is one in which smaller capital is required (usually between $250 and $500) to get started. This is because with the mini forex account, you are dealing with lot sizes of 10,000 units of currency, rather than the regular sized lots of 100,000 units of currency. The smaller lot sizes mean that you do not have to use as much capital.
Of course, it also means that you will not make as much money as rapidly. However, the leverage for many mini forex accounts is actually the same as the leverage offered by regular accounts. (For forex trading, most leverage is either 400:1 or 200:1.) It is important to note, though, that even though it is a mini forex account, it is possible to lose a great deal of money. Forex trading is always risky, and you should take that into account before deciding to trade.
Disclaimer: I am not an investment professional. Nothing in this piece or on this Web site should be construed as investment advice. Before making investment decisions, do your own research and/or consult with an investment professional. All investment comes with the risk of loss. You are responsible for your own investment decisions and any loss that may result from your decisions.
