If you are intrigued by the idea of trading in foreign currencies, there are ways to learn the trade without bankrupting yourself. There are Forex software programs that allow you to trade virtual money so that you can experience exactly how it is done. When you’re at the point that you believe you are ready to start trading with real money, a Forex mini account may be a good first step.
These accounts can be opened with only $300, while regular Forex accounts require $2,500 or more. Owners of Forex mini accounts report that the larger Forex traders are not privy to any more information than they are, so they are only as likely as any other investor to be taken advantage of on the market.
Also, owners of mini accounts only have to have $50 as a margin deposit for a $10,000 trade. That is leverage of 200 to 1, which is a lot for such a small investment. Of course, a margin account is risky, so investors must be sure not to go into foreign currency trading based on hubris, or they could definitely get in trouble. For more information and tips about mini accounts: Browse more
With Forex mini accounts, you can set up a stop loss provisions in the same scale with your account size, and you actually have more flexibility with customizing trades and minimizing risks. Should the equity in the account (the total floating value) drop below the margin requirement of 1% per trade lot of $10,000, the dealing desk will close the position, thus minimizing losses.
Many brokers offering Forex mini accounts allow you to first open a free practice account so that you can learn to understand live buy and sell prices and make trades accordingly without risking the loss of real money. The demo accounts will let you play with $50,000 in virtual money that you can use 24 hours a day in online Forex trading.
With the growing popularity of Forex trading online, investors must be very careful, even if they feel they have done well with their demo account, to choose a Forex broker that is honest. Forex trading scams have exploded over the past year possibly due to fluctuations in the foreign currency markets, and possibly due to the fact that with exchange rates more in the media spotlight, more people are trying out foreign currency trading.
Remember, trading foreign currencies off exchange is very risky, and quite possibly fraudulent. So be careful even with whom you open a Forex mini account. With leverage of 200 to 1, you can lose a lot more money than you might think.
Forex scams include churning customer accounts in an effort to generate more commissions, selling software that is supposed to result in big profits but never does, and even foreign currency Ponzi schemes. Any retail Forex broker that leads you, the investor, to believe that trading currencies is a low-risk, high profit endeavor is lying and should be avoided.