Candlestick Trading Blog
July 14, 2009
Trade Account
| When opening a trade account in order to trade forex, there are many different types of accounts that you can choose from. Forex trading is popular due to the fact that it is the forex market is most liquid and you can trade 24 hours a day. In today's article we discuss the different types of trading accounts that the forex trader can choose from. There are demo accounts, mini accounts, full accounts, and managed accounts that the typical forex trader will trade from. We discuss each trade account below. Demo accounts are offered by forex brokers so that potential traders can try out their software first, before committing to an account. Traders can see what the forex trading software has to offer including execution methods as well as other helpful tools. Once the trader has used the demo account, he or she would then set up a funded trading account in order to begin trading. Mini accounts are very similar to normal trading accounts but the currency is traded in lots of 10,000 rather than 100,000. This allows for lower mandatory initial deposits, hence the term "mini" accounts. It also allows for greater customization of investment risk management. Many beginner traders will open this type of trade account first when they enter the foreign exchange market. Forex investors can take smaller positions with this type of account than if they traded with the standard 100,000 lots. Managed accounts deal with forex managed trading which involves the use of a money manager to trade a forex account on behalf of an investor for a fee. Managed accounts are just like normal trading accounts that require the use of an investment advisor in order to manage the more traditional investments such as stocks and bonds, and equities. Forex traders must be sure that they take the time to research firms in order to find one that has reasonable fees as well as knowledgeable staff. These types of funds work contrary to mutual funds. Mutual funds are managed by a professional on behalf of many mutual funds holders, whereas managed accounts are more customized to the individual and their investment portfolio. There is a lot of research to be done when choosing a trade account. Not only do you need to decide which type of account you want to open, but you must also research the different brokerage firms in order to find one that works for you. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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