Mini forex trading
There are times when trading demo money failed to create the same sentiments as trading your hard earned money. You may trade $200,000 without blinking an eye in a demo account but when real money is at stake, your mind is going to make you react in a different way than in paper trading.
Ready to ditch your demo account for live trading but not sure if you can tolerate the risks? Get a mini forex account! The amount of money needed to open a regular forex account is already small, but a mini account minimum amount is even smaller. With a minimum investment of $200, a mini forex account is perfect for newbie and those with little capital. A regular forex account will require 10 times more money. This may just be the bridge you need to learn about funds management and get a taste of live trading without getting your fingers burned.
For a small stake, you still get the enjoy the full range of facilities and resources used by full forex traders such as advanced software, free trading platform, charts and the likes. The worst scenario is that you lose all your $200, if no margin was used. This has a direct impact on investors' psychology and pressure when trading.
Needless to say, a mini forex account is a great channel to hone your skills and build your confidence. With a mini forex trading account, you can trade up to 5 mini lot with each lot equivalent to 1/10th the size of a normal forex account. By default, the standard contract size in forex platform trading is 100,000 units. According to Paolo Freguglia, "for mini lot you need to adjust it to 0.1 lot in order to place 10,000 units."
This is also to say that the profit and loss will be a fraction of that of a usual account. Once you are ready to earn full profit from your trade, (not to mention handle a full-blown loss), it is time to move on to a regular forex trading account. Even when a loss is suffered, a mini forex trading account holder get over his loss relatively easy and learn not to make the same trading mistake again.
Like any expert will tell you, controlling one's emotion when trading is the most important underlying aspect, surpassing those of analysis and skills. Once the mind is conditioned to resist financial influence, it can then decode the market and decide the course of action objectively. Therefore, a mini forex trading account is useful for investors to test the water without getting their feet wet.