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Mini Forex - A Safer Way To Trade

By : Margaret Tye
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If you are planning to open a mini Forex account and not a standard one, it will mean that you can trade smaller amounts. The value of a pip in such small trades will be approximately 1 dollar, greatly reducing the risk of facing large losses. For instance if on a standard trade of 100000 dollars the pip loss is 10, it will result in a loss of 100 dollars. At the same time in a mini Forex trading lot of 10000 dollars, a 10-pip loss would mean 10 dollars.

There are a lot of Forex brokers on the Internet who permit you to open a mini Forex account for a small amount of 250 dollars. Knowing that any loss you may suffer is not likely to be very great, allows you to concentrate on adhering to an effective trading strategy, instead of just keeping a watch on your balance and getting tense regarding margin calls. A margin call is when your broker realises that your account does not have sufficient funds to cover your trading and, to protect himself and you, he may liquidate your trade.

If you are a novice in Forex trading the best method of protecting yourself from a margin call would be to trade one pair at a time, at the same time using only a minimum percentage of the capital from your mini Forex account. But the most important thing is to set up a stop-loss order so that you are protected in case the currency market moves against you.

One more advantage that is associated with the Forex Mini account is that you will have all the possible benefits of a whole standard account; charts, trading platforms and so on. If you are a beginner then having a Forex mini account can be considered as a wise option.

There are a lot of people who rush in with a thought that Forex currency trading is an easy method of making a lot of money. These people probably end up under the category of those 95% beginners who lose a lot of money. So if you are planning to trade, make sure that you protect your capital while you are learning the skills. Once you have developed your skills and made a profit, you can then invest the profit and trade in larger lots like 20,000 dollars instead of 10,000 dollars.

This article is for information only and the author accepts no liability for any actions taken. Forex currency trading is a high risk investment and you should not use money that you cannot afford to lose.



About the author:
Margaret Tye runs the Forex Trading Articles - Mini Forex Trading website


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