Forex Beginner's Guide: What Type of Trading Account Should I Choose to Start?
Posted on 17. Jul, 2009 by admin in Forex Education
I remember that at the end of 1998, when forex market is already opened to public, i still know nothing about it. Nowadays, it seems forex has turn its form from an investment into some kind of virus which spreading to this whole earth faster than any virus i’ve ever seen. Everyone know what forex is and wanna be part of it. what a BOOM! Forex fever is undoubtfully tasty and tempting. No wonder no one can’t resist it…
Todays online forex trading give us another chance to life an easier and better living, but it also could give us a horrible headache either. Every beginners should note that it is important to understand every single aspects in the forex market before starting to get invoelve into forex trading. The fact is; there are always new comers which soon became a new cryers after several days of trading. They who failed are usually has the same simple cause, GREED which lead to RUSH and ended with LOSSES.
There are many factors to consider before people decide to be a traders. In this article, i wanna talk about one of the basic of forex trading, account type selection.
Basically, there are three type of account in forex trading:
1. Demonstration Account
An online brokers is usually offering this type of account to a new traders who wanna ‘taste’ how good is the broker’s trading platform. Most of demonstration account are filled with some amount of virtual funds (i.e $10K – $100K) which can freely used by traders to virtually trading against real forex market.
2. Mini Size Account
Some online brokers offering this type of account, which allowing traders to trading in forex market by using less funds which actually needed. Brokers just ask for some minimum margin requirement (i.e Marketiva $1[?], Easy-Forex $25, Forex.com $250,etc), than give traders a high leverage to trade against the real market.
3. Standard Size Account
Basically this type of account is similar with the mini account, but its need a higher margin requirement in exchange with a lower leverage; ie Forex.com $2500, GCI Trading $2000, etc.
Almost of all beginner’s traders are starting their trading journey by ‘practicing’ to ‘beat’ the forex market by using a demonstration account type. It’s a good step, a great way for traders by adapting them self with the real forex market. Unfortunately, its also a great way to introduce traders with ‘the most enemy of all traders’, GREED!
Forex real trading are far more complicated than its demo’s version. Traders aren’t taste the psychological factors while trading with the demonstration account. There are no REAL money to loose when his/her trading day are ruins. But he/she feels the HAPPY thought when winning. There are nothing to loose but all winning only. And once unfortunately again, this condition lead most traders to overconfidence with their future in the real trading. Traders whose emotionally immature as they are, his/her 95% probability of futures is to become a cryers whatever type of account he/she take in the real trading.
Smart traders are they who has a purpose. They know that demonstration/practice account is just an instrument of forex trading basic learning, and the main usage of its is to find out and develop the best trading strategy that suits to them.
How to Select a Trading Account
Once you’ve develop your trading strategy, you might wanna to start to applied for the real forex trading. But before choosing your account, firstly, ask yourself, ‘what’s my purpose in doing this forex trading?’. The answers could be variety; is it for a fun? is it for a better living (primary income)? is it just for following other (maybe)? secondly, ask yourself again, ‘how much money do you can afford to loose?’ The answers to this question also could be variety either; is it all off your money? is it all of your disposable incomes? is it some of your disposable incomes? or maybe none?
When you’ve find your answers; there are 3 possibility options that you’ll gonna pick then:
1. Take the mini account
If your trading is just for fun or something like that, i suggest you to take this kind of account type. Why? Because forex trading is actually size counts. Picking the mini ones means that you’re risking less of your money. The fact that mini account are a little riskier concerning with its higher leverage, it still okay to consider because you’re not about to taking this forex seriously. But my opinions is an exceptions for those who are having too much money too spend…
2. Take the standard account
If you’re planning to make a living by forex trading, you should take the standard size. I’ve mentioned before that size does count in this business. The best way to achieve your goal is by adding more funds to your account. If you’re thinking that adding more risk (by using higher leverage) is fine, you should be ready to loose your everything as well. Which one do you able to afford?
3. Leave the game
With a consequences that you’ll gonna be sorry for seeing other traders are flying above with their dream…
Whats your choice then? Its all up to you… whatever is your choice, personally i’ll just wanna wish the best luck for you 
Happy trading,
