Forex Brokers with Micro Accounts
Richard Montana | November 3, 2022
If you are new to trading forex online, then you might want to consider opening a micro forex account, also known as a cent account. This type of forex account gives you access to buy and sell currency pairs without needing the risk exposure and minimum deposit requirements that can come with a standard forex trading account. It is the next step up from a demo account but a step below the standard account.
What is a forex micro account?
A forex micro account allows beginners and retail traders to engage in foreign exchange trading using smaller trading sizes. A micro account’s smallest contract, also called a micro lot, is a preset amount of 1,000 units of currency, or 1% the size of a standard lot.
A standard lot refers to 100,000 units of base currency and equates to $10 per pip movement. A mini lot is 10,000 units of base currency and equates to $1 per pip movement. A micro lot is 1,000 units of base currency and equates to $0.10 per pip movement.
A micro account can have different minimum deposit requirements as small as $1, depending on the broker. This makes them a popular choice for newcomers who just want to dip their toes into the forex market without making a substantial investment.
What is a micro lot?
Micro lots are the smallest tradeable lot available to most brokers. They are lots of 1,000 units of your account funding currency. If your account is funded in U.S. dollars, this means that a micro lot is $1,000 worth of the base currency you want to trade.
Forex micro account vs mini account
Both mini and micro accounts are considered viable alternatives for beginner traders who are yet to learn all the ins and outs of the currency markets. A micro account and a mini account differ in terms of contract size. Micro accounts are limited to 1,000 units of currency, while mini accounts are limited to 10,000 lot trades. You could say that a mini account is the next step up from a micro account.
Forex micro account vs standard account
The main distinctive feature of micro (cent) accounts are that they use 100x denominated monetary units of the base currency while the trading conditions are equal to those for standard accounts. These means that you can trade larger positions sizes on a standard account which not only increases profit potential, but also increases your risk.
Advantages of a forex micro account
- Trade with small lot sizes
- Start trading with just $1
- Less risk involved
- Practice your trading strategies
- Improve your trading skills
- Build your trading discipline
Disadvantages of a forex micro account
- Not all brokers provide them
- Limited profit potential
- Not the tightest spreads
- Non-priority liquidity
Which forex micro account broker is the best?
This really depends on what you are looking for in a forex broker. There are so many forex brokers that provide micro accounts so there are a few things you can consider in order to narrow down your search. This includes the financial markets that you want access to other than forex, including stocks, commodities, indices and cryptos. Then you need to think about spreads, fees, leverage, platforms, tools, education, funding, support, regulation. You can see a selection of our best forex brokers with micro accounts below.
Conclusion: should I open a forex micro account?
If you have never traded forex before, then I would personally begin on a risk-free demo account. This can be a great way for you to get a feel for how everything works without the added pressure of using real funds. Demo accounts are free and allow you to practice various forex strategies so that you can improve your trading skills and build confidence.
If you start seeing some success, you may then want to think about making the step up to a micro account, mini account and eventually a standard account. Just take your time and learn as much as you can in order to become the best trader that you can be.
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