Detailed Forex Trading Tips - Forex Forecast Section

Welcome to Detailed Forex Trading Tips

Article

What’s the Difference of Trading Mini Lots Vs. Full-sized Lots in Forex.
Adrian Pablo

In Forex trading there is something called, a Mini Account, and it uses a different leverage calculation than a regular (100k) account. This is, instead of trading full-size currency lots (100,000 units), you'll trade in lots that are just 1/10 the size (10,000 currency units), which in turn greatly reduces your risk. Pips in a Mini Account are worth, on average, $1 instead of the $8 to $10 value they have in a regular account. The Mini Forex account offers up to 200:1 leverage, this means that just a $50 margin deposit will allow you to trade lots worth roughly $10,000 , but the smaller lot sizes, with correspondingly smaller pip values, means that you'll be assuming less total risk. For example, while a 20-pip loss on a 100,000 USD/JPY position would be $200, the same loss on a 10,000 USD/JPY position in a Mini account would amount to $20.

Here you have an overview of leverage (Margin, Account Size) on each of the two accounts discussed above:

100K (Regular Full-sized Account)
- Minimum required account deposit = $2,000
- Recommended required account deposit = $5,000 to $10,000
- Traded in 100,000-unit currency lots
- Default Margin: set at 1% ($1,000 per lot)
- Leverage = 100:1 or 50:1 (if margin is set at 2%)

Mini Account
- Minimum required account deposit = $300
- Recommended required account deposit = $2,000
- Traded in 10,000-unit currency lots
- Default Margin: set at 0.5% ($50 per mini-lot)
- Leverage = 200:1

There is no downside to trading a mini account , you will be still enjoying all the benefits that full-size FX account holders enjoy; including, same state-of-the art trading software, charts, resources, and tools, etc. This mini accounts are ideal for a new Forex trader to develop a disciplined, rational forex trading strategy without excessively focusing on profits and losses.

Also there is no maximum trade volume when you use a mini account. Although the standard trade size is 10,000 units, you are not limited to trading one lot. For instance, you can trade 10,000 units, 50,000 units or 200,000 units. This means as you become more seasoned and build up confidence you can slowly increase the size of your positions to maximize profits. In fact the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade. The ability to customize the size of the trade allows you to have a better risk management.
With less capital at risk in a Mini FX account, it is easier for you to develop a disciplined trading methodology, as well as the confidence needed to be a successful currency trader, without the anxiety and distractions that come with large Profit and Lose swings.

About the author:
Adrian Pablo; Forex trader and freelance writer.

You can download a free Fibonacci trading report at his website:

http://www.1-forex.com

Forex Forecast News

forex forecast

By Leika Kihara TOKYO, Nov 21 (Reuters) - The Bank of Japan held back from a rate cut on Friday and tweaked its market operations to ease funding pressures towards the end of the year, as it assesses the growing economic fall-out from the financial ...

UPDATE 3-BOJ holds rates, eyes market operations - CNBC

Nov 20 - Risk Aversion Leads To Breakouts In Yen Crosses (Forex Video) Nov 20 - Forex Trading Signals Update: Volatility Has Dropped, Look to Range Trading Strategies Nov 20 - Australia Intervenes in Forex Market, Spends Record 3 Billion to Boost ...

Risk Aversion Leads To Breakouts In Yen Crosses (Forex Video) - DailyFx

Nov 21 - Euro Could Rebound Against US Dollar as Light Calendar Boosts Risk Appetite (Euro Open) Nov 21 - Identifying Trades with DailyFX 11.21.08 Nov 20 - Risk Aversion Leads To Breakouts In Yen Crosses (Forex Video) Nov 20 - Forex Trading Signals ...

Euro Could Rebound Against US Dollar as Light Calendar Boosts Risk ... - DailyFx

SINGAPORE, Nov 21 (Reuters) - Singapore's economy shrank at a worse-than-expected rate of 6.8 percent on an annualised and seasonally adjusted basis in the third quarter, final government data showed on Friday, confirming the export-dependent country ...

INSTANT VIEW 3-Singapore in recession, cuts growth forecast - FXStreet.com

LONDON (Dow Jones)--The number of U.K. home repossessions rose again in the third quarter and the economic slowdown suggest many more people will fall behind on their mortgage payments in the months ahead, the Council of Mortgage Lenders said Friday ...

UPDATE:CML: UK Repossessions Rise; Mortgage Arrears To Worsen - FXStreet.com

The euro moved higher vis-à-vis the U.S. dollar today (Thursday) as the single currency tested offers around the US$ 1.2585 level and was supported around the $1.2470 level. The common currency gained ground on a variety of factors. First, weekly U ...

Forex Interplay: Dancing Around the Dollar - Seekingalpha.com

The ADSs are down 27% this morning after STP posts third quarter earnings per ADS of $0.33, vs. $0.32, $0.11 below our estimate, and gives fourth quarter sales and gross profit guidance well below our forecast. We saw tight credit and adverse forex ...

S&P Picks and Pans: Citigroup, General Motors, Suntech Power, Men's ... - BusinessWeek

This diary is a summary of key events likely to affect trading in the Forex and debt markets. All times GMT. ----- Top FX News: Top Fixed Income News: Top Macroeconomic News: European equities ...

DIARY - Day ahead in the FX and debt markets - CNBC

DAY LOCAL/GMT INDICATOR/EVENT PERIOD FORECAST PREVIOUS -----Calendar for November 17 week----- Thu 1800/1230 Inflation Nov 8 N/F 8.98 pct Fri 1700/1130 Forex reserves Nov 14 N/F $251.36 bln Fri 1700/1130 M3 money supply Nov 7 N ...

Indian Data Watch-Inflation data on Nov 20 - Reuters India

U.S. stock futures rose on Friday amid reports Citigroup may put itself on the block and following upbeat results out of Dell and Salesforce.com . More than three hours before the start of trading, Dow Jones Industrial Average futures were 270 points ...