Mini Forex Trading: For Beginners In Forex

Mini forex trading is perfect for newbies in forex and with those who have a little amount of capital available at present. What the mini-account does is that it allows them to trade with real money, as it also limits their risk in trading. With a mini-account, the lot size of trades is only one-tenth of the actual lot size for a standard account, and with the same broker too.

Now, newbies to forex has three options:

(1) they can start out immediately with live trading in a standard broker account, wherein they can invest ranging from $1,000 to $5,000 (gives a great deal of risk for a novice and therefore not recommended);

(2) they can start with live/actual trading in a mini-account (In general, they'll need around $250 for this, but there are always brokers who'll let them start with a lower cost); and

(3) begin with a demo account as they pick up their trading skills without investing any real kind of money, then as they go on and continue in making good profits, they have the option to switch between a mini-account or a full brokerage account (depending on the capital that they have and their strategies, of course).

As for the advantages of the mini-account, most users will choose the third option, which is the demo account. Why? It's because it's really much safer to use toy money rather than real ones online for days, weeks or even months! With a demo account, they will be given an opportunity to try out different kinds of strategies in trading. But, on the other hand, running a demo account for too long can impose a false sense of security to the user, as they may be practicing with the strategies that may not be really effective when it comes to the trading in real life.

So what this kind of account does is that it teaches the trader to make profits out of medium to high risk strategies, but when the time comes that they get to face a real money situation, possibility is that they may lose their confidence, which results to poor decision-making and strategy-hopping, wherein they continually go from one plan to another. Loss of profits can't be avoided in this scenario.