Forex mini accounts are fully operational forex trading accounts, just with smaller requirements for deposits and trading size. They are very suitable for new traders and beginners, who want to trade with real money, but do not want to risk a lot of money. Normal forex accounts with established brokers usually require significant deposits, $1000,$2000 or more in order to open an account. Naturally, this isn’t necessarily the best choice for beginners or traders with smaller budgets. This is where forex mini accounts come in handy.
A forex mini account only requires you to make a small deposit, usually in the range of $100 to $200. With this deposit, you get a forex account with all the features that you would find in a normal account.
Forex is traded in fixed amounts called ‘lots’. A lot is usually 100,000 units of the traded currency with a normal account. Even with gearing and leverage, this means that you can trade a lot of currency with a small budget. Forex mini accounts have smaller lots, all the way down to 10,000 units. This means that you can trade larger amount of forex for a smaller sum. Why is this beneficial? Consider that the forex market is very volatile. If the forex market moves in the wrong direction for your trade, then with a lot size of 100,000, you could very fast be looking at a significant loss. With a smaller lot size, your overall portfolio won’t be affected as much. This is important because there is a great deal of natural variation in the forex market and to effectively deal with the normal swings you need to have enough money in your account so that one bad trade doesn’t wipe out everything.
If you don’t even have $100 or just don’t want to risk, but still want to trade real time with real money, then you could consider a Forex Micro account. Not all brokers offer these though. A micro account if the smaller version of the mini account. With a micro account, you can begin trading for no more than $25, I have even seen brokers that offered $5! You’re not going to make any money with a micro account, but you will get some experience with the platform and market.
Demo accounts are good and all, but they don’t give you the real experience of actually trading on the market with your own money. Forex trading is a psychological game and there’s a lot of emotion going on. Greed, panic, fear, it’s all something you will have to learn how to deal with, if you want to be a successful forex trader. With a mini or micro account you can learn how to control your emotions and not risk your house, and the first winning trade will feel much better than winning on a demo account. It should be said however, that demo accounts are still good for absolute beginners, just to familiarize yourself with the platform. It’s not good to be looking frantically for a button when there’s a trade to be made. You should know how to trade in theory before depositing any money into a forex account.