Today more and more people are looking to invest money in the Foreign Exchange market. If you are at all interested in deciding to invest money in this market there are certain things that you need to be consider before you do.
One of the most important factors that needs to be taken into consideration is the setting up of an account. Without such you won’t be able to buy or sell on the Foreign exchange market. Today you will find that there are many different types of accounts available and of course determining which one to use can prove extremely challenging.
In order to help you determine which account would be suitable we take a closer look at the kinds that are currently available.
1. Standard Trading Account
This is the most common form of account people who choose to invest in the Foreign Exchange market use. There are certain advantages to be gained from using such accounts as these.
The first being that most brokers who provide accounts like these provide additional services that can help you gain better understanding of how this market works. Another advantage is that you could see a much bigger return on any trades you carry out, however there is also a greater risk of you losing more.
Plus the other problem with this form of account is that the initial deposit required for setting up such can be quite high. Although some may allow an initial deposit of say $2,000, most brokers who provide this type of Foreign Exchange trading account require you to deposit at least $5,000 with them.
2. Mini Trading Account
With this form of account you are able to make trades using much smaller lots. If you are only just getting involved with the Forex market then you may find setting up one of these accounts can prove very beneficial indeed.
The first benefit of course to setting up an account like this is that you don’t need to invest huge sums of money initially. Most of these accounts can now be set up just by depositing $250 to $500 into it. Also as the lots you are trading in are much smaller then the risk of you losing money is much less.
But having said that because you are investing a lot less using such an account, then of course the return you get on your initial investment is a lot less.
3. Managed Trading Account
Although it is your money that has been invested it isn’t you who will have the final decision when it comes to what trades occur. These kinds of accounts are handled in much the same way as the accounts people invest in relating to stocks and shares.
The main advantage of course to setting up such a Foreign Exchange account is that you don’t need to spend all your time watching how the market is doing. Instead your broker will be doing this for you. But of course in order to set up such account requires a much larger investment. The minimum amount you would be required to invest in such account is $10,000.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS