Mini Forex Trading

Mini forex trading is a way for people without a lot of money to trade the forex. It's also ideal for fthose brand new to forex trading. Mini forex trading allows those new to forex trading to get a feel for it wihtout risking the amount of capital you would normally use when trading the forex.

When you start Forex trading you can begin with a paper trading account with which you can understand how the market moves and you can develop more skills and knowledge about this trading account. Once you are successful with the paper trading account then you can move in for the mini Forex trading account.

Then, as your trading improves and you build your portfolio, you can graduate from mini forex trading to larger, more typical forex trading contracts with confidence that you have a profitable trading system in place.

You can open a mini forex trading account with a lot less money, usually around $300 instead of the thousands required for a typical forex account. The high leverage available to forex traders still applies but you are obviously risking a lot less money in a mini forex account.

With a mini Forex trading account you can learn risk management, which will help you in future while dealing full-size trading account. You can trade by using one mini lot and can then build up on the lot size later.

You may be concerned that the mini account requires a fairly large degree of leverage, 200 to 1. (In contrast, when day trading on stocks the leverage ratio is only 4 to 1 within a single trading day.) For obvious reasons, it is usually not an ideal proposition to take on a large amount of leverage in your investments. But this is the standard practice in mini Forex trading and is not considered over-leveraging. Also, the investor's risk on a mini account is actually offset by the lower possible losses one can face in mini trading.

With mini Forex trading, you can invest just $250, but trade 10,000 worth of a currency because of the high leverage. In a mini account, the margin deposit requirement per $10,000 lot traded is only $50. This leads to a leverage of 200 to 1 (10,000/50 = 200). Therefore, with your $250, you can trade a maximum of 5 mini lots, with $500 a maximum of 10, with $1000 a maximum of 20, etc.

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