Mini Forex Trading

Mini forex trading is a great tool for retail investors with limited funds to trade the foreign exchange market without opening a full fledged forex account. A forex mini account requires a significantly smaller capital, sometimes as little as $250 (depending on your chosen platform), compared to a regular forex account which typically requires $2,500 or more.

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A beginning forex trader is encouraged to open a forex mini account even if he has sufficient capital to open a normal account. Why? Because mini forex trading is a great way for a forex beginner to learn the trade as it allows for lesser losses. Since each contract size in a forex mini account is worth only 1/10th the size of a standard lot, 1 pip worth $10 on a standard account will thus be worth $1 on a forex mini account. A 20 pip stop loss that will normally cost you $200 on a regular account will thus only cost you $20 on a forex mini account.

Forex mini accounts also provide better leverage than a regular account. While you need $1,000 to control one lot of $100,000 on a regular account, you get a leverage of 200:1 on a forex mini account. This means that to control one lot of $10,000 on a forex mini account will only set you back $50.

A forex mini account with a reputable forex broker should give you all the benefits of a normal account, such as charting software, point and click trading platform and other trading resources. Because traders are not limited in trading volumes, mini forex trading is a great way to rack up multiple trades quickly and easily, testing their trading strategy on a live platform and subject to real emotions of forex trading. Even with prior success with virtual or paper trading, nothing prepares you for live trading until you actually do it with real money.

To be realistic, you shouldn’t expect to earn a fortune with a forex mini account due to the small contract size. However, it is a good way to build up your confidence and to provide validation of your trading strategy as what is more important at this stage is your percentage gains rather than the dollar value of your profits. It is also a great way to cultivate discipline, by far the most important behavior for every successful trader. Once you see your forex mini account gradually increasing, then you know you’re ready for the higher stakes of big-time trading.

Mini forex trading is also a great way to diversify your investment portfolio. For example, if you have a $20,000 investment kitty, you might not want to put all your eggs in one basket in forex. Instead you might want to have a $5,000 forex mini account, $10,000 in stocks, and $5,000 in bonds.

Forex trading is a high risk high rewards activity. But if you’re a beginning forex trader, it’s wise to practice caution and plan your path carefully. Make mini forex trading the next step after paper trading in your journey to be a forex star trader.

If you are considering signing up for a forex trading course, why not learn from the best? Kishore M once had returns of 233.13% certified by auditors and has been interviewed by agencies such as Bloomberg, BBC and Channel NewsAsia. He has taught all over the world including London, Hong Kong, the Middle East and Singapore, and his students include participants from CIMB Securities, Citibank and Deutsche Bank. Click here to find out more about Kishore M's Instant FX Profits now!