What are Mini Forex Accounts?

Up until just a few years ago, people who wanted to participate in the Forex markets needed to do so through their bank. They were often institutional or wealthy traders with hundreds of thousands of dollars to commit to the cause.

Thankfully - all of that has now changed. With the development of the retail Forex market (the market which you and I are able to trade through) all of the capital restrictions such as having $100,000 on hand are no longer valid.

These days, we have both standard accounts and mini accounts available to us - both allowing for trading in the Forex markets at different levels. Here in this article, we will be focusing on mini accounts to see how they might be of benefit to us.

Mini Accounts for Small Capital Investments

The first thing we will talk about when it comes to mini FX accounts is their difference between standard FX accounts.

In general, a standard Forex account has a minimum trade value of $100,000 (leveraged) - which means that your account balance needs to be at least $1,000 to be able to place a trade. For many people - this is still quite a bit of cash to have committed to Forex, especially if they are new or beginner traders.

Hence, the Mini Forex Account solves this problem. The minimum trade value of a mini account is usually $10,000 (leveraged) which means a minimum account size of $100 is required to place a trade.

As you can see, this is much more manageable.

Micro Lots & No Minimum Lot Sizes

Since mini lots came in to fashion with investors, some brokers have taken things a full step further and introduced micro lots and even trading platforms with no minimum lot size.

Typically, a micro lot is $1,000 in value (leveraged) which implies that the minimum account size is $10. Additionally, for no lot size, you can trade as far down to $1 of currency per trade, without having any restrictions.

Ultimately, the lot size that you decide on will depend a lot on your preferences as a trader - and your appetite for risk. The larger the lot size, the larger the profit or loss will be - so it pays to think this factor through in advance to prevent nasty phenomenon such as margin calls from occurring.