So what are the different types of forex trading account? First let’s take the standard account, which has the highest minimum investment. Most brokers ask for at least $10,000 and with some you need $50,000 to open an account. The standard lot size is 100,000 currency units. So with leverage of 100 times you would be putting up 1,000 currency units per lot.

It’s a lot of money (excuse the pun) and it comes as a relief to most traders to know that they can have a mini account with one tenth the position size, ie requiring 100 currency units to control a lot size of 10,000 units. The forex micro account is one tenth of the size of the mini, with a lot size of 1,000 units that you could control with just 10 currency units assuming 100 times leverage.

So why is the standard lot size so big? Years ago, before the rise of the internet, forex trading was done through dealing desks. Most trading was in the hands of the large financial institutions such as banks. It was possible for private individuals to get involved, but they had to phone a broker to give their instructions. The time cost of this meant that brokers would only consider taking on clients with a substantial amount to invest.

However, when brokers began transferring their services onto the internet, the costs were slashed almost at once. It was no longer necessary to have a staff of dealers answering a bank of telephones. Traders could control their own accounts from their own homes or offices, by logging on to the brokers’ website.

This means that it is now cost effective for brokers to offer much lower lot sizes and therefore much less of a minimum investment. Brokers leapt at this opportunity to attract a huge number of new clients, and the forex mini account was born, soon to be followed by the micro.

The minimum investment varies with the broker. Scaling down from the standard lot size you might expect the minimum for a mini forex account to be $1,000 to $5,000. In fact, many brokers will let you start with less, but it is better to have that kind of sum if you plan to trade mini lots. If you have less than $1,000 to invest in your trading, it would probably be better to start with a micro account.

There is something else to consider too. Taking the example that we gave earlier with 100 times leverage and assuming that the currency unit in question is the US dollar, if you open a forex mini account you will be dealing in lots of $10,000, requiring you to put up $100 for each trade. To many people that can seem like a lot of money. Remember, forex trading is very risky and your trades will not always be profitable. Some losses are inevitable. Are you comfortable with committing $100 to every trade?

If not, then a micro account might suit you better, at least at first, even if you have more than the minimum required to open a forex mini account.

Forex Mini Account or Forex Micro Account: Which Is Best For You? is a post from: Great Forex World

Foreign exchange trading seems very complicated when you first start out. The average person has no idea what is meant by terms like pips and spread. Charts and indicators are a complete mystery. We have all been in this position even if it was many years ago, so there is no need to feel ashamed or overwhelmed. Tackle the different aspects of forex trading one by one, sign up for a demo account so that you can try out the skills that you are learning, and you will find that it is much easier to understand these things when you are involved in practice trading than if you are just reading about them.

Beginners starting out usually have one of two attitudes to trends and price movements. Either the fluctuations seem completely random and they think it is impossible to predict anything, or they assume that they can just look at a candlestick chart and instantly know what will happen next. A little training and practice will soon show them that the way lies somewhere in the middle.

Forex predictions rely on two aspects. One is the national and global economic situation. This is clearly something that is going to affect currency values. You can easily see that if a country is doing well, people will want to invest in it, and the price of its currency will rise just as the price of a company’s stock rises when the company is successful. And of course the opposite is true too. So anything that affects the economic outlook for the countries whose currencies you are trading is going to have an effect on the prices that you get or pay.

Second, there is what is called technical analysis which relates to the charts and indicators that you see in your demo account software. There are many ways to use these to analyze the market. You can often identify when long term trends are forming which may cause the value of a currency pair to rise or fall more or less steadily over a period of weeks or months. If you can get in on a major trend in the early stages you can make a lot of money, but you must be patient.

There will also be small fluctuations within each day or hour when prices seem to bounce within certain boundaries. If you can identify patterns in these fluctuations you can place orders and make money from what is called forex day trading.

Movements in the currency market are difficult to foresee and you will need a well designed system and a trading plan that takes account of the funds that you have available and the amount of risk that you are prepared to take. There is no way of trading currency that is risk free, so you must be prepared for possible losses. Learning to make forex predictions will help you to establish a profitable trading history but nobody can be 100% accurate.

Forex Predictions : What Causes Currency Price Movements? is a post from: Great Forex World