Everyone usually talks about the requirement of selecting the proper broker, especially when it involves forex trading. this can be certainly true, as your choice of broker is important. However, the foremost important thing is to settle on the optimal account type that suits you. during this article, we glance at the most reason behind the aim of trading accounts, their common types and therefore the main elements to think about when choosing an account type.
Why is there a difference?
Usually, the broker prefers to style the trading accounts during a certain way, so the large traders with larger capital accounts have access to the most effective services. And consider it as if you were viewing the auto industry. you’ll be able to easily buy a chic car for an honest amount, but you’ll be able to also buy a greenhorn Honda NSX for an even bigger amount. Either way, you own and drive a Honda, but the second model is more likely to induce you to your destination faster.
What kinds of trading accounts are there?
The diversity of the trading account group is up to the trading broker. There are companies that believe the principle of “one size fits all”, and so these brokers offer their clients just one variety of account. There are brokers that have 5 or more varieties of trading accounts that they provide within their offering. Below we’ll list the foremost important forms of trading accounts that exist.
It was extremely popular within the past, but it’s now dwindling. the most idea behind cent accounts is that deposits are calculated in US cents instead of in US dollars. In other words, a cent account with a deposit level of $1000 means the person has deposited only $10.
There are two main objectives of those accounts – testing automated trading systems without incurring plenty of cash and a straightforward level up for beginners demo account.
The main feature of cent accounts is easy – the minimum deposit requirements are very low. Usually, these accounts don’t come loaded with any additional benefits.
Trading platform accounts
It is not always possible for a broker to integrate payment systems well so all the available trading platforms extract the balance from one ledger. this is often the explanation why the trading broker often has accounts for the trading platform within its products that it offers to clients.
The main advantage of those accounts is to supply the desired trading platform. it’s therefore quite normal to determine some brokers offering a selected account for the MetaTrader 5 platform. However, this can be not a separate product, but rather the simplest way of working.
Still, most brokers are more keen on giving clients the chance to trade on one specific platform, and for this reason, they provide extra bonuses, lower spreads or little commissions for this platform.
Conversely, a broker might want to face out with a specific platform and make it accessible to professionals only. this is often the case with most brokers setting a minimum deposit of around $10,000 for accounts that include some perks, usually software.
Like cent accounts, it became very talked-about, but it’s also fading out. Most often, intermediaries who are shareholders of market share in Russian and CIS countries offer VIP accounts. the most idea of this account was to supply various additional services. which has an account manager available 24/7 via a fervent connective, lowest possible spreads and commissions, personal analytics or maybe iPad and iPhone gifts.
Often the broker starts treating their clients as VIPs after deposits of $10,000-$50,000. However, most of the advantages from these accounts don’t seem to be of much use to professional traders.
Often the broker offers only the quality account in their offers. This account usually comes with a coffee minimum deposit requirement and doesn’t contain any add-ons. In simple words, these accounts are roughly the identical as a cent account except that deposits are only measured in dollars.
These accounts would usually include a median offer in terms of spreads and commission, instant execution in addition as a good range of trading tools.
These forms of accounts are commonly used among brokers also. the most idea behind Pro accounts is to supply somewhat superior trading conditions, totally on currency pairs. Usually, the broker provides market execution orders through systems (NDD, ECN) for professional accounts. Also, spreads tend to be lower and commissions lower compared to plain accounts. However, these accounts are less accessible. Where the minimum deposit is around $1000.
Once you have got chosen a broker, the thought of choosing the proper variety of trading account is unquestionably a decent idea. Ideally, we must always seek for accounts that come with none interaction from the dealing desk. Then, you opt what quantity money you’re willing to deposit, not all account types are going to be available to you. Finally, check the financial instruments you intend to exchange and also the terms of all available account types.