How to account the Forex

For trading success, good money management is the key. Many traders ignore this aspect of trading at their own peril and get their account blown in a few weeks of trading. Trading discipline means using a trading system based on money management rules that limit your risk and avoid making trading decisions based on emotions.

You need to have sufficient capital in your account if you want to make meaningful profits. One of the worst blunders that currency traders can make is to trade without sufficient capital. Low capital increases your chances of getting blown out too soon. This does not mean that you should have a lot of money before you start trading. It only means that you need to have enough capital in your account in order take advantage of the movements in the currency markets.

A trader with limited capital is always a worried traders always looking to minimize losses beyond the point of realistic trading. The minimum amount required to open a standard account with most forex brokers is $2000. You can start with $2000 but it is recommended by most of the professional traders that you should start with $5000-$10,000 to get good results.

Forex Standard Account
A standard account or a regular account (often also called 100k account), let's you trade a $100,000 standard lot with a $1000 deposit. This $1000 is kept as the margin by the broker. This is a 1% margin. Your account should have more than $1000 if you want to trade a $100k lot.

When you open an account with a forex broker, you must first determine what the default margin requirement is. You can change the account margin requirement to whatever you feel comfortable with. If you start with a 2% margin, it will cost you $2000 to trade one standard lot of $100,000.

Many brokers try to offer huge leverage to the new trades in order to entice them. You can get a leverage of 200% in most of the standard accounts. Using 200% leverage means trading $200,000 with a $1000 deposit. With this small deposit you are controlling a huge amount. Be careful! Dont use more than 4% leverage while trading in the beginning. Too much leverage is dangerous. With practice and more experience, you can increase the level of leverage in your trading. Its not that leverage is bad. Its just that you need to understand and learn how to use it. You can only do so with practice.

Forex Mini Accounts
Mini accounts are great for beginners. You can open a mini account with most of the brokers with a deposit of only $300. The mini account was developed to accommodate investors who were looking for bringing more diversification to their stocks portfolios. This small dollar requirement allows many small investors to participate in the forex markets. Many were previously unable to do so. Some brokers offer micro accounts as well. On a mini account, you have different lot sizes as compared to the standard account. One lot on a mini account means $10,000. You only need $50 to control a mini lot of $10,000. A pip size on the mini account is equal to $1 instead of $10 as on a standard lot.

If you lose 100 pips on a mini account, it means losing only $100. Losing 100 pips equal $1000 on a standard lot. A mini account reduces your risk by 10%. But it also reduces the profit that you can make by 10%. Start with at least $500 on a mini account. A mini account is a great way for new traders to practice forex trading. First develop the feel of how the forex markets work. Once you become an expert, trade on a standard account. Standard lot gives you the opportunity to make good ROI.

Forex Managed Account
A managed Forex trading account is fun and profitable. The idea is that you can watch the money grow that you deposit. This is good for people who want to hold a full time job, or don't want to sit in front of the computer. The one option that you can do if you want your money to work when you don't have to is the Managed Forex account. The principle is simple for a manage Forex account. You simply deposit your money and the account does the trades for you.

You will have a professional full time trader who is experienced in trading manage your money for you. This is true "Autopilot" The broker will decide what to buy and when to buy it. Alternatively, he will know what to sell and when to sell it. There are people who are turned onto this idea and like the ease of use. The money is still yours to control and through a simple interface on the website, or a phone call, and you can use all the money you have the way you want. People believe that they are better than the automated bots, since they can have a cognitive idea and see

If you want to get into a managed Forex account, just sign one up. You simply need to make sure it's one that right for you. If you put in the minimum deposit and try it out, you can see how it will work. Read the fine print and take into account the broker's fees. Some places will ask for a minimum deposit. That can range from $1,000 and higher. This is one of the other drawbacks to using managed Forex accounts. Be sure you are willing to commit when you sign up, and your using money you don't mind loosing. Forex is a liquid market and anything can and usually does happen.