Forex Mini Lot Size
What is the difference of Trading Mini Lots VS. Lots of full size in Forex
In Forex trading is something called a Mini Account, and uses a different leverage calculation of a regular (100k) account. That is, instead of a lot of forex trading full-size (100,000 units), will trade in lots that are only one tenth the size (10,000 currency units), which in turn reduces your risk. Pips in a Mini Account are worth, on average, $ 1 instead of $ 8 to $ 10 with a regular account. Mini Forex Account offers up to 200:1 leverage, this means that only a $ 50 deposit will allow to trade lots worth about $ 10,000, but it means much smaller size, with values correspondingly smaller pip, which you will be taking a lower overall risk. For example, while a 20-pip loss on a 100,000 USD / JPY position would be $ 200, the same loss on a $ 10,000 / JPY position in a Mini account would be $ 20.
Here's a summary of leverage (margin, size of account) in each of the two accounts discussed above:
100K (Regular Full-size account)
– Minimum required account deposit = $ 2,000
– Recommended required an escrow account = $ 5,000 to $ 10,000
– Operated in lots of 100,000 units of currency
– Default Margin: set at 1% ($ 1,000 per lot)
– Leverage = 100:1 or 50:1 (and when the margin is set at 2%)
Mini Account
– Minimum required account deposit = $ 300
– Recommended required account deposit = $ 2,000
– Operated in lots of 10,000 units of currency
– Default Margin: set at 0.5% ($ 50 per mini-lot)
– Leverage = 200:1
There is no downside to trading a mini account, you continue to enjoy all the benefits owners enjoy full-size FX account, as they are, the same state of the art trading software, charts, resources and tools, etc. This mini accounts are ideal for a new Forex trader to develop a strategy disciplined, rational forex trading without too focused on profits and losses.
There is also no maximum trade volume when you use a mini account. Although the standard trade size is 10,000 units is not limited to trading one lot. For example, you can trade 10,000 units, 50,000 units 200,000 units. This means that as you become more experienced and build the confidence they can gradually increase the size of their positions to maximize profits. In fact, the trading volume of 10,000 units allows for greater flexibility in customizing the size of your trade. The ability to customize the size trade allows you to have better risk management.
With less capital at risk in a Mini FX account, it is easier for you to develop a disciplined trading methodology, and the confidence to be a successful currency trader, without the anxiety and distractions that come with great benefits and changes to lose.
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