Forex Mini Lots vs Standard Lots- What Are the Differences?

By Ekzaga Staff

24 May 2018 9:14 am

Forex Mini Lots vs Standard Lots- What Are the Differences?

It can be complicated when finding the right type of forex trading account that coincides with your potential deposit size. Commonly, there are three types of Forex accounts; Standard, Mini and Micro. Please be assured that not all Forex brokers offer all three types accounts (see broker trading platform). When trading currencies on standard account you can buy and sell 100,000 units of currency as a minimum (this equates to one standard Lot). There may be a limit on how many Lots can be traded on each individual trade. A broker may put a cap based on existing funding of trading account and set margin requirements. 

 

A Forex Mini Account uses a different leverage calculation than a standard(100k) account. This is, instead of trading full-size currency lots (100,000 units), you'll trade in lots that are just 1/10 the size (10,000 currency units), which in turn greatly reduces your risk. Pips (percentage in points) on a Mini Account are worth, on average, $1 instead of the $8 to $10 value they have on a standard trading account. Typically, a Mini Forex account offers up to 200:1 leverage, this means that just a $50 margin deposit will allow you to trade lots worth roughly $10,000, but the smaller lot sizes, with correspondingly smaller pip values, means that you'll be assuming less total risk. For example, with a 20-pip loss on a 100,000 USD/JPY position would be $200 ($10 per lot x 20 pips), the same loss on a 10,000 USD/JPY position in a Mini account would amount to $20. 

 

Lot

Number Of Units

Standard

100,000

Mini

10,000

Micro

1,000

 

The below is a general overview (average comparison of online brokers) of leverage (Margin, Account Size) on each of the two accounts discussed above:

 

100K (Standard Full-sized Account)

- Minimum required account deposit on average = $2,000

- Recommended required account deposit = $5,000 to $10,000

- Traded in 100,000-unit currency lots (Standard Lot) 

- Default Margin: set at 1% (100:1) ($1,000 per lot) 

- Leverage = 100:1 or 50:1 (if margin is set at 2%) Hi

Note: Higher Leverage means the broker requires a lower margin deposit per trade therefore making it more favourable for trader (maximising potential profits) One of the best standard trading accounts we recommend is with XM broker. They provide two main types od Standard Accounts (Standard Account and ther other is XM Zero Account). Spread is lower on the Zero Account however commision is applicable on your trades. (* Leverage may differ dependng the country you live in, UK Max Leverage is 30:1 of Forex CFDs). Clck on link below to open a demo trading account.  

 

 

Mini Account

- Minimum required account deposit = $300

- Recommended required account deposit = $2,000

- Traded in 10,000-unit currency lots (Standard Mini Lot)

- Default Margin: set at 0.5% ($50 per mini-lot)

- Leverage = 200:1

Note: Higher Leverage means the broker requires a lower margin deposit per trade therefore making it more favourable for trader (maximising potential profits)

 

There is no downside to trading a mini account, you will be still enjoying all the benefits that full-size FX account holders enjoy; including, same state-of-the art trading software, charts, resources, and tools, etc. Mini accounts are ideal for a new Forex trader to develop a disciplined, rational forex trading strategy without excessively focusing on profits and losses. The only other major difference between a mini account and standard account is that the lower spreads are offered on the standard account which is more appealing. A dedicated account manager is normally appointed to give additional help to standard account holders. 

 

Also there is no maximum trade volume when you use a Forex mini account. Although the standard trade size is 10,000 units, you are not limited to trading one lot. For instance, you can trade 10,000 units, 50,000 units or 200,000 units. This means as you become more seasoned and build up confidence you can slowly increase the size of your positions to maximize profits. In fact, the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade. The ability to customize the size of the trade allows you to have a better risk management. 

 

With less capital at risk in a Mini FX account, it is easier for you to develop a disciplined trading methodology, as well as the confidence needed to be a successful currency trader, without the anxiety and distractions that come with large Profit and Lose swings.

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Guaranteed Stop OrderCross
Limit OrdersTick
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Negative Balance ProtectionTick
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Limit OrdersTick
One-Click TradingTick
Additional EducationTick
Trailing StopsTick
Negative Balance ProtectionTick
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