Table of Content
Table of Content
Forex Mini Lots vs Standard Trading 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 of accounts (see broker trading platform). When trading currencies on a 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 trade. A broker may put a cap based on the existing funding of the trading account and set margin requirements.
Trading standard lots are one of the most popular and established methods for foreign exchange trading. A forex trader can now choose from a variety of lot sizes to execute their trade, including mini-lots (10,000 units) or micro-lots (1,000 units). This flexibility allows traders to find an option suitable for their financial needs when it comes to buying and selling different types of assets.
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, mean that you’ll be assuming the less total risk. For example, a 20-pip loss on a 100,000 USD/JPY position would be $200 ($10 per lot x 20 pips), and the same loss on a 10,000 USD/JPY position in a Mini account would amount to $20.
|Lot||Number Of Units|
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 the 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 a trader (maximising potential profits) One of the best standard trading accounts we recommend is with XM broker. They provide two main types of Standard Accounts (Standard Account and the other is XM Zero Account). Spread is lower on the Zero Account however the commission is applicable on your trades. (* Leverage may differ depending on the country you live in, UK Max Leverage is 30:1 of Forex CFDs). Click on the link below to open a demo trading 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 a trader (maximising potential profits)
With a mini account, you can begin trading in the Forex market without putting too much at risk. Enjoy all the same benefits of full-size FX traders such as access to top-tier software and analysis resources along with educational tools to inform your strategy. Plus, receiving additional assistance from an assigned dedicated manager when needed is available for standard accounts – making it easy to take your successful trades further! So why wait? Start taking control of your finances today by opening up a Mini Account now!
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 the confidence you can slowly increase the size of your positions to maximize profits. 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 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.