Want to find the Best Forex Broker that offers a Standard Trading Account? This account provides a lot of benefits than a Forex Micro Account and Forex Mini Account
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Risk Warning: CFDs are leveraged products 73% of traders lose money when trading CFDs with XTB
Risk Warning: 71% of retail investor accounts lose money when trading CFDs with this provider.
Risk Warning: 79% of retail investor accounts lose money when trading CFDs with this provider.
Risk Warning: 76.4% of retail investor accounts lose money when trading CFDs with this provider.
Risk Warning: 69.45% of retail investor accounts lose money when trading CFDs with this provider.
A trading account is an investment account which holds securities & funds. The investors can buy and sell assets from a trading account whenever they want. This can be an individual trading CFDs (Forex, Cryptocurrency, Indices, Stocks & Commodities). The assets which are held in a trading account are kept separated from other long term investments.
There are multiple Forex trading brokers and they offer different types of trading accounts based on the investor’s choice and capacity of investing (this mean the actual amount of fund they are Investing). 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 Account, Mini Account and Micro Account.
Please be assured that not all Forex brokers offer all three types accounts (see brokers). 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. It’s important to understand the meaning of Forex Leverage and Trading Margin.
Leverage Trading: Leverage is the size of a trading position permitted based on how much you funds/equity you have in your trading account. Majority of brokers offer 20:1 to 400:1 leverage trading. Higher leverage means more chance for Increased profits as well potential for higher losses. For example, a leverage ratio of 100 times (100:1) means if you take margin on your deposit of say £1,000 you can take a trading position of up to a maximum £100,000. Due to recent ESMA regulation all brokers licensed in the EU can only permit a max leverage of 30:1 on certain trading assets (this is only applicable to beginner/retail clients. Professional client with solid trading track record can enjoy high leverage accounts with EU regulated brokers).
Trading margin: Margin is a ‘good faith’ deposit – the collateral that is held by the broker to hold open a position. This is not a transaction cost, nor is it charged to your account, but serves to ensure that you have sufficient balance in your account relative to the size of your position.
The standard account is the most common and most popular of all the accounts and this is because of its high benefits. It is suited best for Institutions, experienced investors & individual who have available funding (suitable of $1,000 plus). This account offers a standard lot of currency i.e. 100,000 units.
This, however, is not to say that an investor must have $100,000 in order to start trading. Many brokers have different leverages and margins, and based on these factors, they can offer the investor to trade with a minimum of $500. To Open a Standard Account with Pepper Stone Broker the minimum deposit is only $200. (Open Account).
Investors who have a good knowledge of the Forex markets and are experienced in trading generally prefer to have standard accounts so as to enjoy the benefits which are not available with other accounts. The leverage of mini and standard accounts are the same, and in addition, a standard account also includes an array of account types, different account denominations, better client service and the facility of trading with mobile.
Without a Forex trading platforms, traders who want to invest in foreign currency need a large amount of money and also a good relationship with the foreign banks. Brokers make this task easy for the traders.
Forex brokers generally offer a list of the prices from the banks in which they have some Forex liquidities. They compare the prices of multiple banks and choose the best price available for their clients.
They also offer a demo account or practice account which a trader can open by giving minimal information. The purpose of a demo account is to provide traders with some practice on trading until they feel they can invest real money in Forex trading.
Forex brokers charge a commission every time the trader makes or close a trade. Whether investors face loss or enjoy gains, the brokers keep making money by collecting the profits between the price traders pay and the market price. This is also called spreads, and one advantage of having standard accounts is that it is very low. The change in relations between the currencies in Forex trading is measured by a unit called Pip, and it starts with as low as only 0.5 pips on major currencies in a standard account. Brokers offer Fixed & Variable Spreads. Pips on Fixed Spreads never change which suits traders knowing what they going to pay the broker for each trade. Variable spread accounts vary minute by minute and coincides with market action and volatility. For example, XM Standard Account only offers Variable Spreads to its users whereas XTB broker has slightly more flexibility in offering both Fixed & Variable Spreads.
Lot |
Number Of Units |
Standard |
100,000 |
Mini |
10,000 |
Micro |
1,000 |
A ‘Lot’ is the lowest trade size, which a trader can buy in order to trade in the Forex Market. Lots have a major impact on the risk the investors/trader are taking.It is essential to calculate the lot size because this helps the traders in anticipating how much money they are risking.
Standard Trading Lots are best for experienced trades, and brokerage firms require traders to have a large minimum balance to start trading. Below is the standard calculation if a trader was to have two seperate $5,000 & $20,000 ‘Standard’ Forex trading accounts. In the below calculation we will look at the offering of an XTB Standard Account. We will calculate how much you can potentially earn and why you should be careful when calculation risk. See how risk differs when we are trading from both standard accounts and how it impacts how much you are really risking and willing to make. Imagine we are about to take a EUR/USD trade your risk to reward ratio if 3:1 i.e. for every $1 you risk you are looking to profit $3. You are only looking to risk only 1% and stop loss is at 40 pips with profit target at 120 pips. We need to calculate the exact Lot amount we need to trade with?