I have explained to you now exactly how forex trading is used. I have told you about picking and choosing currency pairs. I have told you about how pips work and how they’re used to help you determine the exchange rate of currencies. I told you about buying currencies in lots and how different levels of investments are needed to buy them. I am going to go more into detail about the different levels of investment needed to get in at each level.
I have already mentioned that in the 1970s changes were made to the free market to enable anyone to get involved in forex trading. Before then you had to be already wealthy, now you can have just a few hundred dollars to get involved if this is what you want. Picture this; there is the person who doesn’t have that much money to spend but they want to get involved, there is the person who is more middle class and has a little more money to play around with, and then you have your blue bloods who have several millions to move around.
Which level are you?
You can get in on any level you want with forex trading. There are three different levels of accounts you can open up to get you started. There is the micro account, there is the mini account, and then there is the regular account. You’ll need a broker to get started on either level, but depending on your broker is you may be able to get in for a smaller amount then what is average. Let’s dissect the three different levels of accounts so you can see which one is for you.
The micro account
With a forex micro account you can get started with the smallest amount of money. This may be more for the person who is just trying to learn about forex and really doesn’t want to risk a lot of money. These types of accounts can be open with as little as 250.00. You are at a disadvantage though because you can only control small lot sizes so your profits will be small.
The mini account
A forex mini account is almost the same as a micro account. You can get in at 300.00 to 500.00 dollars and be trading in no time. This option may be for the middle class person who ultimately wants to move up to bigger and better things.
The Standard account
With a standard account you will need to have at least 2500.00 to 5000.00 to get started. Your broker will determine the exact amount. This allows you good leverage because you are able to move large lots of currencies and see wider profit margins.
As you can see there are numerous levels to get started on. Depending on your financial level you should get in at a level that is comfortable for you. You should also make sure to practice trading the forex before you decide to get involved seriously. This will help protect you against loss. Trading the forex is a good investment because you can get involved for any level you feel comfortable with, build your skill level up, and then upgrade your account.