Forex Micro Account

It is common knowledge that Forex trading is extremely risky. If you take the wrong steps or do not have enough knowledge and experience, you may lose lots of money within a fraction of a second. That is why new as well as inexperienced traders usually take their time before starting their Forex journey.

Forex brokers have a practical solution for this very issue in the form of a trading account, i.e., the Micro account. Before registering a live account, it behooves you to learn more about the Micro account, the way it can benefit you as a trader, and how different it is compared to other Forex accounts.

What is a Micro account?

A micro account enables you to do your transactions in micro lots.

1 standard lot = 100 micro lots = 100,000 currency units

In other words:

1 micro lot = 1/100 of a standard lot = 1,000 currency units

Therefore, if you add 10 USD to your balance in a micro account, it will show up as 1,000 USD cents. While the Standard account requires 0.01 lots or 1,000 units of the base currency to start trading, the Micro account only requires 1/100 of it, which is 10 units. Since the minimum unit is much smaller than the Standard account, new traders can open a live account with a smaller deposit and do smaller transactions.

The Micro account is ideal for new traders and retail investors who want to experience real Forex trading, but do not want to invest and risk a lot of money. Experienced traders can also use this account to try out their strategies or the forex broker’s tools and services in a real trading environment. In this way, they can limit their potential losses.

Benefits of Micro Forex Accounts

The Micro account is pretty popular in the Forex trading world since it provides both experienced and inexperienced traders with various benefits.

Some of these benefits are as follows:

πŸ‘ 1. An ideal starting point for beginners

The micro account can be a smooth transition from a Demo Account to a Live Account. Even after practicing in your Demo account, you may still be uncertain as to which trading account to choose. In that case, a Micro account can be your solution.

Ask any professional trader out there and they would tell you that it is always better to start small, then gradually increase your investment so you can manage the risks better. This is how new traders can start and practice actual trading with smaller risks.

By experiencing the real market, you will have enough time to study, practice and improve your trading skills before investing more money. You can also get used to trading in volatile markets at your own pace.

πŸ‘ 2. Real trading with a low minimum deposit

The minimum transaction and the deposit amounts are lower in a Micro account compared to other trading accounts. Some brokers even offer a minimum deposit as low as 5 USD! Thus you can experience real trading with a small investment. This is an ideal choice for retail traders with a small budget.

πŸ‘ 3. Greater flexibility with less risk

First of all, just knowing that you can trade with less risk helps you calm your mind. Thus, you can plan and execute your trading strategies better with a clear mind, as opposed to the Standard account which imposes a greater risk on your hard-earned cash.

And because you can avoid great losses by trading in smaller lot sizes, you will have greater flexibility in your trading. You can try something new, practice as much as you want with less risk, and adjust your positions comfortably.

πŸ‘ 4. A good way to test out strategies and brokers

Some traders use the Micro account just to see if a broker has acceptable standards and services.

By investing a little bit of money, you can fully experience the market using the services of a broker. This allows you to size up the Forex broker in terms of their order execution, spreads, slippage, tools, platforms, customer service, deposits and withdrawals, and so on. This little test will help you choose the best and most competent broker for your trading journey.

In addition, traders can evaluate new trading strategies, robots, styles, and algorithms using the Micro account. With less capital and less risk, they can avoid huge losses in case something goes wrong. Then, after finding the best strategies to use, they can invest more money in other account types.

πŸ‘ 5. Learn how to manage risks and emotions

We all know that a successful Forex trader must be able to manage his risks effectively. Forex trading will test your emotions (excitement, fear, disappointment, etc.) so you’d better come prepared. It may not seem like it, but emotions can significantly affect your judgment, so it is important to be in charge of your emotions.

By using a Micro account, you will have the chance to learn the basics of risk and emotion management in Forex trading without having to wager too much capital. These are some of the things that you can experience by live trading.

You can also practice managing your trading leverage, margin, and position in this account type. It will surely help you hone your trading skills and learn how to use leverage professionally. After learning how to trade effectively with proper risk management, you can then move on to other Forex accounts with bigger capital requirements.

Comparison between Micro, Standard, Cent, and ECN trading accounts

Forex brokers generally offer several account types to meet their clients’ trading requirements and needs. Some of the popular ones are Cent, Micro, Standard, and ECN accounts.

You should know the differences between these four account types so you can decide whether the Micro account is the most suitable option for your trading journey. The table below can help you choose the best trading account based on your trading objectives.
Micro Forex Account

Best Micro Account Forex Brokers

Since the risk in the Micro account is considerably smaller, the brokers also get smaller profits from the transactions. That is why not all forex brokers offer Micro accounts to their clients, and not all of the Micro account brokers can be trusted. Therefore, you need to choose your Micro account brokers carefully.

Here are some reputable and established forex brokers that offer Micro accounts:
xm South Africa
Regulated by the ASIC of Australia, CySEC of Cyprus, IFSC of Belize, and DFSA, XM is another trustworthy Forex Micro account broker that you can try. Founded in 2009, this company offers 11 base currencies to choose from (USD, EUR, GBP, JPY, CHF,β€Ž AUD, HUF, PLN, RUB, SGD, and ZAR).

To open an account, you need to deposit a minimum of 5 USD. The spreads are offered from 1 pip with no commission. The minimum volumes for the MT4 and MT5 platforms are 0.01 lots and 0.1 lots, respectively. You can open up to 200 positions with leverage up to 1:30.

Payment methods: Bank wire, Credit Cards, Skrill, Neteller, Sticpay, Bitcoin

Regulations: ASIC, IFSC, CySEC, DFSA
Country: Cyprus
Founded: 2009

fbs South Africa
As a global broker with more than 11 years of experience and regulated by the IFSC of Belize and CySEC of Cyprus, FBS offers 6 types of accounts, including the Micro account. The FBS Micro account is ideal for traders who want to calculate their profits more accurately. All transactions are market executed starting from 0.3 seconds.

By depositing a minimum of 5 USD, you can start trading Forex and metals on the MT4 platform using leverage as high as 1:3000 and a fixed 3-pip spread with zero commission. The minimum order volume is 0.01 with a maximum of 200 open positions and pending orders.

FBS offers a 100% deposit bonus, $123 FREE bonus, and cashback for the Micro account. This account is also available swap-free.

Payment methods: Bank wire, Credit Cards, Skrill, Neteller, Bitcoin, PerfectMoney

Regulations: CySEC, ASIC, IFSC
Country: Cyprus
Founded: 2009

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