|US||/5||$50||Click for a special offerWebsite|
The minimum deposit is the gateway to a broker. It can make or break an experience for a user, and so is an imperative part of the whole trading experience, one that has the power to retain a user or completely chase him/her away. Even more so when micro lots are considered, since the user will get the best of both worlds – a minimized risk factor and the opportunity to comfortably learn.
The first major pro of a $100 minimum deposit or less is that it opens the door to a whole new audience. Many unexperienced users are looking for a smooth transition, coming from a demo account or a theoretical background to the real FX trading reality where mistakes and miscalculations have real consequences. A $100 minimum deposit, or less, micro lot account really is the perfect starting point. From then on the user can grow, while any mistakes are stress free and can actually help rather than frustrate. Once the user feels ready, he or she can move on to other account types.
Considering how inherently risky the whole FX trading business is, many clients will first want to reduce said risk, but also retain the challenges and intricacies of FX trading. One way to do so is by taking advantage of a $100, or lower, minimum deposit requirement, and if possible a micro lot account, where the risks aren’t necessarily reduces but their outcomes are definitely not as heavy on the wallet as they could be. And even though the rewards are not as high as one would want them to be, the client will nevertheless gain another sough after treasure: actual experience.
A more subtle, but still important, benefit of a $100, or lower, minimum deposit requirement is the exposure to multiple payment methods. With lower minimum deposit the user is encouraged to invest multiple times, and nothing is stopping him or her from experiencing the benefits of various payment gateways. Some might be processed faster, others might have lower internal fees, while some could very well offer better compensation/refund strategies. Having this option is a plus, and can definitely enhance the trading experience for a user and in turn benefit the broker.
There is a last advantage that we can fit in here, that is nevertheless very expedient, when dealing with a broker that offers a micro account with a $100, or less, minimum deposit requirement. It’s that it opens the broker itself to the user, allowing the customer to get a better feel for the broker, to get to know the company, and experience that firm’s take on standardized elements, as well as any unique approaches it bring to the table. It’s really a win-win situation, since both parties will benefit from each other. The client will expand his/her skills while the broker’s reputation grows.
|Min. Deposit||Micro Lot Account||Min. Lot Volume|
|XM||$5||Yes||0.01 Lots (MT4) / 0.1 Lots (MT5)|
|OctaFX||$100||Micro Lots on all Accounts||0.01 Lot|
Another essential aspect to forex trading are lots and their sizes. Lots represent a standardized amount of currency units the trader controls, which can be used to either buy or sell a FX base currency within a platform. In other words, a lot is a unit of measurement of a transaction size, and its size determines the amount a user will buy or sell, which is actually relative to the pip size of the given currency pair. Since pips are a very small change in the value of a currency relative to its paired one, lots allow users to trade large quantities of a currency for actual profit to be generated.
A micro lot is one of the more basic lot sizes, representing only 1000 units of a base currency (say, US dollars) in FX trading. If the pair in question is the EUR/USD pair, then with a micro lot $000 will be bought or sold.
Trading in micro lots is one of the best retail trading strategies to add to your repertoire. It is inherently less riskier, allowing for smaller positions to be opened than the average lot size. A micro lot will effectively curb the risk associated with unpredictable market shifts, making it a great choice for beginners who are still probing theirs skills. Novice traders can hone their trading game by using micro lots, learning the ins and outs of the trade.
On the topic of risk, even intermediary or advanced users may chose to trade with micro lots, despite their level of competency. A major benefit here is that the chances of losing major investments are significantly lower. Working with lower quantities can serve experienced traders to “take in” the market conditions, that is to scrutinize over the current situation and decide the next best move. Should the trader miscalculate, the loss on his part will be lower than if he had previously decided to trade with the standard lot size.
These market conditions can be unpredictable, but historically, certain trends and sudden developments could have been and have been predicted by many who reaped from the results. Micro lots can be helpful to investors with a keen eye for detail and a talent for awareness for upcoming currency inclinations. However, it also helps that trading with micro lots does not draw nearly as much attention from other parties as would with standard lots in the event of a bullseye prediction, allowing the investor to thrive in a less competitive marketplace.
To boot, micro lot accounts give users more time and freedom for both sharpening their skills and finding their niche. On the way, many a trading strategy can be practiced with less backlash, certain broker or platform nuances can be experienced without heavy repercussions, and clients can build their confidence without constantly having to worry about losing a great deal of money.
On the subject of money, micro lot accounts are usually very subtle and significantly cheaper than other accounts, making them accessible to all. These account types are a fine way of starting one’s trading journey without the need to look over one’s shoulder. Broker usually ask for less than $100 as a starting point which cannot be overstated as to its benefits.