What are micro accounts?

To get started trading in the Forex you would first need to open an account with a broker. Finding one is extremely easy to do nowadays since several dozen of them can be reached by just searching online. Once you determine which one you like best, your broker may give you the option of choosing between different types of accounts including micro accounts.

 

A micro account is an account that does not require a large deposit and is geared towards new traders who do not have or want to deposit a sizeable amount of money in the beginning. The word micro here refers to the minimum number of units of a currency pair a trader can buy or sell at a time.

 

The standard size of a trade in the Forex is called a “lot” which is equal to 100,000 units. This means that if you want to trade a currency pair, you would need to put at risk a minimum of 100,000 multiplied by its current exchange rate, although leverage can help you do this without actually risking the entire amount. With micro accounts, you can instead make smaller trades using micro lots which are equal to 1% of a lot or 1,000 units. Combining this with a high enough leverage, even traders with small deposits can make significant profits.

 

Take note that not all brokers may offer micro accounts. Some prefer to cater to traders ready to invest large amounts of money at the beginning by allowing them to open standard accounts  and trade using lots only. Fortunately, finding one that will suit your requirements and help you build your first Forex experience is still easy to do.