Mini Forex Trading Golden Tips and Advice

A mini Forex trading account is extremely helpful for a new trader who is more interested in developing a disciplined, rational trading strategy without focusing entirely on profits and losses.

The reason for the 'mini' is obvious. The forex trading contracts are much smaller than the typical forex trading contracts. Mini contracts are about one tenth the size of a typical forex trading contract. Mini forex trading is an advisable way to start trading the forex if you are staring with a small sum of money. You can test various forex trading systems without a lot o risk, keep good records on your trades and the result, and refine your trading techniques.

Then, as your trading improves and you build your portfolio, you can graduate from mini forex trading to larger, more typical forex trading contracts with confidence that you have a profitable trading system in place.

Mini Forex trading is done in smaller contract sizes of ten thousand units, which is 1/10th the size of the standard account. For opening a mini Forex account you would require 100-300 dollars. Here one PIP is equivalent to one dollar for EUR/USD and GBP/USD.

Getting into mini account trading essentially means that you are engaging in marginal trading. That means that you are leveraging your trades, that is, borrowing money to be able to perform a trade without having to put in the full amount required for a single lot. The money that you do put in from your own pocket is known as a marginal lot. For a mini account, the marginal lot for every $10,000 lot is $50, or a 200 to 1 leverage. When you start a mini account with a minimum of $250, you are trading five mini lots.

In a conventional sense, you should use only one mini lot for every thousand dollars that you have in your account. Say if you have five thousand dollars, you can take only five mini lots. But in mini Forex trading the pip value is one dollar and therefore, you can concentrate on building strategies without paying much attention to the profit and loss.

There are other methods like Base 10 Trading for small traders. However, mini Forex trading is most suitable if you want to maintain the account under $10,000. It will provide you the flexibility of implementing strategies and offer more staying power in the Forex market as you can take advantage of multiple trades without over-leveraging your trading account.

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