Types of forex accounts. Which to choose?
Hello. Beginners are constantly sending questions a la: “Which Forex account should I open?”, “And if I trade within the day?”, “And what is the best place for an advisor to choose?”, Etc. Let's clarify the differences between the types of accounts on Forex and in what situations which one may be useful to you.
Types of Forex Accounts
Standard (standart, classic) - The most common type of account. Minimum lot 0.01, Stop-loss and Take-profit are set both during the opening of the transaction and after it. As a rule, such accounts have a fixed spread level, which facilitates the calculation of price targets. There may be delays in execution in an active market. Suitable for trading on daily charts and non-aggressive intraday trading (Timeframe not lower than hourly charts). It can also be used when working with trending Forex advisors (not scalpers).
ECN accounts. Suitable primarily for trading intraday with frequent entries and short transactions. And also for scalping robots. Distinctive features of such an account are lower than the standard, but not a fixed spread and the availability of transaction fees. For some reason, many are afraid of these commissions, although, given the lower spread, the costs of a trader per transaction are approximately the same. What's on the ECN, what's on the regular account.
It is also worth noting that ECN accounts have better execution than classic ones, but there are slippages in the active market, as well as widening of the spread. It is worth paying attention to. In addition, you cannot set take profit and stop loss at the same time as opening a transaction, only after the order has been executed.
Alpari recently launched ECN New accounts - the same ECN, but without commissions and with an increased spread. I don’t see the point in them, because one of the main advantages of ECN is lost - low spread. So, it’s worth working with a “regular” ECN.
Non-swap accounts - accounts that do not have a swap (roughly speaking, commission for transferring a position to the next day). Swaps are so small and insignificant that a swapless account will be a good choice only if you or your adviser have held positions open for many weeks. This type of account is distinguished by an additional commission for opening transactions that compensates the broker for the absence of swaps.
Cent accounts - Used most often for working with experts on the martingale, as well as for testing Forex strategies in practice. Read more about cent accounts in this article.
Demo account. Virtual money, but everything is for real: the same schedules, the same prices. You can even open two terminals simultaneously: one with a real one and the other with a demo account and compare prices - everything will be the same. First of all, a beginner forex trader needs a demo account in order to figure out how to trade in the Forex market. Learn the basics.
P.S. I hope this mini-FAQ will help you figure out what type of forex accounts it is worth opening and in what situations. Thanks for your attention.