Micro account in Forex

It is common knowledge that trading Forex 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 and inexperienced traders usually hesitate to start their Forex journey.

To tackle this problem, Forex brokers come up with a good solution in the form of a trading account: Micro account. Before registering a live account, let’s learn more about Micro account, how it can be beneficial for traders, and the differences from other Forex account types.

What is a Forex Micro account?

As the name suggests, you can do micro transactions using micro lots in Micro account.

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

in other words:

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

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

Micro account is ideal for beginner traders and retail investors who want to experience real Forex trading, but do not want to invest and risk lots of money. However, experienced traders can also make use of this account type to try out strategies in real market settings, or sometimes test out a Forex broker's tools and services. That way, they can limit potential losses.

Benefits of Micro Forex Accounts

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

Some of these benefits include:

👍 1. An ideal starting point for beginners

Micro account can be a good choice as a transition from a Demo account to a Live account. After practicing in your Demo account, you may be unsure of which trading account to choose. In that case, Micro account can be your answer.

As advised by many professional traders, it is always better to start small, then gradually increase the investment to manage the risks better. That is why, after learning how Forex works using the Demo account, new traders can start and practice actual trading using Micro account 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 and market volatility at your own pace.

👍 2. Real trading with a low minimum deposit

Since the minimum transaction volume in Micro account is smaller than usual, the minimum deposit amount is also lower. Some brokers even offer a minimum deposit as low as 5 USD! You can experience real trading with its real thrill with just a small investment.

It is one of the reasons why many retail investors prefer this account since they do not have much capital to invest.

👍 3. Greater flexibility with less risk

First of all, just knowing that you will trade with less risk helps you calm your mind. Thus, you can plan and execute your trading strategies better with a clearer mind, as opposed to Standard Forex account which is riskier and puts more pressure on new traders.

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, have real practice as much as you want with less risk, and comfortably adjust your positions.

👍 4. A good way to test out strategies and brokers

As mentioned above, some traders usually use Micro account to see if a broker has acceptable standards and services.

By investing a little, you can fully experience trading using the services of a broker. Then, you can find out various things about the Forex broker, from how the broker executes deals, how tight their spreads are in practice, how well they manage slippage in fast-moving markets, how good their tools and platforms are, how good their customer service is, how fast their deposit and withdrawal processes are, and many other aspects. This little test will help you choose the best and most competent brokers for your trading journey.

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

👍 5. Learn how to manage risks and emotions

We all know that a successful Forex trader must be able to manage their risks effectively. In addition, Forex trading tests your emotions, such as excitement, fear, disappointment, and so on. Although it does not seem like it, emotions can significantly affect your decision-making process, so it is important to manage your emotions well.

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

You can also practice managing your trading leverage, margin, and position in this account. It will surely help you hone your trading skills and find out how to use leverage while minimizing risks. After learning how to trade effectively and manage your risks, you can then move to other Forex account types with bigger capital.

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 first the differences between these four accounts so you can decide whether Micro account is the most suitable account for your trading journey or not. The table below can help you choose the best trading account type based on your trading purpose and risks of appetite.

Best Micro Account Forex Brokers

Since the risk in Micro account is considerably smaller, the brokers also get smaller profits from the transactions. That is why not all brokers offer Micro accounts to their clients, and not all of the Micro account brokers can be trusted. You still need to be vigilant in choosing your Micro account brokers.

Here are some reputable and established brokers that offer Micro accounts:

Regulated by 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,‎ AUD, HUF, PLN, RUB, SGD, and ZAR).

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

Traders of Islamic faith can open a swap-free Micro account with the same trading conditions.

Payment methods: Bank wire, Credit Cards, Skrill, Neteller, Sticpay, Bitcoin, Local bank in Botswana

Regulations: ASIC, IFSC, CySEC, DFSA
Country: Cyprus
Founded: 2009
Botswanan Support Desk: Yes

Open XM Micro Account

XM Botswana Review

FBS

As a global broker with more than 11 years of experience, regulated by IFSC of Belize and CySEC of Cyprus, FBS offers 6 types of accounts, including Micro account. The Micro account offered by FBS 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 fixed spreads of 3 pips 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, level-up bonus, and cashback for Micro account. This account is also available swap-free.

Payment methods: Bank wire, Credit Cards, Skrill, Neteller, Bitcoin, PerfectMoney, Local bank in Botswana

Regulations: CySEC, ASIC, IFSC
Country: Cyprus
Founded: 2009
Botswanan Support Desk: Yes

Open FBS Micro Account

FBS Botswana Review