For effective and profitable trading, it is important to choose the right type of a trading account. The choice depends on the knowledge level of a trader, the preferred style of trading, the amount of capital and the risk level that the investor is ready to assume.
Trading accounts are divided into several types: demo, standard or classic, cent, ECN, swap-free.
Demo
Perhaps, this is the first account the trader gets acquainted with entering the Forex market. Demo accounts are a complete prototype of real accounts, the only difference is virtual money. Features of a demo account:
- it is absolutely free, to open such an account you do not need to deposit it with real money;
- trading is carried out on virtual means, therefore there is no risk of losing real money;
- as usual, there are no limits on time and quantity;
- execution speed and trading conditions on demo accounts are the same as on real ones.
To start trading on the forex demo account with JustForex it is enough to download the MetaTrader 4 trading terminal and to fill in the form on the site. Demo accounts can be opened in any required quantity. The demo account is a good solution for testing trading conditions and choosing the optimal account type.
Not only beginners trade on demo accounts, but also seasoned traders. They usually return to the demo trading to test new trading strategies, tactics and Forex advisors.
Cent
Having acquired the necessary trading skills, you can switch to real accounts. But do not rush to invest large amounts, start with cent accounts. This type of account refers to the real one, although all operations are conducted in cents. The cent account allows trading in the Forex market with minimal costs. Also, you can learn to manage your finances.
Such accounts forex brokers offer customers are very convenient, as you can deposit it with $10, and see 1000 cents on the balance. Beginners get the opportunity to trade with real money, that means that losses and profit are perceived as real ones.
Standard or Classic
The most common type of the real account with classic trading conditions. The standard account can be called the most universal. Features of such accounts are:
- high leverage
- no commissions
- wide range of trading instruments
The standard account is appropriate for newbies and experienced traders, which are aimed at medium-term and long-term trading strategies and do not have large deposits. Standard accounts are opened by traders who prefer trend trading strategies. However, it is not worth using scalping or news trading.
ECN
The ECN account is intended for those traders who trade within a day, opening short-term transactions.
A distinctive feature and the main advantage of these accounts is the absence of intermediaries, as trading is conducted through an electronic system that directly connects the trader with liquidity providers. Brokers, in turn, do not interfere in the trading process.
- Low spreads – spread ranges from 0-0.5. If a trader opens a large number of transactions, low spreads help significantly reduce the costs of trading.
- Market Depth – here you can find information about orders of a certain instrument. The trader can more accurately analyze the current situation on the market.
- Fast execution of orders – orders to buy/sell are executed in a split second.
JustForex offers low spreads from 0 pips. You can view the current values of spreads on ECN accounts in real time on the broker website.
This type of account gives the trader the most accurate execution of orders, a good difference in the spread and a high liquidity.
Swap-free
Swap-free account does not have a commission for transferring open trading positions through the night. Such accounts are often called Islamic. These types of accounts are considered Islamic, since Sharia law prohibits working with accounts where swap is calculated. Due to this Islamic accounts were created.
These are the main types of accounts used for trading on Forex. Each type of an account has its own features. To choose the account, you first need to get acquainted with the basic parameters: range of instruments, spreads, the amount of commission, execution method. Explore the characteristics of each type of the account and make a choice in favor of the most suitable for you.
