Forex Beginner with Low Capital? Start with Forex Mini-Account

When you open a standard forex account with a ratio of 100:1 this means you will need $1,000 on margin to control $100,000 or one pip times 100,000 is equal to $10. So if you risk 10 pips per trade, this would mean that you would potentially lose $100 for any trade that turns wrong.

As per Trading Money Management Rule, if you should only risk 1% of your capital on each trade, this implies you should have an account of at least $10,000. Is this too much for you? No problem, many brokers allow you to open a Mini Forex Account. With such account 1 pip equals roughly $1, but wait, even better some brokers will also allow you to trade a fractional size or lot so that you can choose to only risk 10 cents or 1 cent per pip.

Let's take an exemple (click on the picture below to enlarge it):



As you can see, the size of the trade for this account is 0.01 lot. The profit is $0.90 for 9 pips, so that 1 pip equals only 10 cents.

This is the wonder of Forex Market: you can better control your risk by choosing yourself the right size of risk unit (1 pip equals 1 cent to 10$) also called leverage.

If you're not good at math, you can use the size calculator on the right sidebar of the blog: