Opening a live account in Forex can be a tedious task for beginners especially without a guide for the first time. The steps required to open a demo account is quite easier due to the virtual nature of the account.
Most brokers adopt the same principle, and requirements for opening live accounts, except for some who request extra documents due to their country’s financial regulations, which demands more verification of the applicant’s identity for security purpose.
Before we go further lets consider an important checklist below.
CHECKLIST – What you need to verify before considering opening an account with a broker.
- Is my country amongst the eligible countries allowed to open a Forex account with the broker?
- Does the broker allow payment options available in my country’s financial institution? Can I make withdrawals with the withdrawal options being adopted by the broker?
- What are the fees required to deposit and withdraw from the broker and its custodian bank?
The checklist above is the first thing to consider before deciding to open a live account with a broker.
For now we’ll assume you must have decided on the broker you intend to open a live account with.
The steps below can be applied to other Forex brokers.
Step 1. What kind of account should I open?
This is an important aspect you need to know before opening a live account. There are three major kinds of Forex accounts available by all brokers. I’ll explain them to help you know which account is appropriate for you.
1. Micro Account: This type of account is best for beginners in Forex. It is ideal for participants who have low capital to trade Forex. Very little risk is involved due to the micro nature of the account. The common leverage size is about 400:1, with a minimum of $100 opening balance.
2. Standard account: This account is meant for traders with significant high capital than the micro account. Experience in Forex is a criteria to successfully trade with an account of this nature. The leverage involved here has a higher impact than the micro account. Most brokers usually request a minimum of $2,000 or $5,000 or as much as $10,000 to $50,000 to open a standard account. The common leverage size is about 100:1 with 100,000 trade size.
3. Mini account: A mini account is an account appropriate for both beginners and experts in Forex. It has the capacity to control one tenth of a standard account (i.e. $10,000). It has a common leverage size of 200:1 with $500 or higher opening balance and 10,000 trade size.
It is important to note that the lot size varies according to each Forex broker. Apart from these common types of account, there are proprietary Forex account designed with unique features and specific services.