Forex Account

DEFINITION of 'Forex Account'

The type of account a forex trader opens with a retail forex broker. Forex accounts come in many forms, but the first that is opened is often the forex demo account.

BREAKING DOWN 'Forex Account'

After the trader has tried out demo accounts with a few different dealers, a funded account would be the next step. Mini accounts, full accounts and managed accounts are the most common types of funded accounts. Mini accounts are similar to full accounts except that currency is traded in lots of 10,000 rather than 100,000. This allows for lower mandatory initial deposits and greater customization of risk management.

Is is important for currency traders to consider what they want to get out of their accounts before deciding on the type to open. Demo accounts and mini accounts are great for the retail forex trader to learn a profitable system and get used to the broker's execution methods. For currency speculators who doesn't want to trade themselves, a managed account may be a better option.

RELATED TERMS
  1. Forex Mini Account

    A type of brokerage account that is used by beginner traders ...
  2. Micro Account

    A forex trade made up of contracts for 1,000 units of currency. ...
  3. Managed Forex Accounts

    A type of forex account in which a money manager trades the account ...
  4. Forex Charts

    A charting package that allows a trader to view historical currency ...
  5. Mini Forex Account

    A type of forex account that allows the trader to enter positions ...
  6. Currency Trading Software

    Trading software to help the currency trader with forex trading ...
Related Articles
  1. Trading

    10 Ways To Avoid Losing Money In Forex

    When approached as a business, forex trading can be profitable and rewarding. Find out what you need to do to avoid big losses as a beginner.
  2. Markets

    Getting Started In Forex

    Before entering this market, you should define what you need from your broker and from your strategy.
  3. Trading

    Working In Finance: 5 Forex Careers

    The forex markets can be both exciting and lucrative. Find out what jobs exist in this space and how to get them.
  4. Trading

    The Pros & Cons Of A Forex Trading Career

    Trading foreign currencies can be lucrative, but there are many risks. Investopedia explores the pros and cons of forex trading as a career choice.
  5. Trading

    Demo Accounts A Good (But Imperfect) Indicator Of Investing Skills

    Scoring huge profits in a demo account doesn't mean you can expect this performance in real trading.
  6. Trading

    Top Reasons Forex Traders Fail

    This market can be treacherous for unprepared investors. Find out how to avoid the mistakes that keep FX traders from succeeding.
  7. Trading

    Can Forex Trading Make You Rich?

    Forex trading may be profitable for hedge funds or unusually skilled currency traders, but for average retail traders, forex trading can lead to huge losses.
  8. Trading

    The Forex Market: Who Trades Currency And Why

    The forex market has a lot of unique attributes that may come as a surprise for new traders.
  9. Managing Wealth

    Forex or Stock Trading: Which Works For You?

    Even though the odds favor stock trading, forex trading has several advantages to offer a particular type of investor.
  10. Trading

    Forex Trading: A Beginner's Guide

    Learn about the forex market and some beginner trading strategies to get started.
RELATED FAQS
  1. What types of accounts are available for forex trading?

    There are many different types of forex accounts available to the retail forex trader. Demo accounts are offered by forex ... Read Answer >>
  2. What methods can be used to fund a forex account?

    The forex market is where currencies from around the world are traded. In the past, currency trading was limited to certain ... Read Answer >>
  3. What are the advantages of using a mini forex account for trading?

    A mini forex trading account involves using a trading lot that is one-tenth the size of the standard lot of 100,000 units. ... Read Answer >>
  4. In the forex market, how is the closing price of a currency pair determined?

    The foreign exchange market, or forex, is the market in which the currencies of the world are traded by governments, banks, ... Read Answer >>
  5. How does margin trading in the forex market work?

    When an investor uses a margin account, he or she is essentially borrowing to increase the possible return on investment. ... Read Answer >>
  6. Is it possible to trade forex options?

    Yes. Options are available for trading in almost every type of investment that trades in a market. Most investors are familiar ... Read Answer >>
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center