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.

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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 >>
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    The foreign exchange market, or forex, is the market in which the currencies of the world are traded by governments, banks, ... Read Answer >>
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