DEFINITION of Micro Account
A micro account is a forex trade made up of contracts for 1,000 units of currency. Micro accounts are one of three common types of accounts in forex market trading that investors use when trading currencies; the other two are mini accounts and standard accounts. This type of account is usually used by beginner traders.
BREAKING DOWN Micro Account
Forex micro lots are equivalent to 1,000 units of the base currency. Depending on the type of leverage that an investor wants to use, immense gains can still be achieved through a heavily leveraged micro account. These accounts help beginners get a handle on trading and becoming accustomed to managing risk, all while liming potential losses.
Most micro accounts do not have minimum deposits, whereas standard accounts generally have minimum deposits of $10,000. Once trading, micro accounts have a minimum trading volume of 100 units, while standard accounts have a minimum of 1000 units. Through leverage, a trader using a micro account can run long-term positions that handle short-term price fluctuations.
Standard accounts are usually used by large traders and those hoping to make a living or significant income through forex trading.