Selecting the best forex trading account is essential for any aspiring investor aiming to be successful. As you start your Forex trading journey, choosing the right account type will be the number one decision you need to make.
Since there are so many variables affecting this choice, there is no universal right or wrong; all that matters is which Forex account type is best for you. Based on your level of experience, capital, and trading style, you can open a Forex account type that suits you. Besides these aspects, you must also consider the features offered by the broker’s account.
Choosing The Best Forex Account
Opening a new Forex account is an extremely important step, especially for beginner traders. Several factors should be taken into consideration when choosing the appropriate Forex account type. Choosing the best Forex account takes time as well as knowledge. It is crucial to research thoroughly and avoid making rash, rapid decisions.
There is a main must-have list to determine the best forex account type. Let’s discuss them one by one.
Trustworthy Forex Broker
To avoid potential trouble down the road, it’s essential to trade with a regulated and supervised broker. Regulated trading firms have strict standards they must adhere to, meaning you can trust them as a trader in this volatile market. In addition, the forex accounts are highly secured by the broker when it has financial audits by third parties and financial authorities.
Account with Tight Spreads
So, just what is Spread? If you take the bid price and ask rate of any currency pair or asset and calculate the difference between them, this is precisely what spread means. It’s a warning sign if your forex brokers’ spreads are higher than usual – many brokers make money by taking advantage of high spreads from their clients. Therefore, it’s best to choose a broker that offers low spreads in order to maximize your profits!
Varieties of Account Types
Every trader is unique, which means having a variety of account types to choose from can be quite advantageous. The most reputable Forex brokers know that giving traders plenty of options goes a long way — after all, people respond best when they have the freedom to make their own choices rather than being forced into limited ones. The right broker should recognize this and strive to provide different kinds of accounts that cater to an array of financial abilities, needs, and aspirations.
Platforms and Trading Technology
A trustworthy trading platform, trading apps, and tools are essential for choosing the account. Technology should be advanced and highly secure to help traders in their trading activities. The platforms and tools must include advanced MT4 and MT5 servers, mobile applications, copy trading solutions, money management functions, charting software, automated trading tools, and analysis tools. These are all different factors that guarantee effective trading with your forex account.
MetaTrader 4 (MT4) is considered by the vast majority of forex traders to be the best platform for forex trading in the modern era. It is well known for its user-friendly interface, making it easy for both new and experienced traders to trade with ease and comfort. Traders of all levels find this Forex platform easy for trading multiple currency pairs and other financial instruments such as CFDs, indices, futures, commodities, and even cryptocurrencies.
Ultra Fast execution
Look for brokers that can offer fast execution speeds. The forex market can move quickly and requires forex traders to have access to reliable, fast order execution. This is particularly important if you are making frequent trades throughout the day, as even small delays in order execution can mean big losses for forex traders.
Choose an account type that offers a wide range of trading instruments. This can include forex pairs, commodities, indices, stocks, and more — each of which will have its own unique opportunities for traders. In order to be successful in forex trading, it’s important to have access to a variety of different trading instruments and assets so that you can always find the right investment opportunities. Gold for example is a great trading instrument during times of economic and political instability.
For example, a broker might limit the number of currency pairs available to micro account holders, while standard account holders will be able to trade all currency pairs along with other assets like commodities and stocks. The best forex account is the account with no limitations on trading currency pairs, and any account holder can enjoy the freedom of trading multiple assets like forex, metals, energies, indices, and cryptocurrency.
Fast Deposits and Withdrawals
It is essential to select an account with a broker who offers fast deposit and withdrawal options. Instant deposits enable you to easily follow market trends and take advantage of intriguing opportunities that may occur unexpectedly. And in case you need access to your funds quickly, withdrawals should be effortless so that they are returned within at most just several business days. Payment options provided should be effective and have local payment systems and no commission on transactions.
Education and Analysis
Forex trading requires access to high-quality analysis and education resources. Whether you need help developing a forex trading strategy, picking the right forex indicators, or simply increasing your understanding of forex market trends, it’s important to have access to reliable resources that can support and guide you at every step along the way.
What is the Best Account Type for Forex?
Standard, CENT, ECN, and Demo are the four best forex account types—and each has its own advantages and disadvantages. Choosing the best Forex account type for you involves careful consideration of several factors, including what type of trader you wish to be, your tolerance for risk, the amount you invest, and your trading strategy. It is important to select the best Forex account for you, as it impacts your performance and profits. Let’s go over each one individually.
Standard Account – Most Popular Trading Account
As the name suggests, the forex standard account is the primary trading account offered by most Forex brokers. The name may vary from broker to broker; it may be called a classic account or carry the broker’s primary account name. The main advantage of using a standard account is that brokerage firms typically offer their best features and benefits to standard account holders. For Standard accounts, 1 lot = 100,000 currency units.
Another beneficial thing about choosing the standard account is that you are free to trade a variety of trading instruments like currency pairs, commodities, high leverage, low spreads, high affiliate rebates, seasonal bonus programs, and the ability to trade in more volumes simultaneously. Using a standard account can also result in greater profits if you manage your trades well.
Despite the fact that using a standard account can be more profitable, it is also likely to be riskier. You need a relatively high knowledge of forex instruments and trading knowledge in order to open a standard account. Thus, this type of account is more suited to skilled and capital-rich traders.
CENT Account – Best for Low Capital Investment
A Forex CENT account is a trading account with a balance measured in cents. Cent account can be also called a Mirco account or Mini Account as well. This account is measured by Cent, 1 USD = 100 cents. CENT forex accounts are typically ideal for Forex beginners since they allow trading with real funds without risking too much.
Beginner traders can use CENT accounts to make the transition from a demo to a real trading account. The minimum lot size required is 0.01 lot, Therefore, it is possible for anyone to enter the forex market and begin trading with very small capital.
CENT accounts are best for testing and developing forex trading strategies. With the low-risk advantage, you can experiment different trading strategies while simultaneously sharpening your skills and gaining experience. However, a smaller capital will only yield smaller gains. If you want to gain bigger profits, it’s not the best idea to open a CENT account.
ECN Account – Direct Access to Market
ECN stands for Electronic Communication Network; it is a system for trading Forex without agents. ECN accounts are one of the most popular account types because of their transparency and direct market access. Forex brokers offer an ECN account along with traditional accounts and charge a commission per lot, with lower leverage and minimum deposit.
ECN accounts are a perfect choice for professional traders seeking optimal trading conditions. With ECN accounts, trade execution can be faster than with other account types since all trades are executed immediately without requotes. Since ECN accounts instantly match orders from traders with the best buy and sell prices, they offer lower spreads.
Demo Account – Best for Beginner Traders
When it comes to Forex account types, a Demo account is the one that you will come across at most brokers. If you are new to Forex trading and want to explore the Forex market without actually spending your money, a Demo account is the best forex account you need now.
Trading on a demo account mirrors real-world forex trading. Demo accounts users can explore real-world trading functions, like analyzing price movements, testing out risk management strategies, understanding spreads, and leverage tools, and utilizing stop-loss and take-profit orders.
Many people on the Forex market have this misconception that demo accounts are best suited for beginners only. While the truth is, demo accounts can be very beneficial even to those who have extensive experience in Forex trading. One of the best aspects of demo accounts is that they are an ideal tool for exploring and experimenting with new forex brokers, platforms, and strategies.
Effective Examples to choose the Best Forex account
Given the fact that the Forex market is home to a diverse range of traders of varying expertise, forex brokers are offering multiple accounts with different conditions, rather than only providing one account. Having multiple Forex account types to choose from gives traders a greater chance of finding an account that suits perfectly their needs.
Choose what is suitable for your strategy
Choose the account that is most suitable for your trading style, funds, and strategies. Some accounts are best suitable for beginners to get started with, while others are better for those who want to deposit $100 or less, while still others are best for traders looking to make large investments. As trading preferences play a large role in which account is best overall, there are no absolutes. Below, we discuss everything you need to consider while choosing the best Forex account type that fits your needs.
Review the minimum deposit requirement
Your first consideration when choosing a Forex account type will be what is the minimum deposit required. Many brokers offer the best conditions only to those who can afford to make a large investment. Those who want to start with a small investment will need to compare brokers to find the best account with a minimum deposit requirement. AximTrade ranks among the best brokers in this regard.
This forex account lets you start trading with as little as $1. However, a lower investment won’t yield big returns. If you are new to Forex and would like to explore the Forex market in real-time with small capital, a CENT account would be a good place to start.
Calculate the transaction costs and commissions
Forex brokers charge fees in one form or another, and each trade carries a commission. Traders cannot ignore these costs as they can drastically affect portfolio performance. It’s therefore important to consider your transaction costs, spreads, and commissions when opening a Forex account.
- Check on Spreads: A spread is basically the transaction cost for a trade measured in pips. It is the difference between the Bid and Ask price of a currency pair. The larger the gap, the higher the spread. Spreads can be influenced by many factors that include market volatility, trading instruments, and liquidity. The best forex account is the one with the tightest spreads on most trading assets.
- Examine the Commission charges: While the spread refers to the trading cost, commissions are paid at the entry and exit points of the trade. Some brokers may offer lower spreads, then offset them with higher commissions. Make sure to check these prices before opening an account so that you are aware of all fees. Keep in mind that the brokerage fees can eat your profits, and look for a broker with lower fees. Enjoy lower spreads on all major currencies from 0 to 1 pip with AximTrade. The price you want to buy or sell is your choice, with 0% commissions on some accounts.
- Look over Swap Rates: Swap rates or rollovers are overnight interest rates that are added or deducted from holding a position overnight. Overnight Trading Costs are important to monitor, as they increase the longer a trade remains open. Since a swap can be viewed as a form of interest or a fee charged by a broker, it poses a problem for Muslim traders following Sharia law.
Benefits of Choosing The Right Account
It is crucial to have a solid understanding of forex trading strategies and market trends in order to be successful as a trader. This involves developing a strong sense of discipline, being able to manage risk appropriately, setting realistic goals, and maintaining focus on your long-term objectives.
If you are serious about forex trading and want to achieve success in the forex market, it is essential to take the time to carefully research your forex account options and choose a forex account that meets your specific needs. With the right forex account, a solid trading strategy, and plenty of dedication and hard work, you can achieve great results and be on your way to becoming a successful forex trader.
AximTrade offers a variety of options when it comes to forex accounts. Traders can choose the best account type based on their trading strategy, experience, and investment capital. AximTrade offers up to 15 trading accounts, including 7 Standard Accounts, 2 Cent Accounts, 5 ECN Accounts, and 1 Infinite Leverage Account per Active Member Area.
AximTrade MetaTrader 4 provides easy access to the market from anywhere. You can access AximTrade’s MT4 platform from anywhere and anytime and stay updated on market activity from your laptop or smartphone. The AximTrade MT4 platform allows professional traders to manage multiple forex trading accounts effectively and efficiently.