Opening your first forex account is among the most important decisions you can make as a beginner trader, and you should not take it lightly. It is common for beginners to choose an account type without fully understanding its features. And for others, choosing from so many account types can be overwhelming since the forex market is so large. The most commonly available forex accounts include Standard, Cent, and ECN accounts. Our focus here will be on the Standard Account Vs Cent Account.
Forex brokers usually offer several trading accounts options, under their own unique brand names, such as micro account, zero spread account, fixed spread account, professional account, investor account, and more. However, traders should learn the specifications for each type to determine which is best for them. The lot size is the most common method by which forex traders classify the type of a forex account.
Standard account and Cent account are two of the most common and widely used account types among forex brokers worldwide. You might end up choosing the best option from Standard Account Vs Cent Account by going through the features and comparing the advantages and disadvantages of each account type. Let’s discuss it one by one in detail.
A standard account is typically the default account type offered by forex trading platforms. As its name implies, a standard account is the most popular and preferred trading account for forex traders since there are no limitations on the features it provides. The main benefit of using a standard account is that most brokerage services deliver better services and perks for the standard account holders.
With a standard account, you are free to trade with a wide range of trading instruments (currency pairs, commodities, high leverage, low spread, high affiliate rebates, seasonal bonus programs etc.) and can trade in more volumes simultaneously. Another advantage of using a standard account is the potential for more profit if you manage your trades well.
However, opening a standard account will require you to have a relatively high understanding of forex instruments and trading knowledge. Despite the fact that a standard account may be more profitable, it is also likely to be riskier. As a result, this type of account is better suited for experienced, well-funded traders.
Advantages of a Forex Standard Account:
- Increases your earning potential: In forex, choosing your lot size dictates how you handle the risks involved in trading. This ultimately determines your success in the long run. For Standard accounts, 1 Standard Lot = 100,000 currency units. A larger lot size increases your overall profitability when a currency pair makes a significant move. With some currency pairs moving hundreds of pips daily, the profit potential is substantial.
- Gets you additional bonuses: A standard trading account also comes with the benefit of receiving bonuses. Most forex brokers recommend the use of standard trading accounts. As a result, you will receive better service and other perks along the way.
- High Leverage: Standard account often comes with high leverage that allows traders to use borrowed funds to boost their account. This way, traders can gain access to positions worth more than their capital investment.
Forex Cent account is widely recognized as the best choice for novice traders since it is beginner-friendly and offers a low-risk start to trading. A Cent account is similar to other account types except that all transactions are executed in cents, instead of US dollars.
To be clear, 1 US dollar = 100 cents. So, if the minimum lot size required is 0.01 lot, it is equivalent to 1.000 cents (10 US dollars). Hence, you can enter the forex market and start trading with just a small amount of money deposited.
Cent accounts are ideal for testing and developing forex trading strategies. By taking advantage of the low-risk advantage, you can experiment with different trading strategies while simultaneously sharpening your skills and gaining experience.
However, keep in mind that you will only get smaller gains with a smaller capital. Therefore, if you want to get huge profits, it’s not the best choice to open a cent account. It is better suited for traders who wish to improve their skills and experience using a real trading account.
Advantages of a Forex Cent Account:
- Low Deposit Requirements: Cent accounts typically require little to no deposit. With a minimum deposit of $1, a trader can easily open a forex account, and the trading balance will be displayed as 1000 cents.
- Live Low-Risk Trading: Beginners can do live trading on a cent account with little financial risk.
- Level-up your trading journey: Many traders use Cent account as a stepping stone from a forex Demo account to a real account.
- Lower spreads: In forex trading, the spread is the price difference between the buy and sell prices. Buyers are required to pay the best available sell price (Ask price), while sellers are required to accept the best available buy price (Bid price). With AximTrade Cent account, you can trade all majors with a spread as low as 1 pip.
- Fixed commission: Executing trades with the lowest spread is highly beneficial for certain trading strategies. As a result, some traders prefer commission-based trade. The broker with the lowest commission per lot is an ideal consideration in this case.
Standard Account Vs Cent Account: What’s Best For You?
As you consider opening a trading account, you should evaluate yourself and determine what factors are important to you based on your trading style, experience level, and starting capital. Both cent accounts and standard accounts have their own unique benefits, but you need to choose the one that is most suitable for you and your trade needs.
Before choosing the best trading account for you, ask yourself these questions:
- How much do I wish to deposit?
- How much risk am I willing to take?
- Would I benefit from advanced trading tools?
Here’s the answer to your question!
A Cent account is worth your money if you are just starting out and don’t have much forex trading experience. It only takes a small amount of money to open a Cent account and begin trading with real money. Although the profit won’t be spectacular and will probably add very little to your overall balance, it is still better than trading in a demo account. Furthermore, the low-risk environment makes it easy to try different strategies, assess the quality of the trading broker, and improve your trading skills.
On the other hand, a Standard account is best for you if you are an experienced trader with established trading strategies and are confident in opening positions with the standard lot size. When you have a good strategy and enough capital, you can target higher returns and enjoy trading different instruments using a Standard account.
Benefits of Choosing an AximTrade Account
While a Demo account is always accessible to new traders to familiarize themselves with a trading platform, most traders prefer to open a live account after testing the platform for a certain period.
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. Account types include Standard, Cent, ECN, and Infinite Leverage accounts. It is possible to have up to 7 Standard Accounts, 2 Cent Accounts, 5 ECN Accounts and 1 Infinite Account per Active Member Area. Here’s a guide on How to Open a Forex Account in Easy Steps.
AximTrade is a fast-growing award-winning brokerage firm in the global markets offering highly advanced copy trading platforms and MT4 execution services. The leverage conditions offered by AximTrade offer the highest leverage in the industry, up to 1:3000. Check the full Aximtrade Review to learn more about the broker’s reputation in the forex market.