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FOREX
Swiss
Mini Account
The Swiss
Mini account is designed for those new to online currency
trading and those with limited Investment capital. There
is a smaller deposit required to open a Swiss Mini account
and trading sizes are 1/10th the size of a regular account.
The smaller trade size greatly reduces the risk associated
with currency trading. Although the Swiss Mini account provides
as much or more leverage as a regular account, clients have
the opportunity to take smaller size positions, taking on
less total risk. The Swiss Mini is intended to introduce
traders to the excitement of currency trading while minimizing
risk.
More
Staying Power in the Market
In our experience,
traders with accounts under $5,000 are more successful trading
with a Mini account. Trading currencies during times of
heavy market volatility can be very risky if you are overexposed.
Many traders have accounts that are too small to withstand
even a small market movement against them, or to allow for
the trader to make a mistake. Because of the reduced margin
requirement associated with the Mini account, traders are
less likely to experience early margin calls.
The approximate
pip value on a regular Swiss account is $10 per pip. Therefore,
if you were leveraging $500 to hold a $100,000 (one lot)
euro position (assuming a $2,000 account), the market would
only have to move 150 points, 1.5 percent, to generate a
margin call. This can happen in one day. On the Mini, however,
the margin requirement is only $50 per lot. So a trader
with $500 who opens a 1-lot Euro position can withstand
a market swing of 450 pips.
Develop
a Disciplined Trading Strategy without Focusing on P/L
The Mini account
can be a useful asset in assisting traders to cultivate
a disciplined trading strategy without focusing on P/L.
When trading larger volumes on the standard account, traders
with smaller account balances tend to watch their equity
fluctuate and so base trading decisions on emotional reactions
to these fluctuations. For example, such traders tend to
resist closing-out trades at a loss, using the rationale
that the market will turn around. Undercapitalized traders
also tend to take their profits immediately when the market
is moving in their direction, rather than maximizing their
gains by letting their profits run.
For example,
a 20-pip profit on a 100,000 euro trade is $200. For a $5,000
account, this is equivalent to 4% of the account equity,
compelling the average trader to take his profit, though
the trade has a 100-pip profit potential. On the reverse
side, no one wants to realize a $200 loss, so traders tend
to hold a losing position until the loss is too much to
bear. On the Mini account, this same example would translate
to $20, which takes the emotion out of the P/L since $20
is insignificant to most traders. A Mini account allows
traders to focus on the proper chart points and trade signals,
and really learn currency trading without paying as much
attention to their P/L. In the long run, this will hopefully
lead to more profits and fewer losses. Until clients are
completely comfortable trading currencies on a highly leveraged
basis, trading smaller amounts on the Swiss Mini is highly
recommended.
Mini account
is designed for those new to online currency trading and
those with limited investment capital. There is a smaller
deposit required to open a Swiss Mini account and trading
sizes are 1/10th the size of a regular account. The smaller
trade size greatly reduces the risk associated with currency
trading. Although the Swiss Mini account provides as much
or more leverage as a regular account, clients have the
opportunity to take smaller size positions, taking on less
total risk. The Swiss Mini is intended to introduce traders
to the excitement of currency trading while minimizing risk.
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