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Forex (FX) trading has changed a lot over the past several years.
From a handful of providers in 2002 – 2003 period, there are now more than 50 FX and CFD providers in Australia alone. The number FX and CFD traders have also increased over the years.
In this kind of environment there’s bound to be stiff competition. And at the heart of this competitive industry, providers need to be innovative and creative to attract and retain trading clients.
One area where FX providers are trying to give as much help and support to traders is with the type of trading accounts that are on offer. Whether you’re just a starter – a newbie in FX trading, or you’re more advanced and more of a high volume active trader, there’s bound to be an FX trading account that will suit your requirements.
Today we will look at the different forex trading accounts and their features. Most FX providers offer several types of FX trading accounts to cater to different traders.
MT4 Demonstration (Demo) Trading Account – As the name suggests, this is sort of the ‘Learners’ account and usually aimed at new traders or those who are just beginning to trade FX. Using a demo account, you can familiarise yourself with a trading platform without having to put up a deposit or actual trading capital (your own money).
A demo trading account usually comes with a ‘virtual’ trading capital that may range from $10,000 – $50,000 depending on the provider.
Most of the time, a demo trading account will have all the features and capabilities of a live trading account. This means that you can do almost everything that you want to do in a live trading account using your demo trading account without worrying about trading losses because the account only has a ‘virtual’ capital.
For example, an MT4 demo trading account will give you access to all the tradeable currency pairs. It will let you open and close positions, will allow you to put in stop loss orders and all other basic trading actions. It will also give you access to charts, indicators and other FX trading tools.
The reason behind making all the features of a live trading account available on a demo trading account is to make your transition from one account to the other as smooth as possible. Once you’re familiar with all the features and capabilities, it is much easier to focus on the trading itself rather than navigating through the platform for the first time.
Live Trading Account – This is the next level and type of trading account that you will graduate to once you’ve become familiar with the trading platform using a demo account. A live MT4 trading account will require you to put in a deposit, which may vary from one FX provider to the other. This deposit will serve as your trading capital that will allow you to place trades.
A live trading account will give you access to all the features and capabilities of a trading platform as well as the support and services that providers give to their clients.
For example, aside from being able to do all the trading related actions – e.g. opening and closing of trades, managing and monitoring trades, a live trading account may also give you access to newsfeeds, recommendation services like Trading Central or Autochartist, expert advisors and additional trading tools that you can apply to your trading.
Once you have a live trading account, some FX providers offer more trading account types depending on your level of trading. For example, some FX providers offer ‘Professional’ trading account or ‘Institutional’ trading accounts, which may be more appropriate for high volume traders.
As the names of those trading accounts suggest, they are aimed at professional traders or institutional traders who transact in multi-million dollar trades.
Whether you’re using a demo trading account, a live trading account or a professional trading account, it is also important to make sure that you have access to the most efficient and feature-rich trading platform to ensure an efficient trading.
Given the advancement in trading technology, FX providers have also introduced more advanced trading features in their platforms. And while a number of providers are still using their proprietary trading platforms, some offer multiple platforms to give traders the option to choose.
Today, most FX providers offer MetaTrader 4 (MT4), which has become the most popular and widely-used trading platform among retail FX traders. This is because MT4 is known for its speedy execution, advanced charting options and a wide range of EAs that can help traders be more efficient with their trading.
Whatever type of FX trading account you are using or if you are interested to learn more about the different FX trading accounts, make sure you ask your FX provider for the details of the different FX trading accounts that they offer.
Disclaimer: Articles are from GO Markets analysts and contributors and are based on their independent analysis or personal experiences. Views, opinions or trading styles expressed are their own, and should not be taken as either representative of or shared by GO Markets. Advice, if any, is of a ‘general’ nature and not based on your personal objectives, financial situation or needs. Consider how appropriate the advice, if any, is to your objectives, financial situation and needs, before acting on the advice. If the advice relates to acquiring a particular financial product, you should obtain and consider the Product Disclosure Statement (PDS) and Financial Services Guide (FSG) for that product before making any decisions.