Most traders who have just recently started working on Forex make a fairly common mistake – they think that once they start trading they can get rich. In practice, however, in most cases only few people manage to really quickly increase the size of their deposit. There are many reasons for failures, but the most common are inability to realign one’s trading strategy in time or to resist the onslaught of prices on a real account. Thus, a beginner usually invests all his/her funds in the deposit and loses it very quickly. After that few of them dare to try again and usually quit Forex forever.
The optimal way out in this case is to work on cent accounts. They have certain features, which, above all, have to do with the lot size. If on the standard account minimal lot size is usually 0.1, in case of cent accounts this value is reduced to 0.001. With these figures, it is quite difficult to talk about serious profit, but this account type is often used for “winding up” with small amounts of money. Here is an example: using a leverage of 1:500, a trader can earn only 1 cent if the price passes 10 points and 10 cents if it is a hundred. On average, traders earn 30-70 cents per trade.
What are the main advantages of cent accounts?
One might get the impression at first that working with cent accounts is just a waste of your time, and in this case there is no point in hoping for any profit. But in fact, cent accounts are a great way to gain priceless trading experience. Some may say that a demo account is good enough, because you can use it to practice with much larger amounts. However, a demo account is a kind of virtual training simulator, which does not allow you to experience all of the trading emotions that are present in real trading. There are many examples when newcomers succeeded in trading on a demo account, but as soon as they opened their first live account everything went wrong.
Who needs cent accounts?
Trading on cent accounts will be useful to anyone who has had previous experience with demo trading and has some insight into how financial markets work, but is wary of investing large sums. Cent accounts would be a good option for those who are not ready for big accounts. Not every broker offers its clients the opportunity to work on cent accounts. You can find a suitable broker here https://topbrokers.com/forex-brokers-for-usa-traders.