Micro or Regular Accounts?

[lmorgan099]

There is absolutely no good reason for someone who has never traded live before to open a full size account with Forex. Start micro and work your way up.

It used to be that micro accounts that allow you to fractionalize lots and trade as small as .01 cent per pip didn’t exsist. So, IT USED TO BE true that if you opened an account with a very small amount you were already done because you could only trade lots too big for your account, which would cause a margin call very quickly.

Such is not the case anymore. With the ability to trade down to .01 cent you can start an account with a very small amount and control risk and money management very easily.

Trading live is sometimes nothing like demo and sometimes very much like it. Which is to say it is the same animal with different stripes and similar but different behaviors.

Most, probably all, new live trades blow their first accounts or at least lose most of it before they learn to be consistently profitable.

I started a micro account with IBFX over a month ago with 100 dollars. Started out good. Up +25 bucks first two days. Dumb luck. Took it all the way down to 30 bucks by making noob mistakes everyone makes and being a victim of the psychology that happens only on a live account. Now, I’ve learned a thing or five and my account is up to 200 bucks and I’m being consistent and avoiding noob mistakes.

This is all great and I’m learned and getting some real trading experience, not demo. But, I would probably be severely pissed if I jumped in full bore and put in 50k or even 100K and lost that much of my account initially.

Point is a large starting account does not guarantee that you will not lose any less quickly. Yes, you will make more money on a larger account. But, if you are new it’s more probably you will lose your account. I recommend dipping your toes in the waters first with a micro account, instead of jumping in headfirst only to find out the water is shallow and you break your kneck or there are sharks.

Beyond knowing that you have a good trading plan and can consistent with it another reason to try a micro account, is to guage the broker of your choice, the platform and connectivity. I’d hate to start a 50k account only to find the broker is a total crook and I get disconnected all the time.

wowww �Most, probably all, new live trades blow their first accounts or at least lose most of it before they learn to be consistently profitable�.
Good recommendations, can I ask you something? How long do you recommend to practice with the demo account before to do it with real money?..

[ThePhoenix]

wowww �Most, probably all, new live trades blow their first accounts or at least lose most of it before they learn to be consistently profitable�.
Good recommendations, can I ask you something? How long do you recommend to practice with the demo account before to do it with real money?..

IMO, as soon as you meet the following four criteria.

1. You are comfortable with your platform and any indicators or setups you use to trade.

2. As soon as you have developed an edge that has more winners than loser and the losers don’t cancel out the winners.

3. You can fully accept the risk of each trade.

4. You understand the importance of money management.

Once you’ve developed a consistent edge it quickly becomes pointless to endlessly demo and backtest. You will learn more trading live in few weeks, with small amounts, then you will with years of demo and backtesting with imaginary money.

The learning isn’t just about the markets or trading, it’s also about yourself and how you think and react in a real situation.

[chubspips]

I disagree with this theory however. Its nice to see that you are back on your soapbox Phoenix, but the reality is the Bottom Line, i.e. realizing profit/loss. Not so much an inward look at “who you are”.

Now, if you are not a patient person, forex probably isn’t for you. Further, if you feel the need to always been in a trade, forex probably isn’t for you.

If, at some point, you are seriously looking at funding a live account, there are 3 levels at which I would consider beginning at if I were starting from scratch. A micro account with an investment of $500-$1000, A mini Account with a minimum of $4k, or a full lot account with a minimum of $10k. Ofcourse, that’s just me and opinions vary, but, to have a decent amount of leverage to “let a trade develop” requires a level of leverage that smaller accounts than these examples don’t allow.

Good luck and good pippin,

Chubs

[ThePhoenix]

I disagree with this theory however. Its nice to see that you are back on your soapbox Phoenix, but the reality is the Bottom Line, i.e. realizing profit/loss. Not so much an inward look at “who you are”.

Now, if you are not a patient person, forex probably isn’t for you. Further, if you feel the need to always been in a trade, forex probably isn’t for you.

If, at some point, you are seriously looking at funding a live account, there are 3 levels at which I would consider beginning at if I were starting from scratch. A micro account with an investment of $500-$1000, A mini Account with a minimum of $4k, or a full lot account with a minimum of $10k. Ofcourse, that’s just me and opinions vary, but, to have a decent amount of leverage to “let a trade develop” requires a level of leverage that smaller accounts than these examples don’t allow.

Good luck and good pippin,

Chubs

A seriously doubt that you do or have ever traded live. Otherwise you would know that, “having a look inside yourself,” as you say is very important. There is a lot of trading psychology that traders often create within themselves before they ever realize profit or loss.

Also, what you said about small account not having enough leverage is tottally incorrect. I have 400/1 leverage on a micro account I started with $100. How is that not enough leverage? Or, did you mean not enough margin in your margin account. Because the terms although similar are not the same thing.

With micro accounts and the ability to trade fractional lots down to .01 cent a pip you have plenty of room for any trade to breathe. Having a small amount of, “margin,” in a micro and trading fractional lots allows trades enough breathing room for retraces and things of that nature.

The only problem with a micro account is when someone like you who doesn’t understand, “leverage,” and, “margin,” Starts a micro account and, “leverages,” the whole, “account margin,” to it’s fullest potential and trades lot sizes that cause a margin call with just a few pips, because the per pip value is a rediculous amount of the the whole account.

P.S. LOL, soapbox? Aren’t you the guy who wrote a rambleing post about how you, “see a need,” and are going to save the world with the multimillion dollar trading account you think you are about to build?

[StxyLo]

IMO, as soon as you meet the following four criteria.

1. You are comfortable with your platform and any indicators or setups you use to trade.

2. As soon as you have developed an edge that has more winners than loser and the losers don’t cancel out the winners.

3. You can fully accept the risk of each trade.

4. You understand the importance of money management.

Once you’ve developed a consistent edge it quickly becomes pointless to endlessly demo and backtest. You will learn more trading live in few weeks, with small amounts, then you will with years of demo and backtesting with imaginary money.

The learning isn’t just about the markets or trading, it’s also about yourself and how you think and react in a real situation.

This is a great post!
It�s simple but it�s a nice structure that you can take under consideration when opening a live account.
As a beginner I congratulate you not only for your experience but for be willing to share your knowledge

[TraderBoy]

I think no matter how confident you are of your system, you must ALWAYS gradually test the waters. I know it may sound cliche’ but trading LIVE is different from trading demo accounts. I don’t just mean psychologically different, but there are concrete differences as well such as different interbank feeds of quoting and execution.

Thus, i suggest you use a micro account first. I know this from experience because i was pretty confident trading demo and then micro and then i upgraded to a standard account, however, that’s where i got burned. This is just from my experience. Thus, i suggest you be careful.

[Ritpip]

I think no matter how confident you are of your system, you must ALWAYS gradually test the waters. I know it may sound cliche’ but trading LIVE is different from trading demo accounts. I don’t just mean psychologically different, but there are concrete differences as well such as different interbank feeds of quoting and execution.

Thus, i suggest you use a micro account first. I know this from experience because i was pretty confident trading demo and then micro and then i upgraded to a standard account, however, that’s where i got burned. This is just from my experience. Thus, i suggest you be careful.

You’re right, demo and real account are different in terms of feed and execution though if you really get to fully understand everything when you demo I guess you won’t get burned when you go real. Micro is ok to start up.