Forex Micro Accounts and Lots Explained

Forex micro accounts aren’t extremely common though some Forex brokers do offer these Forex micro accounts. These types of Forex accounts allow traders and investors to trade and invest in currencies with much smaller increments.

To put these micro accounts into perspective, a standard lot is 100,000 units worth of the base currency. A mini lot is 10,000 units worth of the base currency. A micro lot is 1,000 units worth of the base currency.

So, all you really need to know about micro accounts is that they allow you to trade with much smaller increments, more specifically 1,000 units worth of the base currency you are interested in trading. These micro lots also, regarding both trade and account sizes, usually have an upwards limit.

Because you do not have to trade as much currency with micro lots as you would with mini lots or standard lots, there will be a lot less risk involved and this means that it is perfect for beginners or for traders and investors who want minimize risk. Micro lots are also perfect for traders and investors who want to test the Forex market a little without having to again risk as much of their money as usual – perhaps if the trader or investor was looking into trading exotic currencies, they might use micro lots to begin with before moving onto mini lots and standard lots.

Micro lot brokers also tend to offer lower minimum deposits meaning you do not have to have as much money prior to trading to open an account with a Forex broker. Sometimes brokers might have high minimum deposits and you might not want to risk this minimum deposit or you simply cannot afford to lose the minimum deposit – in this case, micro lots are a perfect alternative to start out in the FX markets.

Many Forex beginners will turn to demo accounts to start experimenting with the Forex market and to get a feel for currency trading. Although demo accounts are a good way to start and most brokers do offer them, some of the trading psychology is lost when trading with demo accounts; traders and investors tend to be a lot more impulsive and take more risk when trading with virtual money. With a Forex micro account, you can learn about the currency market as well as keeping the emotions of trading active in your brain since you are trading with real money!

In conclusion, Forex micro accounts allow traders and investors to trade with Forex micro lots that are significantly smaller than Forex mini lots and Forex standard lots. You can trade with as little as 1,000 units worth of the base currency that you are interested in and these micro accounts allow you to trade with these micro lots that will minimize risk while allowing you to experience the markets and the emotions of trading. They are more popular among beginners though even experienced traders and investors sometimes take advantage of micro lots since it allows them to test and experiment with the currency market without having to risk as much money as they would usually.

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