Characteristics of Forex Trading Account
Our picture of the Forex market is nearly complete. You have just learned how to choose a proper broker, and now it’s time to make the next step – opening an account with them. You can’t trade Forex without an account. Your broker has to calculate your profit, fill the account up or withdraw money from it, keep your trading history and so on. In order to distinguish from thousands of other traders your broker has to give you a unique identification number – your account number!
Virtual and real account. Many present day brokers allow you to open a so called demoaccount with virtual, unreal money so you don’t have to risk your real money. It is a very appealing feature for a newbie trader. As soon as you feel confident with trading the Forex market, however, you should open a real account in order to be able to make real money, however, and withdraw it to fill your wallet or to use on your plastic card.
Cent and standard accounts. Many traders don’t have enough money to purchase and sell currency in traditional volumes. Thus some brokers including Forex4you implemented so called ‘cent-accounts’. Every dollar on cent accounts are broken down into a 100 units (like real cents) and risks are 100 times reduced. It is an intermediate step between a demo and a full-value account.
Verified accounts. There are many crooks and criminals in the world. A hacker from New Zealand can illegally use the credit card of a Swede or an Indian. With the implementation of information technology everywhere a lot of personal data has become more vulnerable to online theft. Many companies working in the
sphere of online services pay a great deal of attention to the security of data transferred and the egality of the financial tools they use. Most Forex market brokers offer a new customer the option to verify his identity with respect to his account. To do so, the trader sends a set of standard documents to the broker; the broker’s customer security department authenticates the documents and, once approved, changes the account status to “verified”. Usually this type of account provides a trader with access to additional services, such as bank transfer options, relations between him and the broker are more transparent.
Balance is the reflection of a trader’s activity. It consists of incoming funds withdrawals, trading results, and bonuses. You can’t trade with an empty balance. The higher a balance is, the more trading possibilities there are for the account’s owner.
Margin leverage is the multiplier of a balance. Usually every account has its own leverage value. The bigger the leverage, the bigger the potential profit – but also the bigger the risks. Each account can have only one fixed leverage value, so if you want a higher or lower margin leverage, just open a new account at your broker.
Options. Every broker can offer you different options for your account, but usually the standard set consists of regular account statements, different media for trading and submitting orders (terminal, phone, etc.), SMS-notifications and so on.
Account number. Every account of yours at any broker known will have a unique identification number.