Types of forex account Singapore
Forex account is necessary for an individual trader to trade currency pairs and other financial instruments. The account is created on the platform of a broker, which connects the retail traders with the interbank currency market. It can be of different types, each fitting the appropriate style and experience of the trader.
Forex trading account — first pick the demo
Forex trading accounts can be divided into several types. The first type, which is worth paying attention to is a demo. That is the first account that a trader opens with a broker. It does not matter what experience he has, zero or five years. In any case, the trader gets acquainted with the broker, its conditions, advantages and disadvantages through a demo account.
The demo account provides some amount in virtual currency. For example, a broker can give 10,000 virtual dollars to a registered beginner. You do not need to deposit money or undergo full verification for trading. This ease is explained by the fact that the demo account does not contain real funds. These are virtual funds, which cannot be withdrawn from the account.
Otherwise, a demo account provides the same thing as a real account. It can be accessed via the same terminal on the same platform (Metatrader 4 or 5). A trader sees the same rate movement and can work with charts and indicators.
Forex account Singapore, depending on the size
Further, to properly open a forex trading account in Singapore, you need to understand the value of pips and lots. In the forex market prices and profit/loss are measured in pips (point in percentage). The size of 1 pip usually takes $0.0001 for USD-related currency pairs.
The trading volume is measured in lots. That is the number of currency units sold/buy in a forex transaction. Sizes are distributed in this way:
The value of pips depends on the size of traded lots. For a standard lot 1 pip costs $10 ($0.0001 x 100 000). For nano - 1 cent, 0.01 dollars.
Forex account can be divided into categories depending on the lot size you want to trade.
Mini and micro accounts allow you to enter the market with a minimum deposit of $100 or even less. Thus, these accounts are suitable for beginners. Nano and micro-lots can be traded on these accounts.
Standard accounts require you to log in for $100 - $500. Using them, you can trade mini lots.
VIP accounts allow you to trade in standard lots, but market entry is also expensive - minimum 10,000 dollars.
Many brokers offer professional accounts. Depending on the target audience, brands can provide "professional" accounts with mini or standard lots.
Other types of forex accounts
What other types of accounts exist?
An ECN forex account (DMA, STP) implies direct access to the interbank market. That is, the broker sends client orders for execution directly to liquidity providers (banks). The account is provided to professional traders with large trading volume.
Managed forex accounts, aka PAMM - they are managed by managers appointed by broker or client.
Islamic or swap-free accounts. They have no fees for holding a position overnight. This type of account is suitable for traders who hold positions for a long time. The account is called Islamic because it complies with Sharia principles, where you cannot charge or pay interest.