For several years now, trading in foreign exchange has become possible not only for banks but also for private investors. For this reason, the number of so-called Forex brokers increased significantly. This often leads to perplexity due to the large selection. In this article we will take a closer look at the most important criteria when choosing a Forex broker.
The types of accounts at the Forex broker
The Forex account is a service offered by the operator of a Forex platform. While some Forex brokers offer investors only one real money account, the range of most platforms includes several account types. Thus, it is usually possible to open a real money account, a demo account and a Forex managed account at the same time.
Real money account
There are several types of Forex accounts on the Forex market. The standard account is the full account, which is managed by the investor himself. In addition to the full account, very many Forex brokers also offer their clients mini accounts, which are used very frequently, especially by beginners. The holder of a mini account trades with relatively small amounts. For example, with many brokers, participation in forex trading is possible from an amount of 100 euros.
Demo account
One way to test Forex trading in a completely risk-free way is the demo account, which is similar in structure to a full account and also has the same functions. The significant difference, however, is that a demo account does not trade with real money, but with fictitious funds. Therefore, there is no risk of suffering a financial loss. The demo account is mostly free of charge and limited to a certain period of time.
Another type of Forex Account is the Forex Managed Account. Here the money is managed by a professional forex trader in the optimal case for profit. A Forex Managed Account is an excellent alternative for all those people who do not have enough time to take care of the trades themselves or do not have the necessary expertise but still want to profit from the profit opportunities. When setting up a Forex Managed Account, the investor is free to decide whether to transfer the entire power of attorney or to set certain conditions.
Demo account or real money account?
Most reputable Forex brokers offer customers the opportunity to first create a free demo account. This makes sense especially if you have not yet gained great experience in forex trading. With this account you have the same possibilities as in a real money account with the difference that you do not lose real money but also can not win any. Once you have familiarized yourself with the subject, nothing stands in the way of opening a real money account.
