Forex Trading Account and Trade Equity Capital Management
If you are a trader wanting to open a live account and you are doing some research online to find out one or two things before opening, then you have come to the right training website.
Open a live account is different than opening a demo. First as a trader you don’t have unlimited money, maybe you only have $1000 dollars or $5,000 or $10,000 or you are rich and have $50,000 dollars to open one and start with.
First thing you need to select is the leverage you will be trading with, if you are good in trading currencies you can choose 100:1 leverage if not then choose 50:1 leverage if you have not practiced with a demo then choose 10:1 leverage. The other thing is that even though you choose 100:1 leverage for your account; this does not mean that you will trade with all the 100:1 leverage, you will only use 5% of these leverage and only open trades with a maximum of 5:1 leverage. The remaining leverage will be used to maintain what is known as free margin; money required by a broker so as to maintain your open positions.
The other thing to know is what type of account you are going to open, depending on your capital that you want to start with:
If you have $1000 dollars or less
Open a micro account – with $1000 dollars it is best to only transact with micro lots, forget what your broker tells you, anything bigger than micro lots will only increase your risks to levels which you do not have enough capital for. If you want to keep your money an make profits with this micro account trade on micro lots.
If you have $10,000 dollars
Open a mini account – with $10,000 dollars you can open a mini account and transact only mini lots. Trading mini lots on a $10,000 capital is enough capital to allow you to trade and make profits without taking too much risk.
If you have $50,000 dollars or more
If you have $50,000 dollars or more then you have enough capital to open standard lots, and you can open a standard account. With $50,000 dollars then your capital is enough to trade standard lots without much risk to your capital. However, make sure that you have read this tutorial: money management and money management methods.
The other thing to know is that to open a live account you have to send to send to your broker a copy of Government Issued ID card and a copy of utility bill showing your physical address. Some traders are surprised when asked for these documents, but all traders send them before opening their account, it is a requirement by all trading regulators that requires regulated brokers to get these documents before accepting a deposit from anyone. Also make sure you select a regulated Forex broker that way your money is safe.