Stocks Accounts
2 Types of Stocks Trading Accounts
In recent years retail stocks has grown hugely in popularity and the demand for different types of stock trading accounts has grown. There are many different stocks account types available to any stocks trader who wants to invest in the online stocks market - Stocks Account Meaning.
The stock trading market is a highly stocks leveraged market for speculating on stocks instrument valuations. Stocks traders can purchase large amounts of stocks units using leverage - Stocks Leverage is what makes stock trading attractive to many online stocks traders - with stocks leverage a stocks trader can make more profits or losses because they use less of their capital and borrow the rest.
There are different types of stocks accounts available to help investors better manage their stocks account capital as well as their stocks trade transactions.
How a Real Stocks Account Looks Like
It is therefore important that the stocks traders consider what they want to get out of their stocks, before deciding on the stock trading account type to open.
Below is a comparison of the two types of stocks accounts commonly used to trade stocks. The stocks account types review below explains the different features of each of the types of stocks accounts.
1. Standard Stocks Accounts Explained
Stocks Account Meaning - Standard Stocks Trading Account. A Standard Stocks Trading Account is denominated in US Dollars and stocks trade transactions are placed using standard lots. One lot is also known as a one contract. Minimum opening capital - at least $10,000 USD.
1 contract refers to the minimum size of a single stocks trade transaction. This stocks account option is the most suitable for stocks traders with enough capital to invest in stocks - this stocks account option requires $10,000 to $50,000 dollars in starting capital, For this standard stocks account the stocks trader will not be undercapitalized and with good stocks money management guidelines and stocks trading money management strategies, this standard stocks account option has the best chance for profitability because it is not undercapitalized. Under capitalization is what makes most stocks traders in stocks not profitable.
It is not recommended to open a standard stocks account unless you have an account balance of at between $10,000 minimum and $50,000.
Professional Money Managers recommend $50,000 Dollars minimum to open this standard stocks account and only opening trades with only 2% of the trading capital you have in your stocks account. However, most online stocks brokers will still open this standard stocks account for you if you have more than $10,000.
With stocks leverage of 100:1, you will borrow from your stocks broker (with stocks leverage of 100:1, your stocks broker gives you $100 dollars for every $1 dollar that you have in your stocks account, therefore if you have $1,000, the stocks broker will give you $100 dollars of stocks leverage for every $1 dollar you have, meaning after stocks leverage you will have $1,000*100=$100,000 which you can then use to trade stocks trading).
2. Micro Stocks Account Explained
Stocks Account Meaning - Micro Stock Account. Micro Stocks Accounts use lot sizes of only equivalent one-hundredth that of a stocks standard lot. These Micro stocks accounts are often appropriate for stocks traders without a lot of stocks capital and can sometimes be opened with only a $5 minimum balance.
This Micro stocks account option allows the stocks trader to open trades in micro lots. 1 stocks micro lot is one-tenth of a stocks mini lot and one-hundredth of a stocks standard lot.
This Micro stocks account option is generally best suited for stocks account equity balances that are between $1,000 and $5,000
In stock trading, one stocks standard lot is the standard transaction minimum of a given stocks instrument traded in the stock market. But many stocks brokers offer fractions of this stocks standard lot to enable more retail stock traders to access the stock market. Being able to offer stocks micro lots reduces the minimum stocks trade transaction size thus giving the stocks beginner traders and also those stocks traders without a lot of stocks capital to start trading and get a feel of the stocks market without investing a lot of stocks trading capital.
There are learn stocks online tutorials that a trader can read even before opening a real stocks account, and to get extra practice in stocks before opening a real stocks account a beginner trader should open a practice Stocks Trading demo trading practice account with a stocks broker - so as to practice placing stocks trade transactions before opening a real stocks account and investing with real money.
During the stocks training period using the stocks demo practice trading account, the beginner stocks trader will learn the key factors needed to succeed in stocks such as; stocks education, stocks money management, stocks plan and stocks trading systems.
The types of stock trading strategies used and the skills required for any of these 2 stocks accounts are essentially the same - those stocks skills and stocks strategies required for the Standard stocks account or Micro stocks account are the same the only difference to be adjusted are the stocks money management guidelines for each stocks account type.
