Micro, Mini and Standard Accounts? | Forex Factory

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Micro, Mini and Standard Accounts?

  • #1
  • First Post: Mar 6, 2008 2:11am Mar 6, 2008 2:11am
Hi!

In financial literature it is widely suggested, that "...you have at least $100,000 of trading capital before opening a “standard account”, $10,000 for a “mini account”, or $1,000 for a “micro account”.

I wonder if this also applies to "real life" situations? I've read somewhere on this forum (I believe it was written by dialist, who has an excellent understanding of all this) that one should have at least $30.000 before changing from micro to mini account.

What is the best possible way to determine the threshold, when should one up his game and change his accounts?

My soon tobe broker (EFX Group) has a fixed lot size: 1 lot = 10.000 units. If I'd like to emulate a micro account, all I would need to do is buy 0,1 lots for 1000 units, 1 lot for 10.000 units (mini account) and 10 lots for 100.000 units (standard account)?

I'd be very thankful for your help with this!
  • #2
  • Mar 6, 2008 4:31am Mar 6, 2008 4:31am
Who cares about lot size?
The market doesn't care if you trade 1 standard lot or 10 minilots or 100 microlots.
  • #3
  • Mar 6, 2008 5:06am Mar 6, 2008 5:06am
Hi,

Be care full of the leverage..to some trader it a dangerous thing if you dont fully understand to use it on you favor.

My soon tobe broker (EFX Group) has a fixed lot size: 1 lot = 10.000 units. If I'd like to emulate a micro account, all I would need to do is buy 0,1 lots for 1000 units, 1 lot for 10.000 units (mini account) and 10 lots for 100.000 units (standard account)?.. Yes this is correct but pls ask you broker about the limit of lot transaction to each type ( 1 lot=10.000 unit is a mini acct).To be under capitalized is a serious thing.So please review your demo trading related to your style of trading or money management that you use...and also the capital resources of yours . btw what Dial post on the beginner forum already excellent .

Suggestion:Mini is good to my opinion..since you can trade it in a standard lot (10) or micro (0,1)...as the start to me..10-20k is good


Quoting hendrix
Hi!

In financial literature it is widely suggested, that "...you have at least $100,000 of trading capital before opening a “standard account”, $10,000 for a “mini account”, or $1,000 for a “micro account”.

I wonder if this also applies to "real life" situations? I've read somewhere on this forum (I believe it was written by dialist, who has an excellent understanding of all this) that one should have at least $30.000 before changing from micro to mini account.

What is the best possible way to determine the threshold, when should one up his game and change his accounts?

My soon tobe broker (EFX Group) has a fixed lot size: 1 lot = 10.000 units. If I'd like to emulate a micro account, all I would need to do is buy 0,1 lots for 1000 units, 1 lot for 10.000 units (mini account) and 10 lots for 100.000 units (standard account)?

I'd be very thankful for your help with this!
  • #4
  • Mar 6, 2008 5:08am Mar 6, 2008 5:08am
: off course the market doesnt care about it at all..the one should care is you (refer to trader--i mean us).

Quoting Tjpld
Who cares about lot size?
The market doesn't care if you trade 1 standard lot or 10 minilots or 100 microlots.
  • #5
  • Mar 6, 2008 6:21am Mar 6, 2008 6:21am
Quoting parlenk
: off course the market doesnt care about it at all..the one should care is you (refer to trader--i mean us).
why would you care when the market does'nt care...
I believe . . .
  • #6
  • Mar 6, 2008 6:29am Mar 6, 2008 6:29am
As long as you're only risking a certain amount of capital it's irrelevant if you trade 10 minis or one standarf lot if you can afford one.
  • #7
  • Mar 6, 2008 6:56am Mar 6, 2008 6:56am
Thank you, parlenk.

My starting balance will be $4000. If I risk 3% ($120) and I have a 50 pip stop loss, I have to buy 2,4 lots of EUR/USD - is that right? (considering that EFX's 1 lot represents 10.000 units and EUR/USD 1 pip value is $0,10) This calculation would be true, if I'd wanted to simulate a micro account.

But what if I wanted to simulate a mini account? Should I then buy 24 lots? And for a standard account, I'd have to buy 240 lots?
  • #8
  • Mar 6, 2008 7:05am Mar 6, 2008 7:05am
Quoting Tjpld
As long as you're only risking a certain amount of capital it's irrelevant if you trade 10 minis or one standarf lot if you can afford one.

I will always risk 2% per trade. But different accounts would give me different lot sizes. I'm not sure how to calculate my lot size for EFX's 1 lot = 10.000 units, because other brokers have something like this:

Micro Account:
1 lot = 1000 units
EUR/USD pip value = $0,10

Mini Account:
1 lot = 10.000 units
EUR/USD pip value = $1

Standard Account:
1 lot = 100.000 units
EUR/USD pip value = $10

EFX's EUR/USD pip value remains always $0,10.
  • #9
  • Mar 8, 2008 7:13pm Mar 8, 2008 7:13pm
Quoting hendrix
Thank you, parlenk.

My starting balance will be $4000. If I risk 3% ($120) and I have a 50 pip stop loss, I have to buy 2,4 lots of EUR/USD - is that right? (considering that EFX's 1 lot represents 10.000 units and EUR/USD 1 pip value is $0,10) This calculation would be true, if I'd wanted to simulate a micro account.

But what if I wanted to simulate a mini account? Should I then buy 24 lots? And for a standard account, I'd have to buy 240 lots?
the amount of lots is irrelavent, its abritrary and has no effect on your trade. the smallest position size is whats relavent, no matter what name you give it.

also, you should never be trading only 1 of the smallest unit your account will allow. if this is the case then you dont have the ability to scale your positions in fine enough increments when your account grows (or shrinks). example, you determine that 2% (a fairly standard risk) is equal to 100,000 base currency (one standard lot..heh) you make a good trade and increase your account equity by 10%, how do you take advantage of that increased equity? you cant because to move up to the next position size you'd have to trade 200,000 units base currency which puts you far beyond your 2% threshold. it'd be a far more efficient use of your capital to have an account in which you can trade 1000 base currency at a time, so next time you trade you can take advantage of your increased equity (yay compounding).
  • #10
  • Mar 9, 2008 11:40am Mar 9, 2008 11:40am
Quoting JDelphiki
It'd be a far more efficient use of your capital to have an account in which you can trade 1000 base currency at a time, so next time you trade you can take advantage of your increased equity (yay compounding).
Thanks for your reply. I've finally realized that too. And EFX will always let you trade by 1000 base currency. If my money management rules tell me to buy 2,4 lots, I buy 2,4 lots. I don't have to round down to 2 lots or round up to 3 lots. I love this concept!!! I just hope that EFX (or MB Trading now) never shut down their business!
  • #11
  • Mar 9, 2008 12:58pm Mar 9, 2008 12:58pm
When talking about risk in forex without using stops in the calculation 1 standard lot, which is 100 000 units. Then if efx want's to use their own names, whatever. Use the word 1 lot for 100 000 units because that is standard. Even though leverage depends on used margin it's usually calculated that 1 lot uses $1000 which makes $100 000 with 100:1 leverage, ( even if you dont use it ).
So if you start with $4000 and want a 2% risk.
4 lots is 100% risk.
4 minilots is 10% risk
8 microlots (8,000 units) is 2% risk.
  • #12
  • Mar 10, 2008 10:28am Mar 10, 2008 10:28am
Quoting SimonJ
When talking about risk in forex without using stops in the calculation 1 standard lot, which is 100 000 units. Then if efx want's to use their own names, whatever. Use the word 1 lot for 100 000 units because that is standard. Even though leverage depends on used margin it's usually calculated that 1 lot uses $1000 which makes $100 000 with 100:1 leverage, ( even if you dont use it ).
So if you start with $4000 and want a 2% risk.
4 lots is 100% risk.
4 minilots is 10% risk
8 microlots (8,000 units) is 2% risk.
what if the position i'm taking requires a stop at recent support on a weekly chart that is 1500 pips away? 1500 pip stop with 8 micro lots is significantly more than 2% risk on a 4k account. you must take both into account when determining what position size to use.
  • #13
  • Aug 29, 2017 7:15am Aug 29, 2017 7:15am
Technically, the lots are measured in units not dollars. However, the real implication is how it affects your position size and real (position) leverage. To illustrate, suppose you have a trade that you need a 50 pip stop-loss. If you only have $1000 dollars’ capital and you are using a mini account this corresponds to risking 5% (EUR/USD) of your capital on this trade. Which may be considered by many as risking too much if you are a beginner. Just go read as much as you can about money management and leverage to further understand this idea.
  • #14
  • Aug 29, 2017 8:51am Aug 29, 2017 8:51am
well back in 2008 yeah maybe, the minimum for many to be able to trade steady was 10k usd, now a days with technology its simply possible to start with way way less. yah basically stick to micro lots take is slow learn it, till you gradually make your way up. thats it..
  • #15
  • Sep 1, 2017 6:26am Sep 1, 2017 6:26am
Quoting faisal13
Technically, the lots are measured in units not dollars. However, the real implication is how it affects your position size and real (position) leverage. To illustrate, suppose you have a trade that you need a 50 pip stop-loss. If you only have $1000 dollars’ capital and you are using a mini account this corresponds to risking 5% (EUR/USD) of your capital on this trade. Which may be considered by many as risking too much if you are a beginner. Just go read as much as you can about money management and leverage to further understand this idea.
You are right! New traders need to use low-risk ratio. Since they are probably going to face so many losses in their initial trading! I seem, 1% is the perfect percentage for the new traders!
  • #16
  • Sep 15, 2017 5:53am Sep 15, 2017 5:53am
1% is more appropriate for the beginners. But practically it’s really difficult to keep consistence this percentage, because market moves at random mostly times. So we have to focus if the percentage ll not cross up to 5%.
  • #17
  • Sep 15, 2017 6:10am Sep 15, 2017 6:10am
5% contains huge risk that newcomers could not effort. They should minimize the risk percentage. According to me, 2-3% is perfect for them to ensure a comfortable trading life.
  • #18
  • Last Post: Sep 21, 2017 10:49am Sep 21, 2017 10:49am
Quoting JamesFaulkn
5% contains huge risk that newcomers could not effort. They should minimize the risk percentage. According to me, 2-3% is perfect for them to ensure a comfortable trading life.
You are right! High risk reward ratio is not applicable for the newbie! Even, I see pro traders are also using low risk reward ratio in their trading! By the way, I use only 1% risk in my per trade!
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