who are the brokers that offer micro-lot trading accounts?

I have heard that some brokers are now offering 10-cent-a-pip accounts (a mini-mini). Can anyone tell me who is offering that?
Thanks.

one of our preferred brokers offers that type of account... FX Solutions.

I know at Oanad you can choose whatever lot size you want. trade with fractions of a cent if you want.

Why would you trade on an account that small? Is it worth the time? Ten cents a pip!

Wow Merlin, FXsol is not on the preferred board yet kudos to your marketing dept. They are a class act and great customer service.
scott

Even someone who trades large amounts should be trading it in micros. You can do a much better job of fine tuning your position size with micros.

scott

Yup, I'm happy with them too.

InterbankFx offers 1-cent per pip, but there's been quite a few bugs lately. Maybe it's my PC.

i trade oanda for 2 weeks now and i like it so far

FXDD just started MT4 live which includes micro lots according to them. I am in the process of converting my current MT3 account to MT4. I just need a long trade to close and then I'll give them the go ahead to transfer.

I use Oanda.com, which provides a reasonable spread, a demo account which does not expire, and most importantly allows you to trade in any amount, down to a single dollar (meaning 1/100 of a penny per pip, ).

It makes sense to trade less than a dollar per pip until you can afford to lose $90 in three trades (30 pip s/l, $1 / pip, three bad trades) and keep going as though nothing had happened. (Your figures will vary accorkding to pair cvolatility, time of day and timescale of trade, and your style, or more particularly the stop-loss you want.)

So until you have $1000 - $5000 in your account, trades with lower risk make sense and let you test your strategies with real money, but not with amounts you can't afford to lose. If you want to bet on a currency pair rising, you can use a s/l of 100 pips and a t/p of 300, and by risking $0.10 per pip, you're only out ten bucks if you make the wrong call. Admittedly you are only up $30, but the point is that by not being forced into $10 or $1 per pip positions when starting out, you are a lot less likely to lose your whole balance on a small number of wrong moves before finding a strategy that suits you.

Micro lots offer precise money management. When starting off trading forex I would predict that many people would concentrate on looking for trading opportunities rather than assessing how much to risk. Because they have opened a demo account with a broker they dont really appreciate the importance of money management because they have a balance of $100K and just throw a few lots on here or there.
My advice to Newbies (and i would still consider myself one even after 1.5 years) is to only trade a demo account for a very short time to just become familiar with the interface of the platform. Then very soon after open a real money account using mirco pips. Obviously you wouldnt be depositing more than a few hundred bucks. But at least you get to experience the compeltely different feeling of trading real money rather than demo money and you'll soon realise the importance of strict money management.

Even if you loose your entire account, the amount you loss will pale in comparrison to the lessons you will have learnt about real life trading, emotions and MM. If you dont have a few hundred bucks to 'risk' on this education then maybe trading currency is not really a wise decision at all.

To learn how to trade real money without having to deal with emotions related to big losses and big wins. Increasing your exposure gradually lets you master your money management and the psychology of trading, without loosing much money in the process. In essence, for most of the newbie traders, your account will last longer. I think of it as something between a demo and live account.

Is it worth the time to trade a demo account? Yes, it is... It's a long learning process and the more time you spend learning, the better you are prepared to make the big bucks in a real live account.

Why would you trade on a large account while you are not sure if you are going to win?

Dane

A leasson im learning all too well. I started my account with $750, one decent trade put me up to $850. I tried that "decent" trade again the next day and lost $450. I was lucky to catch a breakout the next day and make back $220 of that $450 i lost and cought another trade for a quick $50 after that.

Since then i've been trading anywhere fron 1 cent per pip to .05 cents per pip. When a trade goes against me i don't get emotional or trigger happy about it, i just let it play out until it reaches my TP or SL. So far they've all reached my TP.

If anything the whole experiance has tought me the importance of money management

I guess I could buy the argument that you would want to start small and build up. I traded demo for about 6 months before I went live, and I started trading .1 lot ($1 per pip) and then built up. In my mind, if I made 500 pips in a month and I was trading micros or mini minis, a $50 reward would be like a slap in the face. I guess its all about how much you can lose and how much you want to make. What is the account minimum for such trading?

For the same reason you send out a point man in combat.

These small lots let you stay in the market at minimum risk. As price goes your way you can scale in by adding more fractions of a dollar positions or by adding 10 or even 100 dollar per pip positions. Very flexible. Also allows you to scale out.

Lou

Retail Forex Brokers

Retail forex brokers or market makers handle a minute fraction of the total volume of the foreign exchange market. According to CNN, one retail broker estimates retail volume at $25-50 billion daily, [2]which is about 2% of the whole market. CNN also quotes an official of the National Futures Association "Retail forex trading has increased dramatically over the past few years. Unfortunately, the amount of forex fraud has also increased dramatically."

All firms offering foreign exchange trading online are either market makers or facilitate the placing of trades with market makers.

In the retail forex industry market makers often have two separate trading desks- one that actually trades foreign exchange (which determines the firm's own net position in the market, serving as both a proprietary trading desk and a means of offsetting client trades on the interbank market) and one used for off-exchange trading with retail customers (called the "dealing desk" or "trading desk").

Many retail FX market makers claim to "offset" clients' trades on the interbank market (that is, with other larger market makers), e.g. after buying from the client, they sell to a bank. Nevertheless, the large majority of retail currency speculators are novices and who lose money [3], so that the market makers would be giving up large profits by offsetting. Offsetting does occur, but only when the market maker judges its clients' net position as being very risky.

The dealing desk operates much like the currency exchange counter at a bank. Interbank exchange rates, which are displayed at the dealing desk, are adjusted to incorporate spreads (so that the market maker will make a profit) before they are displayed to retail customers. Prices shown by the market maker do not neccesarily reflect interbank market rates. Arbitrage opportunities may exist, but retail market makers are efficient at removing arbitrageurs from their systems or limiting their trades.

A limited number of retail forex brokers offer consumers direct access to the interbank forex market. But most do not because of the limited number of clearing banks willing to process small orders. More importantly, the dealing desk model can be far more profitable, as a large portion of retail traders' losses are directly turned into market maker profits. While the income of a marketmaker that offsets trades or a broker that facilitates transactions is limited to transaction fees (commissions), dealing desk brokers can generate income in a variety of ways because they not only control the trading process, they also control pricing which they can skew at any time to maximize profits.

The rules of the game in trading FX are highly disadvantageous for retail speculators. Most retail speculators in FX lack trading experience and and capital (account minimums at some firms are as low as 250-500 USD). Large minimum position sizes, which on most retail platforms ranges from $10,000 to $100,000, force small traders to take imprudently large positions using extremely high leverage. Professional forex traders rarely use more than 10:1 leverage, yet many retail Forex firms default client accounts to 100:1 or even 200:1, without disclosing that this is highly unusual for currency traders. This drastically increases the risk of a margin call (which, if the speculator's trade is not offset, is pure profit for the market maker).

According to the Wall Street Journal (Currency Markets Draw Speculation, Fraud July 26, 2005) "Even people running the trading shops warn clients against trying to time the market. 'If 15% of day traders are profitable,' says Drew Niv, chief executive of FXCM, 'I'd be surprised.' " [4]

In the US, "it is unlawful to offer foreign currency futures and option contracts to retail customers unless the offeror is a regulated financial entity" according to the Commodity Futures Trading Commission [5]. Legitimate retail brokers serving traders in the U.S. are most often registered with the CFTC as "futures commission merchants" (FCMs) and are members of the National Futures Association (NFA). Potential clients can check the broker's FCM status at the NFA. Retail forex brokers are much less regulated than stock brokers and there is no protection similar to that from the Securities Investor Protection Corporation. The CFTC has noted an increase in forex scams [6].

Moe, thanks for posting the article on so many threads. There are tons of threads dealing with much the same topic-- so posting the same reply to them, certainly makes sense.

FXCM is on the preferred broker list. I would throw that preferred broker list down the toilet.

Hello All,

Would anyone care to mention recent experience with FXSolutions?

Thanks,