Don’t you know how to start real trading with minimal spendings? It’s simple – open a cent account and start trading on the Forex market with a small deposit. If you are tired of practicing on a demo account and not getting anything in return, it’s time to find out what the cent account is and how to trade on it.
What is a cent account and why is it needed?
The Forex cent account is a trading account on which the balance is displayed in cents, not dollars, and transactions are carried out in cents as well. If you deposit your account with $ 20, then you will see the balance of 2000 $ cents in the terminal.
The cent account gives an opportunity to practice in trading with real money. The risks are minimal, as the profits and losses are calculated in cents. That is, risks are reduced by hundred times ($1 = ¢100).
Let’s consider an example. A trader used the cent account to open a buy order of EUR/USD at the price of 1.0510, with a volume of 0.1 lot. The trader expected that the price would rise, and he would close the deal in profit. But the price began to fall, the transaction went into the negative, the trader decided to close it. At the time of the transaction closing, the EUR/USD price was 1.0495, i.e. it dropped by 15 pips. Thus, the trader lost 15 cents. If the trader opened exactly the same deal, but on a standard account, its loss would be 15 dollars, not cents. That is, the loss would be 100 times greater.
To get more information about how to open the transaction, read the article “6 Ways to Open a Market Order in MetaTrader 4”.
Why do brokers provide cent accounts? Obviously, cent deposits and transactions are not financially interesting for a broker. But in such a way brokers attract more clients. Newcomers, who changed a demo account on a cent one, are potential large clients. After a successful trading on the cent account traders are switching to the standard account to earn more profits.
If you want to get to know the information about the trading terms on cent and other types of accounts of JustForex broker, follow this link: justforex.com/trading-terms.
Cent accounts advantages
Cent accounts make it possible to carry on real trading on the Forex market with minimal costs. You learn to manage your finances as well.
On cent accounts, you are able to estimate in practice broker’s conditions and integrity.
Cent accounts disadvantages
Fear of the loss disappears. Wastes on the cent account are tiny, so the deposit loss is not scary. But still, aspire to gain more profits than losses even on the cent account.
Due to the fact that the account is in cents, profit is small. Many traders dream of gaining $1,000, depositing the cent account only with $10. But let’s face it, it is hardly possible.
Train on cent accounts, earn your first real profit and get involved in Forex. JustForex team wishes good luck in trading!