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Currency trading is a risky but potentially profitable means of earning more money in addition to your regular income. There are many ways of going about it, but if you are a beginner to currency trading, I strongly suggest starting with what is called a mini forex account. You can open a mini account with a minimum investment as small as $250, and some brokers will even allow you to open an account with a $100 minimum investment. With a mini account, you will still enjoy many of the same privileges as a regular account holder. A mini account and a regular forex account differ in a few ways. A regular forex account trades in 100,000 units, while a mini account trades only a tenth of that size, or 10,000 units per lot. In other words the mini account deals in one tenth the size of the regular account. This allows you to risk a tenth of what you would be risking in the regular account. Mini account trading does involve engaging in marginal trading. That means that you are making use of leverage, or in other words, borrowing money to be able to perform a trade without having to invest the full amount required for a single lot. The investment that you pay for out of your own pocket is called a marginal lot. For a mini account, the marginal lot for every $10,000 lot is $50, which is a 200 to 1 leverage. On starting a mini account with a minimum of $250, you are trading five mini lots with your investment. This level of of leverage appears quite high compared to other forms of trading, like stock day trading that only applies leverage of 4 to 1, But don't let the numbers scare you. Because forex move in very small increments, known as pips, a 1 pip move in a mini contract is only worth (on average) about $1. This is why I recommend that traders get their feet wet with mini accounts, it allows you to gain experience and develop discipline without the fear of losing sizable amounts of money. No matter what market you plan to eventually trade, if you're new to trading check out what mini account have to offer.
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Ray Chong is a trader and educator who advocates simplicity and logic. Visit his website to discover a trading technique that people say is actually better than a stuff they've paid for - www.tradinggap.com
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