What is Mini ForEx Trading?
Mini Forex trading is quite simple to explain given the above information. In light of the information that is told to you above about retail forex trading in general, the use of a mini-account is exactly that! Rather than trading 1 whole lot each time (ie controlling 100,000 units of currency using only 1000 units of security or deposit to trade for a profit of about $10 per pip depending on the forex currency pair you and trading) you can use a mini-account (sometimes this is entirely indistinguishable from a standard lots account) to trade a fraction of a lot. This could technically be as little as 0.1 lot (ie $1 profit per pip) or half a lot – $5 profit per pip etc. This is the authors understanding of mini-forex-trading. In conclusion then, mini forex trading is explained away by understanding what a ‘lot’ is in forex. Once you understand that forex is traded in ‘lots’ and what ‘1 lot’ means to the investment banker/forex trader in the bank and to the retail investor using margin
Mini forex refers to the trade size, or face value, of a trade that you place. One standard contract refers to a trade size of $100 000 of the base currency. One mini forex contract on the other hand, is a face value of $10 000 of the base currency. That is, one tenth of a standard contract, hence the term mini. Most trading platforms refer to the face value that you’re trading rather than contracts. This is because you can be quite precise and say that you want a face value of $56 000 for example, if this trade size suits your risk management rules for the system that you’re trading. The term mini contract has been used by various forex providers to introduce the concept of forex trading for people who don’t have a huge float to trade with. However, just check if there are any fees for their mini contract, or for a trade size below a certain amount, called a minimum ticket fee.
