Money Open a cent account: what is it and how does it work?


siteadmin

Administrator
A cent account is a type of trading account that not only displays the account balance in cents but also conducts transactions using cents as the unit of currency. It indicates that if you deposit ten dollars, you will have one dollar and one hundred cents in your account.

Trading on the Cent account carries a relatively modest level of risk. As a result, it is an ideal choice for those who are just beginning their Forex careers.

In addition, experienced traders who are interested in testing out new trading techniques may find this type of account to be an appealing choice.

People can trade smaller lot sizes using the Cent account, and opening an account with forex cent account brokers requires a lesser initial investment than opening any other account.

Characteristics of a cent account​


Maximum orders​

The maximum number of open positions that a standard account can hold varies amongst different brokers.

In contrast, the maximum number of positions that can be held with forex cent account brokers is normally set at fifty, while a standard account can hold approximately one hundred. This is the maximum number of orders that can be opened in a single account at the same time.

Trade volume​

You will have access to a minimum trading volume of 0.01 lots if you have a cent account. This is the same as 0.0001 lots, which is equal to $10. This minimum trading volume of 0.01 lots is equivalent to $1000 for a basic account because it is the lowest possible volume.

Profit margin​

In comparison to a standard account, a cent account has an exceedingly limited capacity for both trading volume and position holding, hence it stands to reason that the opportunity for profit in such little account is also limited.

Due to the fact that you are unable to open as many agreements with Big Lots, you will find that it is more difficult to produce a sufficient profit in a cent account.




Pros of using a cent account​

You might be confused about the use of a cent account at first, especially if you've never used one before. When all is said and done, there are a surprising number of advantages to it. The following is a list of some of the benefits of having a cent account:

  • Because of the low volume of trades, it is easy to get started.
  • Helps you become accustomed to dealing with numbers with a big number of digits.
  • Reduces the risk of incurring losses as a result of restrictions placed on trading volumes and the quantity of orders

You might also be interested in: Forex trading brokers in Kenya

Cons of using a cent account​

There is a lot that goes into a cent account, despite the fact that it may appear to be the same as an ordinary standard account with simply more zeros. The following is a list of some of its drawbacks:

  • Reduces the opportunity for making a profit as a result of the reduced batch sizes.
  • Reduces the chance for making a profit as a result of placing fewer maximum orders.
  • After getting used to seeing all the extra zeros in your account balance, switching to a conventional account can be difficult.

Related Posts: Forex education: 5 tips to help you become a trading guru
 
Top