FXCM - What's now?
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
- Open FXCM Mini account
- Trading Condition of Mini Account Type
- Develop a Disciplined Trading Strategy
- Start Small and Build Up Confidence
- Ideal for Accounts under $10,000
- FAQs about FXCM’s Mini Account
Open FXCM Mini account
The FXCM Mini account was designed for those who are new to the FX market.
The Mini account trades in smaller contract sizes of 10,000 units, 1/10th the size of the standard account.
The smaller trade size gives traders the opportunity to trade live with less overall risk or exposure to the market.
In addition, the Mini account allows traders to become familiar with FXCM, more specifically the quality and reliability of FXCM dealing practices and the stability of the FX Trading Station.
Who should use Mini account type?
- New FX Traders transitioning from stocks or futures
- Account Balances with less then $10,000
- Traders wanting to test out FXCM Execution and services
- Experienced traders looking to fine tune trading approach
- Traders Wanting Free Access to FXCM Trade Ideas
FXCM is a partner of ZuluTrade, a copy trading platform provider.
By opening an account with ZuluTrade, you can copy trades of professional traders directly to your FXCM account.
Trading Condition of FXCM Mini Account Type
The FXCM Mini trading account uses the same state-of-the-art trading platform as the regular trading account.
There is no additional software to download.
- Account Size
- The minimum amount that is required to open a FXCM Mini trading account is $300. Of course, due to the high leverage and the extremely volatile nature of the Forex market, the recommended minimum investment size is $2,000.
- Trade Size
- On the FXCM Mini trading platform all trades are executed in standard sizes of 10,000 base currency per one lot. There is no maximum trading volume on the FXCM Mini trading platform.
- Pip/Tick Value
- Profit and loss is easy to calculate when trading on the FXCM Mini platform. In the EUR/USD and many other currency pairs, a one pip (or tick) movement in the exchange rate is equal to a one-dollar gain or loss in the account value per lot (and approximately $1 in the 17 other currency pairs).
- On spreads on the major currencies are the same as a standard account. All spreads are fixed intra-day and night.
- Margin Requirement
- Up to 200:1 Leverage. Clients must have approximately 1/2% of the value of the positions they hold in their account for each lot of currency being traded (approximately 200:1 leverage). This equates to $50 per lot (10,000 units). This amount does not change after 5:00 PM New York time, which is the rollover cut off, but stays constant at approximately 1/2% per lot the entire day and overnight.
- Guaranteed Limited Risk
- There is also an important safety feature embedded in this system that prevents clients from losing more money than they have in the account. Should the account equity — meaning the total floating value of the account — fall below the margin requirement of approximately 1/2% per lot, the dealing desk will close all positions.
For more information about the trading conditions of FXCM, please go to FXCM Official Website.
Develop a Disciplined Trading Strategy
Ask any successful trader and they will tell you that the key to trading success is discipline.
Everyone has heard the expression “cut your losses and let your profits run” yet how many traders actually practice this?
Many traders will hold on to losses hoping it will reverse eventually, only to see the loss get progressively larger.
These “irrational” trading decisions are based on emotional reactions to fluctuating profits and losses, a common pitfall for new traders.
Losses can AND WILL occur. A trader’s ability to limit his losses is just as important (or even more important) than determining entry points.
Because the pip value on the Mini Account is just $1 per pip, traders can focus on developing a disciplined trading strategy, basing decisions on pip movement and market conditions NOT P/L.
Consider the Following Example: When trading a FXCM Mini account, a 30-pip floating loss is approximately $30. That same 30 –pip move against you on the 100K account now becomes a $300 floating loss.
By starting with a Mini account- a trader loses only a small amount on every losing transaction making it easier to stick to a disciplined trading strategy.
Generating larger losses on the 100K account can be detrimental to new traders as the temptation to hold on to the loss is much greater based on the size of the loss.
Start Small and Build Up Confidence
There is NO MAXIMUM trade volume on the FXCM Mini account.
Although the standard trade size is 10,000 units – you are not limited to trading one lot! For instance, you can trade 10,000 units, 50,000 units or 150,000 units.
This means as you become more seasoned and build up confidence you can slowly increase the size of your positions to maximize your potential.
In fact the trade size of 10,000 units allows for more flexibility in terms of customizing the size of your trade.
The ability to customize the size of the trade enables better risk management.
Ideal for Accounts under $10,000
FXCM recommends that all traders with account balances less than $10,000 trade a Mini account.
This gives you more staying power in the market, and the ability to take advantage of multiple opportunities without over-leveraging your account.
If you over-leverage your account you will not give yourself room for error.
Even if you are correct on the direction of the market, minor fluctuations can generate a margin call and liquidate a good position.
Due to the over-the-counter nature of the FX market, execution varies depending upon the firm you trade with.
FXCM has the reputation of providing one of the highest qualities of execution and service in the FX industry.
When you trade FX online with FXCM you receive:
- An intuitive and user-friendly trading software
- Rapid execution from live, streaming prices
- Fixed spreads intra-day and night
- Guaranteed fills on stops/limits
FAQs about FXCM’s Mini Account
1. How can FXCM offer smaller trading sizes?
Smaller trade sizes pose several challenges to foreign exchange firms.
There are two primary issues that have prevented firms from offering smaller trade sizes: high labor costs and risk management.
To offer smaller trade sizes, most firms would have to hire more dealers, which would make the cost exorbitant.
The FXCM Mini account features automatic execution for most accounts.
All trades are executed without human intervention (just like a demo account).
This keeps labor costs low. The second issue is risk management.
The smaller size trades offered on the FXCM Mini account are difficult to offset in the broader market.
FXCM has developed a proprietary risk protocol for the FXCM Mini, which involves aggregating volume into sizes that can be offset in the broader market.
2. What is the difference between the FXCM Mini account and a regular account?
The FXCM Mini account is designed to introduce traders to the excitement of trading currencies online and for those with limited investment capital.
With a Mini account, you trade using the same platform as FXCM’s regular traders.
With as little as $300, a trader can open a FXCM Mini account and begin trading foreign exchange with FXCM.
On the Mini trading platform all trades are executed in standard sizes of 10,000 base currency per one lot, 1/10th the size of a regular account.
The smaller trade sizes enable traders to take smaller size risks.
3. How does the Margin Call work?
If the equity balance in your account falls below the margin requirement of 1/2% per lot, a margin call will be generated.
In the event that an account exceeds its maximum allowable leverage, ALL open positions will be liquidated immediately, regardless of the size or the nature of positions held within the account.
For example, a FXCM Mini account with 8 lots in open positions would need to have 1/2% of the total position value in account equity.
If the account equity falls below 1/2% of the position value due to floating trading losses, the entire 8 lots would be liquidated at market price.
Clients are not notified prior to the liquidation of their positions.
4. Do you Charge a Commission on the Mini account?
No. FXCM charges no commission or transaction fees to trade an FXCM Mini account.
As the leading player in online currency trading, FXCM receives and is able to pass on the benefits of size to the clients.
FXCM is compensated for its services through the bid-ask spread.
5. How Do I Switch from a Regular Account to a Mini account?
In order to change from a regular account to a Mini account, or a Mini account to a Regular Account, you can request a change of account type through MYFXCM.