The Forex mini account is one of the best things to come along in years for the average trader. Being able to trade mini lots of currency allows the trader with a smaller account to trade within their means.
Until a few years ago, retail Forex traders had to trade in $100,000 lots. With the fierce competition between dealers these days for new traders, $10,000 mini lots are now an option.
There is No Downside to Trading a Forex Mini Account
Mini Forex trading accounts offer many advantages to you.
For example, say you wanted to trade a regular currency lot of $100,000. If your mini account has lot sizes that are 1/10th the size of regular lots, you could trade 10 mini lots.
This kind of position management allows you gradually scale out of a position, taking your profits a piece at at time, while still leaving some money in the trade to accumulate additional profits.
The same holds true if your trade is moving against you. You could close some of your mini lots to reduce the draw down, especially if you feel the trend is likely to turn back in your favor. In this case, the reduced position size still has profit potential, but you don't have to carry as much risk.
These smaller lot sizes are ideally suited to new traders, or those with accounts of $20,000 or smaller. The mini lots allow you average in and out of positions more smoothly, permitting greater profit potential.
The flexibility of a Forex mini account makes it much easier to trade within the 3% to 5% range of your account resources... something which is a "must do" as part of your overall risk management strategy.
