One of the main differentiators between traders in any sector is the value of their investment portfolios. Professional investors are comfortable with six-figure trades while regular amateur investors may fret about a $100 one. Most forex trading companies cater to a wide spectrum of traders and offer them a range of account types to suit.
Why the difference?
The international forex market is deregulated and this allows anyone with the investment capital – no matter how large or small – to participate. From the brokers’ perspective, every client with a trading account enlarges their total capital. This is a huge positive because it lets smaller brokers to trade on par with their larger rivals in the market.
From the point of view of the forex investor, this tiered system gives them the option to choose between trade volume and additional trade assistance features. Opting for a forex account with a lower ceiling hold the advantage of less pressure to meet trade volume and value requirements. For serious investors, high-ceiling accounts come with features, support and insight that helps them get greater returns on their investments.
What is the difference?
There are essentially three different grades of forex trading accounts – basic or micro, intermediate, and premium or professional.
Basic account
A basic account is meant for the novice and/or casual investor. It may be limited to a cap of just a few hundred dollars and individual trades may be as small as $50 or even $20. These micro-transactions add little value to the broker and such accounts usually do not come with additional features or benefits.
Intermediate account
Commonly termed a ‘Gold’ or ‘Classic’ account, intermediate accounts are the most common active accounts but vary greatly from company to company. They range in value from a few thousand dollars to tens of thousands of dollars. These were standard entry-level forex accounts until the recent introduction of micro accounts.
VIP account
Meant for high-rollers, VIP accounts come with few restrictions and plenty of bonus features like attractive rates and low spreads. The trade-off is that they usually begin at the $250,000 mark.
Visit ForexTB to see which of their 4 tiers you qualify for.