Trading Account Types: Pros & Cons

Trading Account Types: Pros & Cons

One of the first important decisions you need to make when becoming a trader—after choosing the right broker—is choosing the right type of trading account. It can be likened to buying a new car. If you need something that’s cost-effective and easy to use, then a Hummer is probably not the best choice. A learner in a Ferrari will likely crash in the first week, whereas starting conservatively with guidance from a professional can lead to a lifetime of opportunities.

Likewise, starting your trading career with the right type of account can make the first few weeks and months a much better learning experience. With support on hand to coach you on how to use the trading platforms and generally answer your questions, trading can quickly become an enjoyable and lasting financial opportunity… with the right account. Take a look at the trading accounts below and see which one fits your experience and financial goals.

The Cent trading account

If you’re thinking about trading as a hobby, or just want to start low and slow, the Cent trading account is definitely worth considering. Depending on where you live, you can open a Cent account for as little as $1. Subsequently, you can feel the thrill of the win and the challenge of avoiding losses, but most of all, you will learn a lot, very quickly.

Pros

  • Small initial investment
  • Unlimited leverage available
  • Zero trading commissions
  • Smaller lot size
  • 0% hedging margin

Cons

  • No demo account available
  • Only instant execution
  • No bonus
  • Limited to 5 account currencies

The Mini trading account

By far one of the most popular accounts in Exness, and for good reason. This mini trading account is also a very budget-friendly option that can be opened with just $1—depending on your location. As a result, the Mini account is ideal for beginners who wish to start trading part-time and then build up their trading experience before raising the bar and setting more significant profit goals.

Pros

  • Small investment
  • Unlimited leverage available
  • Zero trading commissions
  • 0% hedging margin
  • Bonus available

Cons

  • Limitations on the maximum volume and positions
  • Limitations on the number of pending orders

The Classic trading account

The Classic trading account is for traders who already know what they are doing. The trading conditions are set for maximizing the trader’s profit potential. This is made possible because of some of the lowest spreads around. Traders using the Classic account can also enjoy unlimited leverage—if they prove they have the knowledge and understanding to use it wisely.

Pros

  • Ability to use unlimited leverage
  • No trading commission
  • Low spreads from just 0.1
  • 0% hedging margin
  • No limitations on the number of trading orders

Cons

  • Highest initial deposit
  • Larger trading volume investments
  • No lotback bonus

The ECN trading account

The ECN trading account is somewhat different from the other three. Traders using an ECN account usually have solid experience trading the volatile side of the forex market and make larger investments with higher profit targets in mind. ECN traders generally look to make significant results through consistent trading. There are several advantages to an ECN account.

Pros

  • Zero spreads
  • Account and trading anonymity
  • No requotes
  • Setting pending orders within the spread

Cons

  • Larger initial deposit
  • Leverage capped at 1:200
  • Commissions on trades
  • 100% margin when offsetting positions
  • No bonus

Your first trading account

If you’re completely new to forex, then the very best trading account for you is probably the demo account. With Exness, the demo account is available immediately after you complete the short registration process. A demo account allows you to:

  • Get familiar with the trading software
  • Try trading risk-free
  • Practice money management
  • Test trading strategies

There are no notable cons to the demo account. It’s free to access, offers risk-free trading, and it accelerates the learning curve significantly. Just a few days of practical experience using the demo account can give your trading career an amazing headstart, and FX News highly recommends you try it while your market access application is being processed.

Remember, trading is similar to any new business or career advance in that it requires some time to research and practice. Indeed, just like sports, you must first pass the newbie stage before you can ‘go for gold’, so be patient, trade cautiously, and keep your financial goals realistic.

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This article is a marketing communication. It does not constitute investment advice or research. Its content represents the general views of our experts. It does not consider individual readers’ personal circumstances, investment experience, or current financial situation. This article is not prepared in accordance with legal requirements promoting independent investment research. Exness is not subject to any prohibition on dealing before the release of the article. Readers should consider the possibility that they may incur losses. Therefore, Exness is not liable for any losses incurred due to the use of its articles. Please note that past performance of an asset is not a reliable indicator of future results.