Forex Micro Accounts — Trade Small Lot Sizes with the Best FX Brokers

Not all traders are bestowed with sizeable capital to trade standard lots and hold substantial positions in the Forex market. In fact, most retail traders access the market with just a few hundred dollars or a few thousand dollars at most. It is also not uncommon for traders to try their hand at FX trading with a minuscule trading capital as low as $5. However, it is nearly impossible to place standard order lots with such a small amount of money, even with high leverage, which is where Forex micro accounts come in handy. This article will discuss Micro Forex trading, our most recommended Forex micro account brokers, and how to open a micro Forex account.

Best Forex Brokers for Micro Account

Broker Deposit* Leverage* Platforms Assets Regulation Visit
XM
5/5
Min. Deposit: $5 Max. Leverage: 1:1000 Trading Platforms:
  • MT4
  • MT5
Assets:
  • FX
  • Crypto
  • Stock
Regulation:
  • CySEC
  • ASIC
  • DFSA
Visit XM XM review
XTB
4.7/5
Min. Deposit: - Max. Leverage: 1:500 Trading Platforms:
  • xStation 5
  • xStation Mobile
Assets:
  • Forex
  • Indices
  • Commodities
  • Shares
  • Cryptocurrencies
Regulation:
  • FCA
  • CySEC
  • CNMV
Visit XTB XTB review
Eightcap
4.55/5
Min. Deposit: $100 Max. Leverage: 1:500 Trading Platforms:
  • MT4
  • MT5
Assets:
  • Forex
  • Indices
  • Commodities
  • Shares
  • Cryptocurrencies
Regulation:
  • ASIC
  • VFSC
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AvaTrade
4.4/5
Min. Deposit: $200 Max. Leverage: 1:400 Trading Platforms:
  • MT4
  • MT5
  • AVATrade Go
Assets:
  • Commodities
  • Options
  • Indices
Regulation:
  • CBI
  • CySec
  • ASIC
Visit AvaTrade AvaTrade review
eToro
4.25/5
Min. Deposit: from $50 Max. Leverage: 1:30 Trading Platforms:
  • eToro
  • Multi-Asset
Assets:
  • Commodities
  • Indices
  • ETFs
Regulation:
  • CySEC
  • FCA
  • ASIC
Visit eToro 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. eToro review
Pepperstone
4.1/5
Min. Deposit: $200 Max. Leverage: 1:500 Trading Platforms:
  • cTrader
  • MT4
  • MT5
Assets:
  • Indices
  • Crypto
  • Equities
Regulation:
  • FCA
  • ASIC
  • DFSA
Visit Pepperstone Pepperstone review
PrimeBit
3.95/5
Min. Deposit: - Max. Leverage: 1:200 Trading Platforms:
  • Proprietary web platform
  • PrimeBit platform
  • MetaTrader
Assets:
  • Crypto
  • Stocks
  • Indexes
  • Commodities
Regulation:
  • No Regulation
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Bubinga
3.8/5
Min. Deposit: $5 Max. Leverage: - Trading Platforms:
  • Proprietary web platform
Assets:
  • Forex
  • Commodities
  • Indices
  • Stocks
  • Cryptocurrencies
Regulation:
  • No Regulation
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What Is Micro Account in Forex?

Micro Account in Forex

To understand the concept of micro lot trading, we must first understand the meaning and significance of a standard lot. One standard lot in the FX market is equivalent to 100,000 units of the base currency. For example, when we specify trading 1 standard lot of the EUR/USD pair, we usually denote how much USD is available to buy or sell for 100,000 units of EUR at the current market price. Therefore, if the EUR/USD conversion rate is 1.10 in a hypothetical scenario, for every 100,000 units of EUR, we have to give 110,000 USD. Conversely, if we sell 100,000 EUR, we expect to receive 110,000 USD, spreads and commissions aside in both cases.

The same underlying formula applies for every currency pair in the market, the only difference being the exchange price and pip value. Because of constant fluctuations in price, owing to volatility and volume changes, traders find an incredible opportunity to speculate on price movements.

To trade 1 standard lot, traders will need to invest at least 100,000 units of the base currency, which is impossible for smaller retail traders. Of course, leverage can indeed help to a certain extent since a conventional leverage of 1:100 may bring down the margin requirement to 1,000 units of the base currency, but this is very risky. Even a small 100 pip move against the trader’s position can lead to a 100% loss.

To facilitate a more conducive trade environment for smaller retail traders, a handful of brokers offer the option of a Forex micro account, where 1 micro lot equates to just 1,000 units of the base currency. Therefore, orders can be placed at the market condition with just 1,000 units, while with a 1:100 leverage, traders can open a position with just 10 units of the base currency.

A few forex trading brokers even offer an insane leverage of 1:1,000, where micro Forex trading can be done with just 1 unit of the base currency. However, in this case, the risk is manifold as even a small 10 pip move can wipe out the entire account. Nevertheless, if we discount leverage, smaller traders are still at an advantage since they can place orders with a much smaller amount of trading capital.

The Essential Differences between Standard and Micro Forex Accounts

Standard Account Micro Account
Trading involves a standard lot, which is 100,000 units of the base currency. Trading involves a micro lot, which is just 1,000 units of the base currency.
This requires a higher initial deposit. The accounts are offered with the least initial investment requirements.
The smallest order size is 0.01 standard lots. The minimum order size is usually 0.1 micro lots, but some brokers may support order sizes as low as 0.01 micro lots.
The pip value is higher. The pip value is usually lower.
Profits and losses are less pronounced. Profits and losses are more substantial, with a higher probability for margin calls.
The use of leverage is usually limited, and traders may have to account for higher minimum margin requirements. This provides access to high leverage with very low margin requirements.
This offers access to ECN/STP accounts. Even some of the best Forex brokers for micro account may not offer ECN/STP for micro lot trading.
Standard accounts may provide tight spreads and commission-based trading. Micro lot accounts may not provide tighter spreads and commission-based trading, which can result in higher trading costs.

The Benefits of Forex Trading Micro Accounts

Trading the market with a Forex micro account has many benefits and advantages. Here is a list of pros:

  • The entry barrier to trading is reduced considerably. A few Forex micro account brokers allow their customers to place orders with as low as 0.1 micro lots, which, along with high leverage, helps traders increase their market exposure substantially.
  • Micro Forex trading with a small capital and reduced leverage is a great real-life alternative to demo trading since it includes all the emotions, real-time market conditions, and order execution policies of a real account. Therefore, traders can test their strategies at a much-reduced risk, even though there is a risk of loss.
  • It is an awesome opportunity to test trading strategies, evaluate a broker, and become familiar with a trading platform with low-to-moderate risk. It is natural for a small section of traders to question what is micro account in Forex, and they may be skeptical of its real-world implications. However, most professional traders manage a small micro Forex trading account or open a micro Forex account at a new broker to evaluate their trading performance and order execution policies.
  • Forex micro accounts are great for those who want to hedge their positions between intraday and scalping. At times, traders may like to hold on to their long-term positions while looking to make quick profits during short-term trends.

The Risks Associated with Micro Forex Trading

Forex micro account brokers may provide a great deal of flexibility to retail traders, but you should be aware of some of the major pitfalls of Forex micro accounts:

  • Forex micro account brokers may provide access to the smallest lot size and high leverage, but combining both is a recipe for disaster. Margin calls are frequent and common in accounts that use small lot sizes, resulting in larger losses than conventional standard lot accounts.
  • Traders may have unrealistic expectations of earning big money with a smaller initial investment. It is not uncommon for traders to chase big returns with modest capital, which forces errors in trading strategies and emotional judgment.
  • Since the amount of money is too low, traders may overtrade to compensate, which may lead to cumulative losses. The fear of missing out, leaving money on the table, and greed are some of the problems associated with these smaller lot trading accounts.
  • Traders may employ risky strategies and poor money management skills to trade with these smaller accounts, which usually leads to margin calls and account wipeouts. Smaller traders may be unable to earn profits or consistently withstand the drawdowns.

Is There Any Specific Requirement to Open a Micro Forex Account?

Requirement to open a Micro Forex Account

There are no specific requirements to open a micro Forex account per se aside from the usual requirements imposed by a broker. The account opening procedures are usually the same for both standard and micro accounts, with traders being offered the option to choose between a standard and micro account during the registration process. All other factors—such as account management, depositing funds, withdrawing funds, and account maintenance—are also usually the same.

Of course, there are a few differences in order execution policies, spreads, slippages, commissions, and liquidity since smaller lots are usually filled faster with minimal volume constraints through a market maker protocol. On the other hand, standard lot accounts may use ECN/STP bridges, where orders might be transferred to a liquidity pool. Make sure you understand all the inherent differences between both account types before trading with real money.

How to Find the Best Forex Brokers for Micro Account

All the brokers we recommended at the beginning of this article offer micro lot trading opportunities. However, you can browse through our detailed broker reviews for more options as we only recommend companies that offer the best FX platforms and excellent trading conditions. Our recommended brokers provide a comprehensive collection of trading accounts with unique features and numerous trading functionalities to offer some of the best trading conditions in the entire market. However, you should know what is micro account in Forex and be aware of all the risks of smaller lot size trading and high leverage.

FAQ

A cent account refers to the capabilities of an FX trading brokerage account that allow traders to place orders in decimal points. Micro lot accounts with high leverage and 0.01 micro lot trading options enable traders to trade in cents rather than full dollar figures. Therefore, yes, in most cases, a micro Forex account is the same as a cent account unless specified otherwise by the broker.
An account offered by a broker that facilitates trading in micro lots is known as a Forex Micro Account. The lot size starts from 0.1 micro lots, with 1 micro lot equating to 1,000 units of the base currency. This article provides a clear picture of different aspects of micro Forex trading and Forex micro account brokers, so we implore you to read through the entire guide for more information.
One micro lot equates to 1,000 units of the base currency. To give you a representative figure, 1 micro lot of the EUR/USD pair at a hypothetical exchange rate of 1.10 represents a purchasing power of 1,100 USD with 1,000 EUR. Subsequent lots are calculated in multiples of this value, which are calculated automatically by the trading platform.
The choice of financial instruments is usually limited for micro account holders, which is primarily due to the constraints in volumes and liquidity. Nevertheless, most brokers support all major currency pairs and a few minors and exotics. Some brokerages may also support metals, commodities, indices, and crypto, but there are only a few such options in the market.
Small lot size accounts usually provide high leverage with very low minimum margin requirements. It is not uncommon for these accounts to offer leverage up to 1:500. Still, some brokers take it a step further and may offer leverage up to 1:2,000. However, we always recommend that our readers use the absolute lowest leverage to prevent massive drawdowns or margin calls. You should find leverage that you are comfortable with and work well with your trading strategies.
Brokers usually advertise different account categories and allied features on the company’s official website. Some brokers even offer detailed comparisons of their different services and account categories so traders can choose a type of trading account that meets their specific requirements. Alternatively, you can refer to this article and keep checking in frequently as we make every attempt to recommend the latest and best Forex micro account brokers to our readers.

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