Forex Account Types. Which One to Choose?

Hello everyone. Beginners constantly send questions like: "Which Forex account should I open?", "What if I trade intraday?", "And which account is better to choose for an EA?" and so on. Let's clarify the differences between account types on Forex and in which situations each of them may be useful for you.

Standard (standard, classic) is the most common type of account. The minimum lot is 0.01, Stop Loss and Take Profit can be set both when opening a trade and after it. As a rule, such accounts have a fixed spread level, which makes it easier to calculate price targets. There may be execution delays in an active market. Suitable for trading on daily charts and non-aggressive intraday trading (timeframe not lower than hourly charts). It can also be used when working with trend-following Forex advisors (not scalpers).

ECN accounts. They are suitable first of all for intraday trading with frequent entries and short-lived trades. And also for scalping robots. The distinctive features of such an account are a lower spread than on standard accounts, but not a fixed one, and the presence of commissions per trade. For some reason many people are afraid of these commissions, although, considering the lower spread, the trader's costs per trade are approximately the same. On ECN and on a regular account alike.

It is also worth noting that ECN accounts have better execution than classic accounts, but there is slippage in an active market, as well as spread widening. This is worth paying attention to. In addition, you cannot set Take Profit and Stop Loss simultaneously with opening a trade, only after the order has been executed.

Swap-free accounts are accounts on which there is no swap (roughly speaking, a fee for carrying a position over to the next day). Swaps are so small and insignificant that a swap-free account will be a good choice only if you or your advisor keep positions open for many weeks. This type of account is distinguished by an additional commission for opening trades, compensating the broker for the absence of swaps.

Cent accounts are used most often for working with martingale EAs, as well as for testing Forex strategies in practice. Read more about cent accounts in this article.

Demo account. Virtual money, but everything is just like for real: the same charts, the same prices. You can even open two terminals at once: one with a real account, and the other with a demo account, and compare prices - everything will be identical. A demo account is needed first of all by beginner Forex traders in order to understand how to trade in the Forex market. To grasp the basics.

P.S. I hope this mini-FAQ will help you figure out which type of Forex account is worth opening and in which situations. Thank you for your attention.

Best regards, Pavel Vlasov
Tlap.io