This is something I’ve been wanting to write and share about for a long time but it’s only now that I’ve brought myself to share and I wonder why. Oh well …
A lot of newbie traders are told each day on the web via advertising that forex is the fastest track to wealth (and I’m not denying that to be true … but that’s only for the elite few). And the people that are responsible for getting this message out are the scammers and some of the forex brokers out there unfortunately. Here’s the thing though, forex is extremely lucrative for these fx brokers.
Wanna know why?
Because … they strive to get lots of new people hooked up and get started with forex trading via mini accounts. Mini fx accounts offer crazy leverage and allow one to get started with live forex trading for either $250 or $300 (which is a measly sum for most).
With such a low amount, it is much more easy for someone who wants to get started to actually get started doing so.
With mini accounts, each pip you make or lose results in a dollar gained or a dollar lost. Now think about for a sec, with just $250 or $300 in your mini account, just how many pips can you afford to lose before you wipe your account dry?
Yep, it’s either 250 or 300 which isn’t a lot actually when you think about it. If you lose 25 pips for each bad trade, it takes you just 10 trades to clean up your account. Bad odds for you, great profits for the broker.
Bottom line … Mini account = Fast Track To Failure