Choosing the best forex broker is not an easy task. There are different types of traders depending on their trading needs. As such, the type of trading accounts you are using in trading is very important.
When you open an account with any broker, you will be asked to choose which type of trading account you are going to use. This decision is very important because it affects how you invest your money, what currencies you are going to trade and which currency pairs you are going to focus on.
Here are the different types of forex accounts you are going to find:
SQ: Spreads Opening Account
SQ stands for “spreads on buy”. This is the most common type of trading account. The traders who use this account buy currencies on the cheap and make a profit from the spread the broker provides them. It is true that the profits made by traders using this account are low, but it does provide you with the best flexibility.
You can use any trading platform as long as the broker accepts spreads. You can also choose to only trade a select set of currency pairs.
TC: Trust Center
The traders who use the TC trading account have money they want to put in the market but they do not want to get involved in the trading. They choose to invest their money in financial instruments such as bonds and shares. It is an investment account that is used by traders who have enough capital to invest, but not much.
SP: Special Purpose
This type of forex trading account is opened for traders who are planning to trade extremely liquid currencies. Traders who use this account will trade only the most liquid currencies and only after they have gained a lot of experience they will start to add other pairs.
XB: Extra Basic
This type of forex trading account is meant for beginners who have less than $10,000 to invest and are open to risks. These traders are open to minimal risk in exchange for the large potential profits.
These types of accounts are very flexible and allows the traders to choose which pairs they are willing to trade and in what amounts. With this flexibility, it allows the traders to increase their chances of getting good trades and is a good tool in helping the traders choose the right forex brokers for their needs.
The benefits of the different types of forex accounts is that they are open to many other investment avenues. With that in mind, the investors can also make the best choices when trading on the forex market. They are also aware of what they invest in, so there is less risk of losing money or over trading. The account helps to provide other types of sources of income.
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