Forex trading, or foreign exchange trading, is the buying and selling of currencies in the global market. It allows individuals and businesses to profit from fluctuations in exchange rates. With Cent Accounts, traders can start trading with small amounts, making it ideal for beginners. It’s a great way to learn and gain experience in the Forex market.
Cent accounts are trading accounts in the foreign exchange market with balance measured in cents instead of the US dollars. Trading accounts dealing in cents are handled the same way as any US dollar account with the only difference being the nominal amounts. The Cent Account has been designed for small depositors and newcomers to the forex industry. It is most suitable for those who wish to trade with a lower deposit and grants access to the markets to all those who want to trade but cannot risk losing too much.
How does a cent account work?
A cent account works in the same way as a standard forex trading account, with the only difference being that the currency is traded in cents instead of dollars. Traders can open a cent account with a minimal deposit, usually ranging from $1 to $10, depending on the broker. The minimum trade size is also smaller, usually starting at 0.01 lots, which is equivalent to 1000 units of the base currency.
The leverage offered in a cent account is also lower than a standard account, usually ranging from 1:100 to 1:500. This means that the trader can control a larger amount of money than what they have deposited in their account. However, it is essential to remember that higher leverage also means higher risk.
To get started with a Cent Account, you need to choose a reliable Forex broker that offers this account type. Open an account, deposit a small amount of money, and you’re ready to trade! Familiarize yourself with the trading platform, learn about different currency pairs, and start placing trades with caution. Remember to always practice risk management and set realistic goals.
Considerations for Choosing a Cent Account
- When selecting a cent account, traders should consider:
- Regulation and Security
- Trading Conditions
- Account Types
- Customer Support
These factors play a crucial role in ensuring a positive trading experience.
Main elements:
Exness: minimum deposit of $1
Vantage: minimum deposit of $50
RoboForex: minimum deposit of $10
FBS: minimum deposit of $1
FXTM: minimum deposit of $10
1. Exness :
Exness offers trading via Metatrader 4 and 5 and allows you to trade across devices. The cent account in this broker starts with a minimum deposit as low as $1. One of the main reasons for the popularity of this broker is instant payment. It does not take more than a minute to withdraw funds from the trading account.
Moreover, Exness gives no additional charges or commission fees in their cent account. However, you can be charged spread in the same amount as the other trading account types. The leverage in their cent account is also the same compared to the other accounts. It can be concluded that the main difference between their cent account and other account is only that the profit and loss will be directly calculated in cents instead of dollars.
check our previous blog :
How to open a cent account with an Exness broker under ForexTrade1 IB?
2. Vantage
Vantage is considered Highly Trusted, with an overall Trust Score of 90 out of 99. Vantage is not publicly traded and does not operate a bank. Vantage is authorised by two Tier-1 regulators (Highly Trusted), one Tier-2 regulator (Trusted), zero Tier-3 regulators (Average Risk), and two Tier-4 regulators (High Risk).
MetaTrader Raw ECN account: $3.00 commission per lot per trade plus spread cost. 0.1 pips is the average spread cost during peak trading hours. MetaTrader Raw ECN account: $3.00 commission per lot per trade plus spread cost.
Vantage’s standard Forex leverage starts at 100:1. The maximum Forex leverage Vantage may offer is up to 500:1. This is only for approved accounts and funds approved for leverage greater than 100:1 will be limited.
The minimum withdrawal amount is $100, or all your available account balance (whichever is lower). You can withdraw a maximum of $25,000 per transaction if you are withdrawing via bank transfer or debit card. Wire transfers have no restriction on transaction size.
3. RoboForex
RoboForex was founded in 2009 and has gained popularity ever since. It reaches clients across 169 countries and supports 19 languages. The company behind the RoboForex brand offers a cent account called Pro-Cent account that is intended for new traders.
The minimum deposit is one-tenth of the traditional minimum or equal to $10. Traders can deposit though various methods, including Bitcoin deposits and Qiwi. While the maximum leverage is set at 1:2000, not too different from the leverage in other account types. The EUR/USD spread is averaging at 1.2 pips, and no extra commissions are charged in the RoboForex cent account.
4. FBS
FBS has been in existence since 2009 and is regulated by the CySEC and the IFSC Belize. FBS provides a cent account service with the minimum deposit of $1 and floating spreads starting from 1 pip. Besides, FBS doesn’t charge any additional fees.
The leverage for the FBS cent account can reach up to 1:1000, and you can open up to 200 orders at once. At the same time, the order volume itself ranges from 0.01 to 1000 cent lots. This means new traders who use expert advisors can try using this account because it operates in a highly competitive condition.
5. FXTM
FXTM is one of the top brokers under strict regulations of the FCA that offers various trading platforms, including Metatrader 4 and Metatrader 5. The FXTM cent account is presented with instant execution and does not allow scalping. The cent account has a low minimum deposit of $10 and no maximum limit.
The smallest trade size is 0.01 lot, but because the account is calculated in cents, this one micro lot is actually worth 0.0001 standard lots. The maximum trade size per trade is 100 cent lots, and the maximum number of orders is set at 300, with a total maximum order size of 10 lots.
There are no additional commissions charged on the FXTM cent account. However, the minimum spread in the cent account is the highest among other accounts offered by FXTM, which is 1.5 pips for EUR/USD under normal market conditions.
Pros :
Getting opportunity to decrease the minimum available position size to 0.0001 of a standard lot is the biggest advantage of a cent account. While such brokers as OANDA make it possible to trade with 0.00001 lot (1 currency unit) with their proprietary platforms, getting below the 0.01 lot size is impossible in MetaTrader platform without resorting to using a cent account. Other advantages are derived from this one:
- Flexibility in employed position sizing techniques.
- Reduced risk when starting out with a new broker.
- Appeal to the poorer traders who cannot afford to hold a non-cent account.
- Testing strategies and trading robots no longer requires reduction of the nominal position size. It is also possible to test expert advisors where such adjustment isn’t possible at all.
Mechanics of cent accounts
Trading accounts denominated in cents are handled the same way as normal USD or EUR accounts. The only difference is that upon depositing or withdrawing, the account holder pays or receives 100 times less money than usually. When trading on a cent account, 1 standard lot’s size, which is normally 100,000 currency units, becomes just 10,000 units. Respectively, the effective profit or loss from a 1 lot trade is also reduced proportionally. The margin requirements are also lower for 1 standard lot in cents than for 1 standard lot in a normal USD account. However, that difference is not seen when a trader is operating the account. Actually, there is almost no way to tell the difference between a cent and USD account from within the trading platform. For example, in the following EXNESS cent account view, the only sign of it not being a dollar account is the displayed balance currency — USC instead of USD — other information looks the same as if it were a $100 live Forex account:
With a normal USD account, a trader is limited to 0.01 standard lot as the absolute minimum trade size in MetaTrader platform (MT4 and MT5 are the same in this regard for Forex instruments, but MT5 allows smaller position sizes in cryptocurrency trading). Consequently, a trader can operate with as little as 0.0001 standard lot in a cent account, which otherwise would be impossible in MetaTrader. The following two screenshots illustrate the limitation. Notice that the Buy and Sell buttons are active when 0.01 size is selected:
Switching the order volume to 0.001 disables the Buy and Sell buttons:
In both cases, it is a cent account. The first screenshot implies a 0.01 cent lot position, which is the same as 0.0001 standard lot position. The second one tries to go down to 0.00001 of a standard lot, which is the smallest tradable amount in the current retail Forex market — 1 unit of currency. Unfortunately, it is still off limits even for cent MetaTrader accounts.
Also check USD vs USC
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