Through a cent account, you may start live trading with low investment. All it takes is 10 US dollars. Here is how the scheme works in South Africa.
How to Start Trading Forex with $10
Today, over 15 million people participate in online trading. International brokers are tailoring their services to South Africa, offering a wide range of investment options. The region is seeing a boom in digital trades, and entry to the market is affordable. Access may cost as little as $10. Here is an overview of the most affordable option.
Low-deposit trading is important, as it enables a gradual transition to large volumes. Rookies with experience in the simulation mode can start live trading with moderate risk. This special arrangement requires a minimum deposit of just 10 US dollars. The scheme is known as a ‘cent account’.
Characteristics of Cent Accounts
The system differs from other account types, although the structure is similar. Most commonly, cent accounts are opened in US cents, Euro cents, or GBP Pence. There are also regional options. For instance, residents of Nigeria may trade through cent accounts denominated in the Nigerian kobo. A deposit of NGN 2000 is enough to unlock full features of the trading terminal. In addition to low deposit requirements, the scheme has special parameters for:
- allowed number and volume of orders;
- range of trading instruments;
- spreads;
- leverage conditions.
Exact requirements and opportunities vary from broker to broker. Generally, this is the most affordable option for live trading. With only $10, a user may start working on MetaTrader 5 platform, the most popular environment for digital trades. So, how did the concept of cent trading appear?
The Emergence of Cent Accounts
The scheme was devised over a decade ago — in 2006. Back then, LiteForex became the trailblazer, as it launched the cent account for development purposes. Gradually, the principle transitioned to live trading. It quickly gained traction and was accepted by brokers around the world. Today, cent accounts are offered by most leading intermediaries.
The scheme makes real trading accessible to anyone. It also brings undeniable benefits to novices. Inexperienced traders have an opportunity to practice in the live mode without risking too much of their money. Thus, it is an intermediate link between training and high-volume trades. Users who feel confident managing positions in the simulated mode are still advised to increase the volume gradually.
It is possible to open a position equal to 0.01 of a standard lot. In addition to low investment and risks, a cent account with FXTM psyches you up for the real game. As your balance is denominated in cents, you get used to seeing four- or five-digit amounts.
A Convenient Start
Now, aspiring traders do not need sizeable capital to access the global market. Consistent profits on the currency exchange require persistence and constant learning. As clients gain experience, they may switch to other, more advanced accounts. 10 US dollars are a price affordable for anyone. However, this does not mean your trades will be limited to the initial amount.
Trading on Margin
Even cent accounts include opportunities for leverage. This may reach spectacular ratios (1:1000). It means that USD 10 unlocks trading for USD 10,000. Trading on margin boosts potential returns, but it should be used thoughtfully.
Ratios vary depending on clients’ knowledge and experience. The general range is between 1:25 and 1:1000. Trading on margin increases your buying power, but higher profits are always connected to higher potential risks. However, given the modest size of the deposit, losses are still minimized. A failed trade will not cause you to lose more than you invested.
Start with Demo
Despite low risks, cent accounts are no substitute for the demo mode. Every user should take their time practising in the simulated environment. Live trading may only be started after the learning phase. Demo accounts are simple to create, and they work on both versions of the MetaTrader terminal.
Word of Caution
Cent accounts have a few minor drawbacks. First, the brokerage may offer looser spreads, and limit the maximum trading amount. The size of positions may also be restricted. Still, the pros outweigh the cons for anyone interested in affordable live trading. The target audience for the scheme includes rookies and users with limited funds. For them, it is the perfect gateway to global markets. Online trading gives everyone a chance to profit from market trends. Now, it is more accessible than ever.
