Stock Trading Accounts - Stock Accounts Types Explained - Stock Trading Account Meaning
3 Types of Stock Accounts - Standard Stock Trading Account, Mini Stock Trading Account and Micro Stock Trading Account - Stock Trading Accounts Examples
In recent years retail stock trading has grown hugely in popularity and the demand for different types of Stock trading accounts has grown. There are many different stock trading account types available to any stock trader who wants to invest in the online stock trading market - Stock Trading Account Meaning.
The Stock trading market is a highly stock trading leveraged market for speculating on stock trading instrument valuations. Stock traders can purchase large amounts of stock trading units using leverage - Stock Trading Leverage is what makes Stock trading attractive to many online stock traders - with stock trading leverage a stock trader can make more profits or losses because they use less of their capital and borrow the rest.
There are different types of stock trading accounts available to help investors better manage their stock trading account capital as well as their stock trading trade transactions.
How a Real Stock Trading Account Looks Like
It is therefore important that the stock traders consider what they want to get out of their stock trading, before deciding on the Stock trading account type to open.
Below is a comparison of the three types of stock trading accounts commonly used to trade stock. The stock trading account types review below explains the different features of each of the three types of stock trading accounts.
1. Standard Stock Trading Accounts Explained - Standard Stock Trading Accounts Types Explained
Stock Trading Account Meaning - Standard Stock Account. A Standard Stock Account is denominated in US Dollars and stock trading trade transactions are placed using standard lots. One lot is also known as a one contract. Minimum opening capital - at least $10,000 USD.
1 contract refers to the minimum size of a single stock trading trade transaction. This stock trading account option is the most suitable for stock traders with enough capital to invest in stock trading - this stock trading account option requires $10,000 to $50,000 dollars in starting capital, For this standard stock trading account the stock trader will not be undercapitalized and with good stock trading money management rules and stock trading money management strategies, this standard stock trading account option has the best chance for profitability because it is not undercapitalized. Under capitalization is what makes most stock traders in stock trading not profitable.
It is not recommended to open a standard stock trading account unless you have an account balance of at between $10,000 minimum and $50,000.
Professional Money Managers recommend $50,000 Dollars minimum to open this standard stock trading account and only opening trades with only 2% of the trading capital you have in your stock trading account. However, most online stock trading brokers will still open this standard stock trading account for you if you have more than $10,000.
With stock trading leverage of 100:1, you will borrow from your stock trading broker (with stock trading leverage of 100:1, your stock trading broker gives you $100 dollars for every $1 dollar that you have in your stock trading account, therefore if you have $1,000, the stock trading broker will give you $100 dollars of stock trading leverage for every $1 dollar you have, meaning after stock trading leverage you will have $1,000*100=$100,000 which you can then use to trade stock).
2. Mini Stock Trading Account Explained - Mini Stock Trading Accounts Types Explained
Stock Trading Account Meaning - Mini Stock Trading Account. A Mini Stock Trading Account is a stock trading account that allows stock traders to make trades using stock trading mini lots. A stock trading mini lot is equivalent one-tenth that of a stock trading standard lot. Stock trading brokers offer stock trading mini lots as a way to attract stock traders who do not have a lot of capital - as the minimum required capital for starting stock trading with a mini stock trading account is about $1,000 USD
Mini lots are similar to standard lots; however, mini lots are traded in lots equivalent to one-tenth that of a stock trading standard lot. This lowers the initial deposit required to open a mini stock trading account and offers better risk management for stock traders without a lot of stock trading capital.
This mini stock trading account is recommended for those stock traders with only a few thousand dollars as stock trading capital.
A mini stock trading account is suitable for stock trading account equity balances between $5,000 and $10,000. The stock trading trade transaction lots are smaller so the stock traders without enough capital to open stock trading standard lots have better stock trading money management for their stock trading account equity balance.
3. Micro Stock Trading Account Explained - Micro Stock Trading Accounts Types Explained
Stock Trading Account Meaning - Micro Stock Trading Account. Micro Stock Trading Accounts use lot sizes of only equivalent one-hundredth that of a stock trading standard lot. These Micro stock trading accounts are often appropriate for stock traders without a lot of stock trading capital and can sometimes be opened with only a $100 minimum balance.
This Micro stock trading account option allows the stock trader to open trades in micro lots. 1 stock trading micro lot is one-tenth of a stock trading mini lot and one-hundredth of a stock trading standard lot.
This Micro stock trading account option is generally best suited for stock trading account equity balances that are between $1,000 and $5,000
In Stock trading, one stock trading standard lot is the standard transaction minimum of a given stock trading instrument traded in the stock trading market. But many stock trading brokers offer fractions of this stock trading standard lot to enable more retail stock traders to access the stock trading market. Being able to offer stock trading mini lots and stock trading micro lots reduces the minimum stock trading trade transaction size thus giving the stock trading beginner traders and also those stock traders without a lot of stock trading capital to start trading and get a feel of the stock trading market without investing a lot of stock trading capital.
There is learn stock trading online tutorials that a stock trader can read even before opening a real stock trading account, and to get extra practice in stock trading before opening a real stock trading account a beginner stock trader should open a practice Stock demo trading practice account with a stock trading broker - so as to practice placing stock trading trade transactions before opening a real stock trading account and investing with real money.
During the stock trading training period using the stock trading demo practice trading account, the beginner stock trader will learn the key factors needed to succeed in stock trading such as; stock trading education, stock trading money management, stock trading plan and stock trading systems.
The types of Stock trading strategies used and the skills required for any of these 3 stock trading accounts are essentially the same - those stock trading skills and stock trading strategies required for the Standard stock trading account or Mini stock trading account or Micro stock trading account are the same the only difference to be adjusted are the stock trading money management rules for each stock trading account type.