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Thread: What type of account to choose?

  1. #1
    Super Moderator RoboForex Trader's Avatar
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    What type of account to choose?

    Beginner traders often have questions about types of accounts – what type to choose, with fixed or dynamic spread? Roboforex company has 2 types of cents accounts: fix-cent (with fixed spread) and pro-cent (with dynamic spread). Know more about it on the company’s website: http://www.roboforex.com/trade-condi...account-types/

    Fix-Cent

    Features: Fixed spread, 4 digits after decimal point, «Instant Execution» mode.

    Instant Execution allows to execute orders immediately. This type of execution allows to trade with fixed prices what means that order will be either executed by indicated prices or rejected (trader will get requote). This type of order is useful for traders who need certain prices for execution and don’t want to have «slippages» while execution. Disadvantage of this type of order: trader will be unable to enter his position in case of aggressive price action – he/she will get requotes in most trades. That’s why this type of account has 4 digits after decimal point (to avoid numerous requotes). Such accounts are convenient for beginner traders. But you should remember that if there are no requotes – there is no instant execution.

    Pro-Cent

    Features: Dynamic spread, 5 digits after decimal point, «Market Execution» mode.

    Market execution mode allows trader to have nearest best prices for his trade. Order will automatically match with best price for the given moment. This type of execution is used also on futures and stocks exchanges and other marketplaces. Traders, who traded before on «Instant Execution» will note that execution time will increase with «Market Execution» more and quotes will change much more rapidly (because of additional digit after decimal point). 10 pips on «Pro-cent» wil be equal to 1 pip in «Fix-Cent» account. 5 digits are better for automatic execution when trader uses robots.
    Now, when we know differences among «Pro-Cent» and «Fix-Cent» accounts, let’s see some documentation: http://www.roboforex.com/trading-accounts/documents/

    For now, we can see release of trading conditions from August 13, 2013.

    Let’s go to «General provisions», I advice to pay some attention to point 6.6

    6.6. For accounts Fix-Cent, Fix-Standard and Fix-ECN spread specified in the contract specifications, is a fixed, but can be increased from 22:00 to 06:00 server time.
    Also, points 7.5 and 7.6

    7.5 In process of Instant Execution of Client’s order, the price quoted in the order is compared with the current price. In case the current price differs from the price quoted in the order, a new price will be proposed with comment “Requote”. In case Client does not accept the new price within 3 seconds, it will be considered that the transaction is cancelled.
    7.6 In case of Market Execution, execution of Client’s order will be made at the current price at the moment of order execution.
    Points 12.1.1 and 12.3.1.

    12.1.1. Stop Out value makes 10 % for Fix-Cent and Pro-Cent accounts on Metatrader 4 and Metatrader 5 platforms.
    12.3.1. Margin Call value makes 40% for Fix-Cent and Pro-Cent accounts on MetaTrader 4 and Metatrader 5
    Point 6.6 allows to increase spread. It means that we are dealing with conditionally fixed spread. Point 7.5 guarantees certain price for a trader in a period no more than 3 seconds. Point 7.6 indicates that orders are executed by market price, therefore some slippage may occur. Points 12.1.1 and 12.3.1 indicate that Stop Out and Margin Call levels are equal for both types of accounts.
    Now, when you know those nuances from trading conditions, let’s see how these conditions are realized in actual trading process. To accomplish this goal, we will go to historical tick charts of EURUSD since 30.09.2013 till 4.10.2013 (GMT+3) for the whole week.

    Fix-Cent

    Spread was as stable as 2 pips without any changes. Probably, this week was pretty quiet and there were no significant news or drivers for the market.

    Pro-Cent

    Let’s dig deep into details and make small research.
    Before we start, I will remind once again that 2-pips spread on Fix-Cent means 20-pips spread on Pro-Cent.
    I’ve divided one day on two sessions: Day session (6:00 – 22:00) and Night session (22:00 – 6:00), timezone is GMT + 3. Picture 1 shows lowest, average and highest values of spread.


    Picture 1. Spread value distribution on Pro-cent accounts.

    If we look at highest values, we may think that Pro-Cent accounts have wider spread, than Fix-Cent accounts, but it isn’t so. Ticks with spread more than 20 pips are less than other ticks (with spread lower than 20 pips). Let’s go through some cases.

    Case № 1

    Monday night we have seen the highest spread for the period, highest value is 92 pips. It’s worth mentioning that highest spread occurred before 1:15 (Night session), then values were no less than 20 pips. We can see it on Picture 2.

    Pic. 2. Spread value on Pro-Cent accounts

    [свернуть]


    Case № 2

    During news announcements, in some cases, spread is widening and achieves highest levels for the day. Let’s take one situation from 1.09.2013. There was economic data release. As we see, at 17:00 (terminal time) during USD ISD Manufactirung and USD ISM Prices Paid release, we have seen increased spread. Picture 3 shows spread values between 16:59 and 17:00:01 (highest values), then spread was decreased and 10 seconds after it decreases to 20 pips.

    Pic. 3. Spread value on Pro-Cent accounts

    [свернуть]


    The rest of the time period spread was lower than 20 pips. We can see it clearly on Picture 4, that shows value of spread of the whole day.

    Pic. 4. Spread value on Pro-Cent accounts during news announcement release

    [свернуть]


    Now, when you’ve gone through all nuances, we can make some conclusions.

    Fix-Cent accounts are more suitable for traders, who trade during high volatile market conditions (during news announcements for example) because spread there is fixed. But also, their orders can be rejected due to slippage (they will get requotes). Also, this type of accounts will be suitable for those who trades during the opening and the closing of the week (wide spreads occur during those periods). Fix-Cents accounts have wider spread than Pro-Cent. That’s why those trades who avoid news announcements and scalpers should better trade using Pro-cent accounts despite possible slippage. But be aware of news announcements time!

    I thinks, that analysis in this thread will help beginner trader make choice due to personal trading style.

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    Last edited by RoboForex Trader; 11-04-2013 at 02:26 PM.

  2. #1351
    Trader cutiekc's Avatar
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    When I am a newbie in the market, I will go for an account which I will not have to pay much for. That is the cent account, it has less requirement and then youc could trade on it with little amount of money, so basically the cent account is where to start from and then gradually you can make use of the real account.

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  3. #1352
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    Quote Originally Posted by cutiekc View Post
    When I am a newbie in the market, I will go for an account which I will not have to pay much for. That is the cent account, it has less requirement and then youc could trade on it with little amount of money, so basically the cent account is where to start from and then gradually you can make use of the real account.
    that is good idea for traders, except that the cent account is not always common for traders. i have seen the usefulness of the account of this thread, and i can advice some other traders to make the best use of it while they want to train till they have the power to trade standard accounts.

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  4. #1353
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    Quote Originally Posted by silverlady View Post
    that is good idea for traders, except that the cent account is not always common for traders. i have seen the usefulness of the account of this thread, and i can advice some other traders to make the best use of it while they want to train till they have the power to trade standard accounts.
    [lang=id]cents account is good for them who start trading with small capital or also as the place after demo account, so we need to take it as the best chances that will give us more ways to success later, we need to trade properly but we need to trade with safely then we can stay on the market and grow bigger,[/lang]

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  5. #1354
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    I know that we would want to go for the bigger account the one that will give us so much profits, but then I think that is a gad idea, mostly when we are still learning, I think in such a time, we just have to learn and trade on the cent account till we grow confident the more on how to trade.

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  6. #1355
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    Quote Originally Posted by splash View Post
    I know that we would want to go for the bigger account the one that will give us so much profits, but then I think that is a gad idea, mostly when we are still learning, I think in such a time, we just have to learn and trade on the cent account till we grow confident the more on how to trade.
    you have wise decisions about it, that is a good choice to use cents account first for starting and give us much experiences that will build us to be a good trader later with take another account type for trading , that is the process for us ad prepare ourselves with wee
    there are many good thing with cents account and we need to take it with good responsibility

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  7. #1356
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    Quote Originally Posted by newentry View Post
    you have wise decisions about it, that is a good choice to use cents account first for starting and give us much experiences that will build us to be a good trader later with take another account type for trading , that is the process for us ad prepare ourselves with wee
    there are many good thing with cents account and we need to take it with good responsibility
    cent account is not a must to my trading, i do use it when the time comes, except that it is not the must for me to sue like some traders are taking it. the cent account are accounts that is of low look, and it for learning when trader do not want to use the demo account primarily.

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  8. #1357
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    Quote Originally Posted by newentry View Post
    you have wise decisions about it, that is a good choice to use cents account first for starting and give us much experiences that will build us to be a good trader later with take another account type for trading , that is the process for us ad prepare ourselves with wee
    there are many good thing with cents account and we need to take it with good responsibility
    You know the beginners comes to the market and they move straight to making use of the real account in trading, that is so wrong and I think that has been the reason why there has been so many people who are losing. Therefore I do think that it would have been more better that the demo account be used first then the cent account before the real standard trading account.

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  9. #1358
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    Quote Originally Posted by splash View Post
    You know the beginners comes to the market and they move straight to making use of the real account in trading, that is so wrong and I think that has been the reason why there has been so many people who are losing. Therefore I do think that it would have been more better that the demo account be used first then the cent account before the real standard trading account.
    [lang=id]there were many people who came to forex trading business with took demo account and then cents account as the second steps, but also there were many traders who jump to cents account type directly to start practicing for some reasons too, so as long as they take this business seriously, i guess there is no problems and they will get the experiences and understand with all consequences,[/lang]

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  10. #1359
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    Quote Originally Posted by samprazaan View Post
    [lang=id]there were many people who came to forex trading business with took demo account and then cents account as the second steps, but also there were many traders who jump to cents account type directly to start practicing for some reasons too, so as long as they take this business seriously, i guess there is no problems and they will get the experiences and understand with all consequences,[/lang]
    Knowledge is important in this profession, but most traders jump into trading with the mindset that they can make money in this market right away and so they ignore all the necessary steps and deposit huge money in their account believing that its the passport to gain huge in a short period of time but they got it all wrong and so they end up losing a lot.

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    " Trading is 70% Psychology, 15% Risk Management and 15% Strategy ! "

  11. #1360
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    I like Robo forex broker, because of the fact that I can make money with them and also they offer so many account type that suits my trading experience, therefore I can start gradually, I can start from a better place, which is the cent account thus that should be after I must have learned and it is a good idea I think.

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