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Thread: What type of account to choose?

  1. #1
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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. #1851
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    Quote Originally Posted by jiji View Post
    A new trade should be trading with a cent account trading with a cent account lower the risk in trading because you can trade with low lot and leverage so the cent account should be the account you should be trading with if you are new in trading forex but after some time you can choose other trading account. Cause I noticed that we can open all trading account with same profile with roboforex.
    Traders that want to trade should see how far their own mental can goes. if they have a weak mentality in here then they just need to use the demo account but if their own mentality is very strong, they can focus with a real account and even a standard one on top of it too. It will not be easy i know but if they can do it properly, it will be great.

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  3. #1852
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    each trader chooses the best type of account according to his experience and his money that he will invest, so the trader of small investment should trade with cent accounts and the trader that has more money and more experience can trade with any other types that he prefer, i trade with fix and ecn accounts because it is good for trading.

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  4. #1853
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    All account are good for trading but when you are new you trade with the cent account because the cent account is low risky, cent account is a good place to learn about forex with real money and you won't lose big money in the cent account when you trade with low risk, cent account is the best for all newbies traders to use.

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  5. #1854
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    Some how I will say that traders has to focus on a more better way of trading, which quite has to do with them making sure that they only invest accordingly, which means that a trader who has not make use of the demo account should not go further, and thus after the demo account then the cent account should take place.

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  6. #1855
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    Quote Originally Posted by jiji View Post
    All account are good for trading but when you are new you trade with the cent account because the cent account is low risky, cent account is a good place to learn about forex with real money and you won't lose big money in the cent account when you trade with low risk, cent account is the best for all newbies traders to use.
    Depending on the traders because there are some traders that lacks good trading experience yet, so I think they should make more use of the cent trading account until they have good trading skills and can trade, they can go to the higher ones. It matter due to the effectiveness of risk management and money management.

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  7. #1856
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    My dear, if you ask me, I will say that all account provided in forex trade are all good. So selecting the type of account to choose should be solely be determined by you. But just bear it in mind that the type of account you are to choose is dependent on the one you need or the amount of money you have at that pointing time.

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  8. #1857
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    Quote Originally Posted by chioma View Post
    My dear, if you ask me, I will say that all account provided in forex trade are all good. So selecting the type of account to choose should be solely be determined by you. But just bear it in mind that the type of account you are to choose is dependent on the one you need or the amount of money you have at that pointing time.
    A newbie will have a lot of difficulties handling the standard account, mostly that kind of newbie who has not been able to develop good trading skills and understanding for the market, they need to start quite well with the cent account. So some account also depending on how much you can afford to reduce the risk you thus need to use the cent account too.

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  9. #1858
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    Am trading with standard account and this is very good though am still losing a lot of money but it is not the fault of the account but because I don't have much experience and knowledge of trading forex that is the cause of my loss, any account can be choose the most important thing is that we no how to trade forex.

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  10. #1859
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    Quote Originally Posted by Kelv View Post
    Am trading with standard account and this is very good though am still losing a lot of money but it is not the fault of the account but because I don't have much experience and knowledge of trading forex that is the cause of my loss, any account can be choose the most important thing is that we no how to trade forex.
    Trading with a good standard account in here will be good if you trully can make a good prediction about the market. Not all traders can make a good prediction about the market too so we know how to change ourselves in here for the better and improve our own trading result finally with all of it.

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  11. #1860
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    I think when the trader is new in forex trading he or she should use the cent account because this account is low risk compare to trade other account, cent account is the perfect account for a newbie to trade with, because this account will save and protect him from high risk trading.

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