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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 03:26 PM.

  2. #1891
    Trader layigold's Avatar
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    You may have to consider the features of each of the account type, compare the advantages and disadvantages among those account types to determine which one is the best to go for considering the amount of money you have at hand. It will be wrong of anybody to prescribe the account type that another person must open, it is what each trader will have to do themselves.

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  3. #1892
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    Quote Originally Posted by layigold View Post
    You may have to consider the features of each of the account type, compare the advantages and disadvantages among those account types to determine which one is the best to go for considering the amount of money you have at hand. It will be wrong of anybody to prescribe the account type that another person must open, it is what each trader will have to do themselves.
    After considering it , I think we have to then grade it with the level of experience you thus have got, as a newbie trader that needs to master the risk management and all that, they have to make use of the cent account so that the risk been taken will be little. You see trading has so many risk and the best way to succeed and make money is ultimately depending on good skills.

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  4. #1893
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    Beginners should consider trading with a cent account because it's the best account to start trading forex with before you should trade with other account type you should master trading in the cent account well first cent account is low risky that's why you should trade with cent account if you are new.

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  5. #1894
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    Quote Originally Posted by freebird View Post
    Beginners should consider trading with a cent account because it's the best account to start trading forex with before you should trade with other account type you should master trading in the cent account well first cent account is low risky that's why you should trade with cent account if you are new.
    I think we can start with any account there is no problem in that but we must take a good learning about different account and different strategy which we can use in trading we need to focus on strategy instead to working and use time for factor which are less effecting for trader .

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  6. #1895
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    Quote Originally Posted by Queen-of-the-coastFX View Post
    After considering it , I think we have to then grade it with the level of experience you thus have got, as a newbie trader that needs to master the risk management and all that, they have to make use of the cent account so that the risk been taken will be little. You see trading has so many risk and the best way to succeed and make money is ultimately depending on good skills.
    Many traders will need to master a good risk management in order to survive and sad enough that not many traders know how to do it too. As a newbie in this business, the one that can do a good risk management will prevail and make great profit. Good skill and trading skill naturally will always be needed when we need to make our judgement and call too.

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  7. #1896
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    Quote Originally Posted by Yul View Post
    Many traders will need to master a good risk management in order to survive and sad enough that not many traders know how to do it too. As a newbie in this business, the one that can do a good risk management will prevail and make great profit. Good skill and trading skill naturally will always be needed when we need to make our judgement and call too.
    And the kind of account they will be using will evidently have a lot of role to play on that, for instance a trader who wants to make him self get used to the money and risk management has to after the demo account start with the cent account from which he or she has to trade as though they will be trading in the real account but with little risks.

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  8. #1897
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    Quote Originally Posted by RaptFX View Post
    And the kind of account they will be using will evidently have a lot of role to play on that, for instance a trader who wants to make him self get used to the money and risk management has to after the demo account start with the cent account from which he or she has to trade as though they will be trading in the real account but with little risks.
    With a demo account a trader can learn analysis and several strategies and further with cent account he can understand things more deeply. And if with analysis if a trader can make proper money management in trading then his success become certain too.We have to use all skills together to make our trading successful.

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  9. #1898
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    Quote Originally Posted by ChandniNight View Post
    With a demo account a trader can learn analysis and several strategies and further with cent account he can understand things more deeply. And if with analysis if a trader can make proper money management in trading then his success become certain too.We have to use all skills together to make our trading successful.
    There is no need to be so much in a hurry to start learning forex trading because it s important to follow things step by steps as a matter of fact when you have been able to follow the learning approach with the right account at a time, then I am sure we will have success. Because moving to the cent account when the learning is yet completed on the demo account will be so wrong.

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  10. #1899
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    Quote Originally Posted by fahaddd View Post
    I think we can start with any account there is no problem in that but we must take a good learning about different account and different strategy which we can use in trading we need to focus on strategy instead to working and use time for factor which are less effecting for trader .
    We can trade with any account and there is no problem with it but we need to make sure that we learn and develop a good knowledge and skills first, cent account is less risky that's why if you are new you should first learn from the cent account and understand this business well before trading with other account type.

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  11. #1900
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    You should choose account you think it's safe for you to trade all accounts are safe to trade but it depend on your experience at the current period or moment if you are new in forex trading you are advice to use the cent account because with cent actually you can go a long way even with small capital.

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