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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. #2251
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    Quote Originally Posted by mao View Post
    I used professional standard account in my trading because these type of account are helpful for traders to trade with standard but if you are greedy then cent account is best for you because that account is help traders to control their greeds and they can open big lot size on it and their risk is also low with these high lot size trading.
    By professional standard account, i believe you mean the pro-standard account? Well, this is a very good account for the traders that have a good means to trade the market, but that means of trading must not be scalping, because the spread on the pro-standard accounts are still not super-low like that of the ECN and prime accounts. However, the account type is not the main thing the trader needs for their success, traders need more of technical expertise than anything else.

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  3. #2252
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    Quote Originally Posted by ajagbeolegba View Post
    By professional standard account, i believe you mean the pro-standard account? Well, this is a very good account for the traders that have a good means to trade the market, but that means of trading must not be scalping, because the spread on the pro-standard accounts are still not super-low like that of the ECN and prime accounts. However, the account type is not the main thing the trader needs for their success, traders need more of technical expertise than anything else.
    I think the account that we are to make use of in forex trading is to make sure that we are choosing the account that would support the way you trade. Like for instance, if I am new in the market, there is no need going after the real account, I should follow the demo account and then follow the cent accounts to accomplish self discipline.

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  4. #2253
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    The fixed cent account is best for new comers trader because its not easy for new traders to control their greedy easily. So if they are use cent account then within very short time period they can make some good earning easily. Forex cent account are also decrease our risk in our trades and its best for new comers to use this type of account to trade with safe way.

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  5. #2254
    Trader cutiekc's Avatar
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    The market has made it much possible for us to really start little and then be able to grow bigger in the business. I like using the standard account because I have really got to learn and know how to make use of the demo account and then the cent account. Furthermore, in forex trading market, it is a choice to use what so ever account you want to.

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  6. #2255
    Trader Lyon's Avatar
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    Quote Originally Posted by cutiekc View Post
    The market has made it much possible for us to really start little and then be able to grow bigger in the business. I like using the standard account because I have really got to learn and know how to make use of the demo account and then the cent account. Furthermore, in forex trading market, it is a choice to use what so ever account you want to.
    but I think greed wouldn't allow some traders be able to have such trading success, like starting from the cent account and then developing into the bigger account, most of them just want to make fast amount of money from the market which is not the way it has to be. Choosing the right account to trade from in the market shouldn't be coming from the expectation of making profits.

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  7. #2256
    Trader ara's Avatar
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    Roboforex provides various types of accounts in accordance with our needs and conditions. This makes it easy for us to invest / trade in accordance with our wishes. I am happy with this, even I really want to have all types of trading accounts on roboforex. Pro standards and pro cent are my favorites, somehow I like to trade with floating spreads rather than fixed spreads, although many traders are more comfortable with fixed spreads but not with me.

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  8. #2257
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    The forex professional standard account is good for me and I use it only in my trades. Traders are need to choose their account with very carefully because if you are greedy then the professional cent account is good for you and help you to make some big earning within very short time period. Traders are need to choose their trading strategies carefully then they can earn good on forex market.

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  9. #2258
    Trader sniper007's Avatar
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    Any type of account is good. But I will strongly suggest that the account size should be put into consideration, because when the trading account size is little then the use of the cent account should be the best option so that you can control the risk and then be able to make money from the market. I have invested $100, so as to have the 3 percent risk used effectively I had to use the cent account.

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  10. #2259
    Trader Obaforex's Avatar
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    Usually the best and most suitable account type to choose in the forex market can best be determined by your amount of capital in this market ( e.g cent account for small capital and standard account for large capital). Or you may pick an appropriate account type to trade with in this market by considering your trading strategy ( e.g. scalpers will prefer ecn accounts and news traders will prefer fix spread accounts).

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  11. #2260
    Trader Lyon's Avatar
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    Quote Originally Posted by ara View Post
    Roboforex provides various types of accounts in accordance with our needs and conditions. This makes it easy for us to invest / trade in accordance with our wishes. I am happy with this, even I really want to have all types of trading accounts on roboforex. Pro standards and pro cent are my favorites, somehow I like to trade with floating spreads rather than fixed spreads, although many traders are more comfortable with fixed spreads but not with me.
    I am a long term trader so I don't give concern to the spread most of the times, what I give much concern to is the use of the right account in accordance to the account size I have got which will make me be able to use the right adequate risk management and lotsize. if a trader wants to make money from the market. It is not by spread but more of the trading strategy and then analysis method the trader have got and makes use of.

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