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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. #2311
    Trader Sascha's Avatar
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    Quote Originally Posted by ict2014 View Post
    I think as long as trader experience with margin call trader should use lower leverage and cent account. We all always advice the loser to use that but they could not exit from a very known problem such as big lot and big risk. At this position both of setting help the trader giving a lot of extra chance continuesly and trader can build up a new habit what for he wa fight to obtain.
    there are several cases that needs some attention when traders are losing to market everytime they trade. it's not about the type of account they need to choose properly first but it's their mindset and interests in learning that needs more improvement. after giving this treatment to their mindset and bring back the ability to learn better, then they may think of choosing specific account that suitable with them like pro standard and use 1:50 to 1:100 leverage.

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  3. #2312
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    Quote Originally Posted by Sascha View Post
    there are several cases that needs some attention when traders are losing to market everytime they trade. it's not about the type of account they need to choose properly first but it's their mindset and interests in learning that needs more improvement. after giving this treatment to their mindset and bring back the ability to learn better, then they may think of choosing specific account that suitable with them like pro standard and use 1:50 to 1:100 leverage.
    leverage matter if we have smaller capital account if we have good and strong account then we can choose any leverage, so make sure yo invest some good balance its really best for us, so make sure you do well and do on base of experience in real, use proper management and always keep into mind that you can do well just if you have relax mind and big account is key of relax mind

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  4. #2313
    Trader Azis Muslim's Avatar
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    Quote Originally Posted by naeem555 View Post
    leverage matter if we have smaller capital account if we have good and strong account then we can choose any leverage, so make sure yo invest some good balance its really best for us, so make sure you do well and do on base of experience in real, use proper management and always keep into mind that you can do well just if you have relax mind and big account is key of relax mind
    Normally for beginners they will directly take into consideration to trade with cent or standard account in fix type. They have no idea about the advantages of pro type account unless they read the details and then open it. It took me years to realize the advantage of pro type account and then change my attached account of this forum because I feel like pro account has better advantages that fix or cent account offered to me.

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  5. #2314
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    The type of account a trader chooses will depend on the amount the trader is investing and how he wants to trade,if your trading capital is small then definitely you will be looking at a cent account,if you have enough capital then you can move up to trading the standard account,although some traders with big account size still uses the sent account.

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  6. #2315
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    I think one has to think about level of knowledge and level of experience, if the trader lacks a lot of experience then they should use the demo account, develop their trading skills and then on the other hand, if the trader has learned that way from the demo account then the trader could then learn with cent account, apparently, gradually they can get to other accounts.

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  7. #2316
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    Quote Originally Posted by Brain View Post
    I think one has to think about level of knowledge and level of experience, if the trader lacks a lot of experience then they should use the demo account, develop their trading skills and then on the other hand, if the trader has learned that way from the demo account then the trader could then learn with cent account, apparently, gradually they can get to other accounts.
    experience comes with time and attention so give time and attention to trading as much as you can, after that you can be able to earn here, lack of experience is big cause of loss because if we do not have knowledge we will take less risk because we know with higher we can lose but if we people have wrong or less knowledge we will think we are best and in that confusion we will lose just

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  8. #2317
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    Quote Originally Posted by naeem555 View Post
    experience comes with time and attention so give time and attention to trading as much as you can, after that you can be able to earn here, lack of experience is big cause of loss because if we do not have knowledge we will take less risk because we know with higher we can lose but if we people have wrong or less knowledge we will think we are best and in that confusion we will lose just
    you are really true saying when we give it time and attention we can learn actually we need to learn when we do not observe we can give it time but can not earn from it so we need to observe trade as well for learning it. i am doing same strategy on demo account for understanding its worth and usage but there are not good results so i am going slowly into trade

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  9. #2318
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    Quote Originally Posted by altafch View Post
    you are really true saying when we give it time and attention we can learn actually we need to learn when we do not observe we can give it time but can not earn from it so we need to observe trade as well for learning it. i am doing same strategy on demo account for understanding its worth and usage but there are not good results so i am going slowly into trade
    yes that is reason i prefer to give it attention because this market is not easy if we say we use one pattern but it works totally different, sometime market behave different on same pattern move so market is unpredictable we can just make analysis and it required our hard work and patience, so give it time and attention to learn in earning side as well we can do good with time

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  10. #2319
    Trader Silhouette's Avatar
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    Quote Originally Posted by naeem555 View Post
    yes that is reason i prefer to give it attention because this market is not easy if we say we use one pattern but it works totally different, sometime market behave different on same pattern move so market is unpredictable we can just make analysis and it required our hard work and patience, so give it time and attention to learn in earning side as well we can do good with time
    Everything you explained here isn't really affect to the choice of account because whatever type of account we choose, the result will stay the same if we're still bad at trading and analyzing market. What we need to improve and learn is with our methods first and choose which type of account as the last project we can do. Put the priority to its place.

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  11. #2320
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    Quote Originally Posted by Silhouette View Post
    Everything you explained here isn't really affect to the choice of account because whatever type of account we choose, the result will stay the same if we're still bad at trading and analyzing market. What we need to improve and learn is with our methods first and choose which type of account as the last project we can do. Put the priority to its place.
    this is good and i accept but if we go for some big lots and for some long term then it can make difference, if we are scalping and have fix spread we can lose some pips in sum of amount in end of month if we calculate, so in scalping every pip really matter but not into long term, so keep into mind we can do well if we have experience it can tell us what is good for us

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