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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. #2321
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    All this accounts are good and have low spreads if we try to compare this broker with others. I use the pro cent account and I think it's the best for beginners who would look to start trading better with the little capital they have. It's from here they it can be possible for them to develop the best system that will equally help them to always trade profitable. Also its not about choosing account that matters but also having the right knowledge and great management in forex.

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  3. #2322
    Trader layigold's Avatar
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    There are so many account types where you can choose the one that you consider most suitable for you . It is better for beginner to read through the features of each of the account types and if in doubt , he should not hesitate to ask questions from the experienced traders. I prefer cent account because any amount less than $1000 is not sufficient to open a dollar account as far as I am concerned but with other traders , it may not be so

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  4. #2323
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    Quote Originally Posted by layigold View Post
    There are so many account types where you can choose the one that you consider most suitable for you . It is better for beginner to read through the features of each of the account types and if in doubt , he should not hesitate to ask questions from the experienced traders. I prefer cent account because any amount less than $1000 is not sufficient to open a dollar account as far as I am concerned but with other traders , it may not be so
    i think account type not matter much we can use any account type, we people can use any but our main aim should be good experience if we have good experience then we can trade well, when we do not have experience we can not survive, so we should learn trade then we can earn, with standard account also we can use 0.01 lot and i think with less then this is totally waste of time

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  5. #2324
    Trader layigold's Avatar
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    Quote Originally Posted by naeem555 View Post
    i think account type not matter much we can use any account type, we people can use any but our main aim should be good experience if we have good experience then we can trade well, when we do not have experience we can not survive, so we should learn trade then we can earn, with standard account also we can use 0.01 lot and i think with less then this is totally waste of time
    Well , if account types do not matter , I don't brokers would be interested in wasting their times by providing different account types . I want you to understand that each account types has its own features , advantages and disadvantages so also traders' goals and objectives differ . I do not expect traders to just open any account without going through different account types and choose the one that he prefers most . Would you have advised a beginner trader who only has $100 to open a standard account ? I know you would not , based on this , I can say that account types really matter

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  6. #2325
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    To make a good decision, I'd say that the trader should use the cent account if they are new to the market. But if they have been old in the market and are familiar with the risks and all that in the market then they can make use of the standard account, however, what matters is the level of experience and skills they have gotten, those are the things that will determine and make a good profitable trader.

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  7. #2326
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    Quote Originally Posted by Striker$ View Post
    To make a good decision, I'd say that the trader should use the cent account if they are new to the market. But if they have been old in the market and are familiar with the risks and all that in the market then they can make use of the standard account, however, what matters is the level of experience and skills they have gotten, those are the things that will determine and make a good profitable trader.
    it not matter into trading we can use any account type, if we are greedy in cent account also we can use some big risk and if we are other one we can use smaller risk on standard accounts as well, so make sure you use some management, if we use it we can do well, if we do not have management we can not survive no matter what account we use so this is simple way for us, we should get some good strategy it should based on both things

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  8. #2327
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    Using right account type is very necessary for our trading career. So, in this situation I want to say that we always have need to choose account on our investment. If we have big investment then we have need to use ECN accounts otherwise standard accounts are good choice.

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  9. #2328
    Trader cutiekc's Avatar
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    Quote Originally Posted by naeem555 View Post
    it not matter into trading we can use any account type, if we are greedy in cent account also we can use some big risk and if we are other one we can use smaller risk on standard accounts as well, so make sure you use some management, if we use it we can do well, if we do not have management we can not survive no matter what account we use so this is simple way for us, we should get some good strategy it should based on both things
    You are right, but we ought to see that there are also some serious traders that are willing to make improvement and then learn how to trade the market. Therefore, the use of cent account could also help the trader to manage their risks in the business, because when the risks has been managed, then the trader will be able to trade with peace of mind, so when we are using little capital, we need the cent account.

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  10. #2329
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    In forex trading, learning is the main thing and that should be taken seriously by the traders. Cent account and standard account just giving help to do trade in the real trading platform, we are investing money in both accounts but if knowledge if not there then both will be useless. We would be able to grow our confidence when we make use of the demo account and then start the real trading with a cent or standard account.

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  11. #2330
    Trader Azis Muslim's Avatar
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    Quote Originally Posted by cutiekc View Post
    You are right, but we ought to see that there are also some serious traders that are willing to make improvement and then learn how to trade the market. Therefore, the use of cent account could also help the trader to manage their risks in the business, because when the risks has been managed, then the trader will be able to trade with peace of mind, so when we are using little capital, we need the cent account.
    I always agree to traders who has the same mindset with me about taking cent account as the best type of account for beginners to trade in real market. This method is important for them to learn real knowledge about market and feel the tensions, seriousness, everything about real trading they will never get from demo account. Although it is riskier to do and beginners could lose their money easily, I think they can prevent this by using small leverage like 1:100 and focus on quality than quantity.

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