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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. #2341
    Trader sniper007's Avatar
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    This should be for the new traders, the new trader should after the demo account, they can use the cent account for the purpose of making good trades with risk management. Then on the other hand, once the use of the risk management has been managed the right way, then the trader can then use the standard account and then they can get to trade more confidently.

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  3. #2342
    Trader layigold's Avatar
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    There is need to understand the pros and cons of each account types and then decide which one will be good for you . It is after you have gone through each of them that you will be able to make comparison . As at the moment , I have fix cent account and also fix standard account with this brokerage company, in the nearest future , I will be looking for account type that would allow me to trade WTI and Brent oil because I cannot trade these on the current account types I run with Roboforex

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  4. #2343
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    Quote Originally Posted by layigold View Post
    There is need to understand the pros and cons of each account types and then decide which one will be good for you .
    there is not much difference and i think if we have good experience if we know and we concentrate on market we will earn,this is not much important thing to understand about accounts types, if we are not good we can use copyfx account but in simple trading accounts there is not much difference, it won't help us to earn, our analysis can just help us to earn here

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  5. #2344
    Trader Azis Muslim's Avatar
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    Quote Originally Posted by altafch View Post
    there is not much difference and i think if we have good experience if we know and we concentrate on market we will earn,this is not much important thing to understand about accounts types, if we are not good we can use copyfx account but in simple trading accounts there is not much difference, it won't help us to earn, our analysis can just help us to earn here
    When you compare things in bigger picture in account types, of course each of them has wide advantages and differences to each others. At first I thought that Fix-Cent account was my best account but later after next few years, I came up with an outstanding idea to trade with different account, which now I am still using it is Pro-Standard. I understand no matter what accounts we are using does not give any meaningful advantage for our profits but at least we can feel the joy while trading with our favorite account types.

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  6. #2345
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    Personally I have tried all account types at Roboforex company and there are advantages and disadvantage of each type of account so it is better to have all of them. Cent accounts are good to trade micro lots and do not care about safety. Pro standard accounts are good to trade oil , ECN accounts are good for scalping.

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  7. #2346
    Trader cutiekc's Avatar
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    The account to be taken will depend on your level of experience, first of all, you should be able to have learned from the demo account, know how to use the cent account then as you progress, get to know how to make use of the standard account, being when you have ultimately gotten to have learned on how to make use of the risk management and you have an increase winning with your strategy.

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  8. #2347
    Trader ict2014's Avatar
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    This is a very valuable thread for a newbie. As newbie is not a prodigal in his calculation so cent account is obviously good for him. We know forex market means high price action but if we carry any loss trade for 100 to 300 pips then enough to turn that loss trade into a profitable stage. So easily we understand cent account how much important a retail trader who also a new client of this business. More important things here trade what type of trading account holds that is not a factor but the factor is to follow money management.

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  9. #2348
    Trader layigold's Avatar
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    There are many factors that determine the account types to choose and the first thing to do is to read through the benefits each account types has to offer . The account types will have one or more benefits above one another and each trader is to place his preference on that . Beside that , the amount of money you have to trade with would determine the account type . For instance , a person that has $200 account would not be expected to open a standard account . I think that a fix-cent or pro-cent account would be a lot better

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  10. #2349
    Trader cutiekc's Avatar
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    I think the type of account to be used will depend on your account size, just like I think when you have low skills and experience and then little amount of money. Try and invest in the cent account. Because there the risk can be controlled properly and then on the other hand, you should also know that the use of the cent account will help you to maintain a good process of controlling risk and being confident.

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  11. #2350
    Trader Sascha's Avatar
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    Quote Originally Posted by cutiekc View Post
    I think the type of account to be used will depend on your account size, just like I think when you have low skills and experience and then little amount of money. Try and invest in the cent account. Because there the risk can be controlled properly and then on the other hand, you should also know that the use of the cent account will help you to maintain a good process of controlling risk and being confident.
    any choice of accounts really flexible to our style in trading because we can set the leverage as we wish and choose whether we want to trade with standard or cent account. both mt4 and mt5 accounts has their own advantages and disadvantages we know in common descriptions. if we want to trade with specific pairs like usdzar or usdtry then it's only avaliable with mt4 or mt5 pro type account because it's not available with fix standard or cent account.

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