Trade Stock Indices

Stock Accounts

Index Accounts Examples

In recent times, retail has become very popular, and more people want many different kinds of trading accounts. There are lots of different kinds of accounts that anyone can get if they want to put money into the online market - Account Explanation.

The stock index market uses high borrowed funds for bets on price changes. Traders buy big volumes with this help. Borrowed funds draw in many online traders. They boost gains or cuts since you use little of your own money and borrow the rest.

Traders can pick from different account types to manage their funds and trades better.

How a Real Account Looks Like

Standard Account Example - Live Accounts Types - Account Types

Traders should think about their goals first. Then pick the right account type.

Below is a comparison of the two primary types of trading accounts typically utilized for trading indices. The review of account types below outlines the distinct features associated with each trading account type.

1. Standard Trade Accounts Defined with Examples

Index Account means a standard stock setup. Trades use US dollars with full lots or contracts. One lot equals one contract. You need at least $10,000 to start.

One contract signifies the minimum volume for any single trade. This account option is best suited for traders who have sufficient capital allocated for indices trading - this account type generally requires an initial capital of $10,000 to $50,000. For this standard account, the trader will not suffer from undercapitalization, and provided they employ robust indices fund and money management techniques, this standard account boasts the highest probability of yielding profits because it is adequately capitalized. Undercapitalization is the root cause preventing most indices traders from achieving profitability.

Skip the standard account until your balance hits at least $10,000. Aim for up to $50,000 to trade safely.

Professional Money Managers say you should have at least $50,000 to start this regular account and only risk 2% of your account's total money on each trade. However, most brokers will still let you start this regular account if you have more than $10,000.

With a 100:1 ratio, your broker lends big. They match every $1 you have with $100 more. So $1,000 becomes $100,000 for index trades.

2. Micro Account Explained

Index Account Basics - Micro Account. Micro accounts use lot sizes that equal just one-hundredth of a standard lot. They suit traders with little starting cash. Some open with as little as $5.

This Micro account feature empowers traders to execute transactions in micro lots. For index trading, one micro lot represents one-tenth of a mini lot and one-hundredth of a standard trading lot.

This Micro account option is generally best fitted for account equity balances which are between $1,000 and $5,000

When trading, a standard lot for indices is the smallest normal amount of an asset that can be traded. However, many brokers let regular stock traders trade smaller amounts than this to let more people into the market. Letting people trade indices in very small amounts lowers the smallest trade size, which lets new traders and those without much money start trading and get a feel for it without risking a lot of money.

Prior to opening a real account, traders can explore online trading tutorials. For additional practice with indices, beginners are encouraged to open a demo trading account with a broker, allowing them to practice placing trades before transitioning to real money trading.

In practice accounts during training, new traders grasp success basics for index trading. These include education, money management, plans, and systems.

The types of trading strategies used and the skills required for any of these 2 accounts are essentially the same - those trading skills and strategies required for the Standard account or Micro trading account are the same the only difference to be adjusted are the indices funds management principles for each account type.

Additional Tutorials & Subject Areas:

Stock Index Broker