Forex Brokers with Cent Accounts
МТ4 iPhone, МТ4 Android , МТ4 Windows Mobile, WebTrader, MetaTrader 4 (MT4), MetaTrader 5 (MT5)Open account
Demo accounts (with a time limit), Standard Accounts, Swap free accounts, Micro accounts
ASIC (Australia) license №443670 IFSC (Belize) license №000261/158 CySEC (Cyprus) license №120/10Open account
MetaTrader 4, MetaTrader 5, Ctrader, R trader, WebtraderOpen account
Unlimited Demo Accounts, Standard Accounts, ECN accounts, STP accounts, Cent accounts, Swap free accounts, VIP accounts, Micro accounts, Segregated accounts
RoboForex Ltd has a special brokerage license IFSC Belize "Trading in financial and commodity-based derivative instruments and other securities" under the number 000138/210.Open account
MetaTrader 4, MetaTrader 5, Meta Trader 4 Mobile, MetaTrader 5 Mobile, MetaTrader 4 MultiTerminalOpen account
Unlimited Demo Accounts, Standard Accounts, ECN accounts, Cent accounts, VIP accounts
IFSC (Belize) license №IFSC/60/301/TS/17 NAFD (Russia) FSA (Saint Vincent and the Grenadines) license №20389 IBC 2012 AFD (Russia)Open account
MetaTrader 4, MetaTrader 5, Meta Trader 4 Mobile, MetaTrader 5 Mobile, MetaTrader 4 MultiTerminal, Web Tarder, TickTraderOpen account
Unlimited Demo Accounts, Standard Accounts, Cent accounts, Swap free accounts, Segregated accounts
BVI FSC, License Number SIBA/L/14/1082, FSC Saint Vincent, Reg. Number IBC22945, Saint Vincent, IBC24321Open account
MetaTrader 4, MetaTrader 5, cTraderOpen account
Demo accounts (with a time limit), Standard Accounts, ECN accounts, STP accounts, Cent accounts, Swap free accounts, Segregated accounts
Financial Services Commission (FSC) BVI, license registration number: SIBA/L/13/1063Open account
МТ4 iPhone, МТ4 Android, МТ4 Windows Mobile, WebTrader, MetaTrader 4 (MT4), MetaTrader 5 (MT5), МТ5 iPhone, МТ5 Android, МТ5 Windows MobileOpen account
Unlimited Demo accounts, Standard accounts, ECN accounts, Cent accounts, Free swap accounts, Micro accounts
CySec - 185/12, FSCA - FSP: 46614, FCA - 600475Open account
MetaTrader 4, MetaTrader 5Open account
Demo accounts (with a time limit), Standard Accounts, ECN accounts, Cent accounts, Swap free accounts, Micro accounts, Segregated accounts
FSA - SD025, CBCS - 0003LSI, FSC - SIBA/L/20/1133, FSC - GB20025294, FSCA - 51024, CySEC - 178/12, FCA - 730729Open account
Forex trading can be challenging but financially lucrative. It can also be risky. Forex “cent trading” can make the risk or loss manageable for investors with limited resources and investors new to the game. But regardless of the risks, or the size of potential losses, investors need to know and understand the forces that influence the dynamics of forex trading.
Liquidity is also an advantage of forex investing. The market changes move fast and the volume of trades is enormous. Forex trading volumes now exceed more than $4 trillion per day. A forex trader can get in and out relatively easily and quickly. By the same token, an investor must be on his toes and ready to respond.
Dynamics of Forex Trading
The dynamics of the forex market are largely influenced by governmental actions by central banks that issue and manage the currencies they issue. Noneconomic political events (e.g elections, scandals, legislative actions) also impact currency movements.
These dynamics are compounded by the fact that multiple foreign currencies are governed by multiple central banks whose decisions are responsive to the unique interests of their home countries.
Investors have no control over those actions or decisions. They can only predict them and respond accordingly. New or small traders can learn and develop their systems by taking advantage of opportunities afforded by forex cent trading.
Since the Great Depression, we have much more controlled or managed economy with measures to smooth it out with much less volatility. Central banks such as the Federal Reserve Bank manage economies by their authority over monetary policy. (Congress also manages the economy with its fiscal policies including taxing policies and spending policies.)
One central bank function is to control the rate of inflation. Another function is to forestall recessions or depressions. In a word, they control the money supply in circulation. They can do that by setting interest rates i.e. the cost of money.
They can also affect the money supply by setting banking reserve requirements. And they can conduct open market operations such as buying or selling government bonds on the open market.
All of these factors influence the trading value of currencies. Investment in currencies is in effect betting on the exchange value of those currencies, more specifically the rise or fall of the exchange value of those currencies. Central Bank decisions and actions have a significant impact on the trading value of currencies.
Fundamentals of Forex Trading
A currency transaction involves a pair of currencies. The trader is selling one currency to buy another one. The currency pair consists of the “base” currency and the “variable” currency.
For example, suppose a trader wants to buy Euros (EUR) and use US Dollars (USD) to pay for them. EUR is the “base” currency and USD is the “variable” currency. The quote states the bid and ask prices, from a broker’s point of view, of the variable currency. The trade is expressed as “EUR/USD”. In the trade, the buy and sell happen at the same time.
The quote for a EUR/USD trade might look like “Sell/Bid (USD) at 1.50407 and Buy/Ask (USD) at 1.51413” The difference between the bid and ask is called the “spread”. The spread is expressed in “pips”.
A pip is short for “percentage in point”. The third and fourth digits of a quote are “pips”; the fifth digit is 10ths of a “pip”. In this example, the “spread” is 0.6 (6/10ths) “pips” (413 less 407) The labels must be generic since they are fractions of various currencies. Where the variable currency is US Dollars, a “pip” is equivalent to $0.001.
All this analysis is critical for an understanding of forex cent trading. Before taking up forex cent trading, all investors need to fully understand and consider its risks and rewards.
Risks and Rewards of Forex Trading
As discussed, the liquidity advantage of forex trading is coupled with necessity of a trader’s experience, knowledge, and research. Two other advantages of forex trading are relatively small minimum deposits and virtually unrestricted margin trading.
As part of the response to the excessive speculation leading up to the Great Depression, the Federal Reserve Board is empowered to enforce limits on leveraged or margin trading. Today, margin trades on central exchanges are limited to 50% of the purchase price.
Margin trading in currencies is not restricted. Some banking laws limit the activities of banks which are major players in forex trading? But leveraged trading of currencies per se is not regulated.
Forex brokers express their margin limits as a ratio. A broker that requires a 1:100 ratio will require the trader to put up cash equal to 1% of the volume of their investment. This allows traders to reap large profits on relatively small out-of-pocket investments.
For example, if the investor wants to trade for $100,000 they need to put up out-of-pocket cash of only $1,000. If there is a 2% spread, his profit is $2,000 of 200% gain on his $1,000 cash investment. Some forex cent brokers have ratios as high as 1:500.
However, if the deal goes south the consequences can be devastating. In the foregoing example, suppose the price of the currency declines so that the spread is a negative $2.000. The investor owes the broker $2,000 which wipes out his investment account and requires him to deposit another $1,000.
Some traders offer certain protections against excessive volatility. Those include stop-loss and take-profit features.
A small investor who is worried about risk could choose not to leverage their investment. But the upside is somewhat more limited and they are not taking advantage of forex trading. As an alternative, the small investor can stick his toe in the leverage water by investing in a forex cent account. They can limit their downside risk of loss and the amount of a potential loss while learning the tricks of the trade.
Are Forex Brokers Regulated?
Forex trading is decentralized (i.e. not conducted on central exchanges). Therefore, Forex trading, and forex brokers, are not necessarily regulated. They can be effectively self-regulated by independent or quasi-governmental organizations or not regulated at all.
In the United States, forex brokers are to some extent regulated by Commodity Futures Trading Commission (CFTC). In the UK, the licensing organization is the Financial Conduct Authority (FCA). Brokers list on their websites the local regulatory authorities of which they are members.
If a broker is not a member of or licensed by such an organization they should be avoided. Most licensed forex brokers are regulated or licensed by multiple authorities where they do business. They list their licensures on their websites.
Forex Cent Brokers
Forex brokers with cent accounts offers and maintains a trader’s account in cents. For example, if a trader deposits $100 his account is expressed as 10,000 cents. With a cent account, a beginner investor can learn and experiment without risking more than they can afford.
Most forex cent brokers also allow investors to upgrade and move their cent account to a non-cent account. Experienced traders who want to experiment with strategies can also use forex cent accounts. Except for this special feature, cent accounts are managed in the same way as traditional forex accounts.
While there are thousands of customary forex brokers, there are only a few brokers offering forex cent accounts. You should deal only with cent brokers that are regulated. Cent brokers list on their websites the regulators governing them.
Most forex cent brokers offer to their clients the MetaTrader platform for trades and maintain accounts in USD or Euros. The MetaTrader platform requires minimum trades volumes of 10 units (e.g. $0.10).
There are available online different reviews of forex cent brokers. These reviews are a helpful start for the new investor, but not a substitute for an investor’s in-depth research.
For example, some favorably reviewed brokers are not available in the U.S. for whatever reason. St. Vincent & the Grenadines is a popular jurisdiction for forex brokers. It is a low-tax country noted for its ease of doing business. Above all, forex brokers domiciled there are virtually unregulated. Any broker who claims to be regulated by St Vincent and the Grenadines is lying.
The most important consideration choosing a broker, including forex cent brokers, is the security of your account. Next is the trustworthiness of the broker. Finally, the terms of the trades offered.
Fortunately, there is abundant information available on the internet to assist your research. Good luck.