Transactions are done in millions taking 2-3 days which is known as spot value. The investment banks carry out a credit check which is somewhat like when a person is applying for a mortgage. Things are different compared to banks and other institutions where trade goes on for 24 hours daily for the retail investor in forex trade.
When a retail forex trader trades it is recorded in the broker’s book having no real transfer of funds although the retail investor is actually trading with the banks with similar spread and almost same quotes. The trade by retail investor is placed through the margin broker’s environment. Through the assistance of a trader, the retail investor’s trade is placed in real time where an order is received from the investor that can be a sell, buy or close position.
Not only the retail investors are allowed by the broker to trade live in forex with the banks but they are also provided with a leverage system. This means that only a deposit that represents the amount of currency a person wishes to control is required by the broker. This means that as long as the deposit is enough to cover any of the losses that might be incurred by the trade.
So what about mini forex trading and what are meant by mini forex trading account? Mini forex trading is quite a simple and as per the information given about regarding retail forex trading, mini forex trading and usage of mini-account is exactly that. Instead of trading 1 whole lot each time which is the controlling of 100,000 units of currencies using 1000 units of security or the deposit for trading a profit of about $10 per pip depending on the forex currency pair you are trading, go for mini account.
You can use mini account that sometimes tends to be completely vague from a standard account for trading some fraction of the lot. Technically, this could be as little as 0.1 lot which is $1 profit per pip or half of the lot which is $5 profit per pip. Mini forex trading can be easily understood by understanding the concept of lot in forex trade. After you have understood that trade takes place in lots in forex and what 1 lot exactly represents and means to the trader/banker or retail investor using the leverage provided, it is fairly easy and simple to comprehend that mini forex trading is basically the mini-scale trading of forex.
Rather than trading in single lot or multiple lots, a smaller deposit is used by the retail investor having trades and broker for less profit and less risk too. Not much profit is required to start out with for mini-forex account e.g. 01 lot or 0.5 lots. Mini-forex trading can be started with small amount and nowadays some of the forex brokers of the trade today can start currency trading with a customer’s account having as little as $500. This is called mini-forex trading.