Account Explanation

2 Types of Accounts

In recent years retail trading has grown hugely in popularity & the demand for different types of accounts has grown. There are many different account types available to any trader who wants to invest in the online market - Gold Account Explanation.

The market is a highly leveraged market for speculating on price valuations. Traders can purchase big amounts of trading units using leverage - Gold Leverage is what makes gold trading attractive to many online traders - with trading leverage a trader can make more profits or losses because they use less of their capital & borrow the rest.

There are different types of accounts available to help investors better manage their account capital as well as their trade transactions.

How a Real Account Looks Like

It is therefore important that the traders consider what they want to get out of their trading, before deciding on the account type to open.

Below is a comparison of the two types of accounts commonly used to trade gold. The account types review below explains the different features of each of the types of accounts.

1. Standard Accounts Explained

Gold Account Explanation - Standard Account. A Standard Account is denominated in US Dollars and gold trade transactions are placed using standard lots. One lot is also known as a one contract. Minimum opening capital - at least $10,000 USD.

1 contract refers to the minimum size of a single trade transaction. This gold account option is the most suitable for traders with enough capital to invest in xauusd - this gold account option requires $10,000 & $50,000 dollars as starting capital, for this standard account the trader will not be undercapitalized & with good gold money management rules and gold money management strategies, this standard account option has the best chance for profitability because it is not undercapitalized. Under capitalization is what makes most traders in gold trading not profitable.

It is not recommended to open a standard account unless you have an account balance of at between $10,000 minimum and $50,000.

Professional Money Managers advice $50,000 minimum to open this standard account & only opening trades with only 2% of the capital you have in your account. However, most online brokers will still open this standard account for you if you have more than $10,000.

With gold leverage of 100:1, you will borrow from your broker (with leverage of 100:1, your broker gives you $100 dollars for every $1 dollar that you have in your account, therefore if you have $1,000, the broker will give you $100 dollars of leverage for each $1 dollar you have, meaning after leverage you will have $1,000*100=$100,000 which you can then use to trade gold).

Micro XAUUSD Trading Accounts Types Described

Gold Account Explanation - Micro Account. Micro Accounts use lot sizes of only equivalent one hundredth that of a trading standard lot. These Micro accounts are often appropriate for traders without a lot of gold capital & can sometimes be opened with only a $5 minimum balance.

This Micro account option allows the trader to open trades in micro lots. 1 gold trading micro lot is one-tenth of a trading mini lot and one hundredth of a trading standard lot.

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

In trading, one gold trading standard lot is the standard transaction minimum of instrument traded in the market. But many brokers offer fractions of this gold trading standard lot to enable more retail traders to access the market. Being able to offer gold trading micro lots reduces the minimum gold trade transaction size thus giving the beginners and also those traders without a lot of gold capital to begin trading and get a feel of the market without investing a lot of gold capital.

There are learn trading online tutorials that a trader can read even before opening a real xauusd account, and to get extra practice in trading before opening a real account a beginner trader should open a practice Gold demo practice account with a broker - so as to practice placing gold trade transactions before opening a real xauusd account & investing with real money.

During the training period using the practice account, the beginner trader will learn the key factors needed to succeed in gold trading such as: gold education, gold money management, plan & gold systems.

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