What Is a Forex Cent Account? Learn the Basics!

Sure, you can create a demo account – but playing with imaginary money gets boring. Opening a Forex Cent Account will help you learn about trading while investing real money.

What’s a Forex Cent Account?

It’s a minimal trading account that uses cents for transactions. There’s an entire world of possibilities for beginners using this type of account. A Forex Cent Account is a beginner account that uses cents instead of dollars as a basic unit.

That may seem like a small difference to make a fuss about – but it makes a big difference when trading! When you open a Forex Cent Account, your balance will be the first thing you notice. Standard accounts will show what you have in dollars: $1, $10, $100, etc.

With a cent account, you’ll see your balance in cents instead: 100 cents, 1,000 cents, 10,000 cents, etc. Splitting your balance in cents instead of dollars helps you organize your trades in smaller amounts. That way, you can make plenty of trades with very little money – and better understand what you’re doing when you’re just starting.

Several wealthy traders have started this way! For example, Tim Grittani started with less than $1 per trade and became a millionaire. You can start a forex cent account with as little as $1, giving you 100 cents to trade. While you can profit without investing money, this account is a great learning tool.

Pros and Cons of a Forex Cent Account

Pros

• Perfect for beginners: Opening a forex cent account wasn’t possible until 2006. Experts then realized beginning traders needed a new type of account to learn about trading without wasting money. This makes forex cent accounts perfect for beginners – experts invented them just for that purpose.
• Low risk: Nine in ten beginner traders lose all their money. It’s part of the process. You can try to go all out and risk everything early on – or you can play it smart with a forex cent account and trade with only a little money as you learn valuable lessons.
• It’s a stepping stone: The real purpose of a cent account is not to make a big profit. That comes later! For now, you have to learn to play the game. A cent account is the perfect middle ground between a demo (using imaginary money) and a standard account (using more money than you should).

Cons

• Small profits: You’re not going to make much money with a forex cent account. You’re investing in cents – so you will make a few more cents in return. That will feel discouraging at first. Don’t let that fool you! Try to put it in perspective and think about how much money you would’ve lost if you invested dollars instead of cents. People usually need to invest a minimum of $500 or $1000 before making considerable profits.
• Easy to develop bad habits: Overconfidence in your trades happens since you’re spending cents. You have to treat 1000 cents as if they were $1000 – otherwise, you will develop bad habits that are hard to eliminate in the long run. Make sure you treat a forex cent account as a standard account.
• Difficult to stop using: Another big problem with using a forex cent account is getting used to it. You start to get comfortable with it – and may see investing big dollars as too risky or problematic. Remember, a forex cent account is a learning tool – not the real thing!

Are there any differences between a Standard Account and a Forex Cent Account?

There are two differences between a standard and a cent account: the what and where of things are different – what you use to invest and where you can do so. The first thing you already know. Forex cent accounts use cents as a basic unit. And while that helps you to better learn about trading – it also limits your opportunities to trade.

How does a forex cent account limit your opportunities? 

Well, there are a lot of markets that won’t allow you to trade using a small amount of money. So, you’ll have limited options of where to invest that way. For example, most forex brokers ask for a minimum initial deposit of between $100 and $25,000!

That shouldn’t be a problem, though! It’s good to have fewer options early on. Focus on learning about the basics instead of feeling overwhelmed with many options.