Today, global financial markets are accessible to everyone. Thanks to the rapid growth of Forex, residents of South Africa and Nigeria may profit from trades via the Internet. This remote work is rewarding to those who are ready to learn and hone their foresight. Entry is affordable – some accounts require a minimum deposit of just $10.
Classified like cent accounts, these arrangements are a perfect entry opportunity. Rookies may get a taste of live trading without substantial risk. Low investment requirements make it easier for some categories of traders to begin their careers. Here is how the system works in the region.
Characteristics of Cent Accounts
Not every broker in Africa offers cent accounts. Generally, their structure is similar to other categories in terms of currencies, leverage, and rules. Most accounts are denominated in US cents, Euro cents, or GBP pence.
There are also region-specific options. For instance, Nigerian clients may register cent accounts denominated in the Nigerian kobo. These require a minimum deposit of NGN 2,000. Here are the key parameters, aside from deposit requirements:
● spreads (the difference between Ask and Bid prices);
● allowed number of trades;
● allowed volume of trades;
● range of instruments;
● leverage conditions.
Cent accounts constitute the most affordable avenue of live trading. There is no universal system of characteristics. Different brokers are free to impose their own rules on cent schemes. It is an opportunity for inexperienced clients to start real work on ForexTime MetaTrader 5 that is one of the most popular trading terminals today. Aside from currencies, it allows stock trading, CFD trading, spot metals, and more.
2006 saw the emergence of the concept. The idea was adapted for live trading and it has been popular ever since. Most leading brokers around the world include it in their offerings.
Aside from making entry insanely affordable, cent accounts have another vital benefit. They allow a gradual transition from demo to live trading. The former is the mandatory initial phase for every neophyte. Before depositing real money for trades, they explore their trading terminals in the simulated mode. It is never advisable to delve into actual live trading right away.
In this regard, cent accounts serve as an intermediate link between education and large-volume trading. The FXTM broker allows every local client to try buying and selling real currencies with limited risk.
While demo accounts allow novices to gain experience, live trading still requires some psychological adaptation. When real money comes into play, humans are prone to emotional behavior and irrational decisions. In the realm of Forex, these may result in financial loss. This is why traders should increase volumes step-by-step rather than plunge headlong.
With a cent account, the switch is more gradual. Low deposits are important as they limit real risk. While demo accounts are educational, they bring neither profit nor loss. A cent account is the first step towards tangible results, as clients of brokerage firms start trading with real money and leverage boosts their returns.
Trading Conditions: Overview
A cent account holder may open a position that amounts to only 0.01 of a standard lot. Meanwhile, as the balance is always denominated in cents, they get used to working with four- or five-digit sums. This is a convenient start and a way to adapt to live trading.
Despite their moderate size, cent accounts also offer leverage. This means traders may open positions for more than they deposit. Also known as trading on margin, this arrangement is popular worldwide.
These ratios usually start with 1:25, and they can be spectacular (1:1,000). For instance, a client may open positions for USD 10,000 with just $10 of their own.
While the appeal is undeniable, novices should be extra careful. When brokers boost their buying power, risks also grow up. A poor decision can wipe their account, so caution is paramount. Even though losses are limited, they are still possible.
Use Cent Accounts Wisely
While cent accounts have moderate risks, they should never be perceived as a replacement for training. Every trader needs to use the demo mode until they feel confident managing positions. Nothing beats the simulated system as it offers risk-free practice. Demo accounts are easy to register via a basic form on brokerage websites.