Broker to Trading

1 standard lot in Forex is $100,000 (or more generally 100,000 units of a currency). A cent account is denominated in cents and 1 lot = $1,000 (since 100,000 cents = $1,000). Thus 0.1 lots on this account is really 0.001 standard lots and has a pip value of 1 cent, using a USD example on this page with a pip value of $10 per standard lot (the actual value of a pip per lot can vary depending on the account currency and the Forex pair).

A broker may allow even smaller trade sizes by providing micro lot cent accounts, where one pip is worth 0.1 cents (0.0001 standard lots). To be clear, its not called a cent account because 1 pip = 1 cent, but because it is denominated in cents, with a lot size of 1,000. So a cent account can have trade sizes where one pip is worth less than a cent.

In the past, brokers used to offer specific accounts for smaller lot sizes, for example mini (0.1 lots) and micro (0.01 lots) lot accounts. Forex brokers these days tend to simply have a minimum lot size of 0.01 lots for their Standard account types. Thus the trader can build trades with small or higher trade sizes as they wish.

One advantage of smaller trade sizes is that it can make trading feasible and comfortable for smaller account sizes. Another important potential advantage is that it can help the trader trade with reduced leverage (increasing leverage increases risk). Leverage helps traders trade with smaller account sizes, but increasing their exposure to adverse moves against the traded position.

As leverage has been restricted to a maximum of for Forex in the European Economic Area (EEA), this reduces the capacity to use leverage to trade with smaller account sizes. Thus cent accounts in this respect can be seen as the new micro accounts at least in the EEA, as they allow position sizes 1/10th of the size of a micro account.

Another potential use for a cent account is to practice trading in the real market possibly after using a CFD trading demo account. However unlike a demo account, real funds are being risked in a cent account. Cent accounts may have a very low minimum deposit and will be separate accounts. Other accounts which have a higher minimum trade size (for example micro lot), can have higher minimum deposit requirements. Brokers may also offer accounts for traders who wish to trade Forex with big accounts. Traders can also generally place orders with a bigger trade size on a cent account, but there is typically a limit on the maximum order size, relative to other account types.

The Forex market moves in complex ways and a cent account can be a way for all traders to understand it, without having to place trades with a high pip value. The actual value of a pip move can either add to the account or deplete it, as Forex pairs change value. With higher pip values an account can rapidly be depleted. In the EEA the stop out is set at 50% of the account, thus positions will automatically be closed if the account reaches this level. Of course this possibility also exists with a cent account, with a small account size.

So the relative value of a pip to the account size is an important consideration when trading Forex, which tends to retrace against the traded direction and can make rapid moves up or down. This can be seen is news trading or other volatile times in this markets, when very rapid moves can happen. One way to tackle this is to use a stop-loss, another additional way is to get the balance right of account value, positions opened and trade size. The brokers in this table all offer cent accounts as well as other account types and are well established, regulated Forex brokers.

Best Forex Cent Account Forex Broker

The pick from the table of the best cent account Forex broker is XM. XM offers both MetaTrader 4 (MT4) and MetaTrader 5 (MT5). XM calls its 'cent' account a Micro account. MT4 and MT5 let the broker denominate an account in cents, thus allowing a micro lot to be smaller than a micro lot on a standard account (specifically 1/100th of the size, turning 0.01 standard lots into 0.0001 standard lots).

In tandem with a low minimum trade size, XM offers a very low minimum deposit ($5). Thus traders may trade with a smaller account size if they wish. Small trade sizes can potentially offer the trader flexibility in terms of minimum deposit, account size and what markets they can trade. On MT5, XM has a relatively large number of markets to trade (1000+), in addition to Forex pairs.

XM supports Forex traders by offering these platform, allowing small trade sizes, and letting the trader use and build Expert Advisors (EAs) to automate trading, if they want to automate their trading. When signing up for an account the trader chooses which platform to trade from, but they can create further accounts later as they wish, if they want to try the other platform.