What type of account is best to open for stock trading?

After you have registered with one of the stock brokers, you need to open a trading account.

This is quite an important point, because the right choice can help not only improve trading efficiency, but also save money.

True, choosing an account type sometimes raises questions for a novice trader, so we will try to figure out which option is best suited to your situation.

Today, most brokers offer up to five different account options, each of which has its own advantages and disadvantages.

 

The most common types of brokerage accounts

Demo accounts - exist at any brokerage company, trading is carried out with virtual money, designed to familiarize yourself with the functionality of the trading platform and practice:

You can also test various scripts on demo accounts, ranging from simple technical analysis indicators to complex advisors.  

You can open an unlimited number of such accounts; often when opening you can choose which option you want to use - Demo-Standard, Demo-ECN, etc.

Cent accounts are already real accounts, but using cents as currency. That is, the account balance is displayed in cents, and accordingly the volumes of proposed transactions are 100 times less than on a standard account:

Trading on cent accounts is carried out using mini lots, which makes it possible to test strategies while risking less money on real money.

Not all brokerages have this option, brokers with cent accounts - https://time-forex.com/centovye-brokery

The standard type is a normal account with standard trading conditions; usually, to get started, you need to top up your balance with a minimum amount.

The main advantage of this account is the minimum deposit size; depending on the broker, it can be as little as $10. At the same time, trading conditions here leave much to be desired.

A standard account is suitable for medium-term trading if you do not have enough funds to open an account of a higher category.

It does not have any special advantages, the name of the account itself speaks of this; often on such accounts transactions can be executed under the Dealing Desk

ECN accounts - when working on this type of account, the Electronic Communication Network system is used, which involves the transfer of transactions to the exchange bypassing intermediaries:

Thanks to this, not only the speed of transactions increases many times over, but also trading conditions are significantly improved, and the size of the spread or commissions for opening transactions is reduced.

This option is suitable for almost any strategy, including scalping on the shortest time frames.

If we talk about the disadvantages, one of them is the high requirements for the minimum deposit, usually an amount of $1000 or more.

Promotion open an ECN account with a deposit of $10 - https://time-forex.com/novosti/otkryt-ecn-schet

In addition, not all brokerage companies have ECN accounts in their arsenal; brokers with ECN accounts - https://time-forex.com/vsebrokery/ecn-brokery

In addition to the options listed above, there are also so-called VIP or PRO accounts, which are essentially the same as ECN, but with even more improved trading conditions. As a rule, this means a smaller spread, no restrictions and an individual manager.

More information about trading with VIP status - https://time-forex.com/interes/vip-akkaunt

It is clear that a VIP account is the best option, but the deposit requirements here range from $10,000 and above.