What type of account is best to open for stock trading?
Once you have registered with one of the stock brokers, you will need to open a trading account.
This is a very important point, because the right choice can help not only increase trading efficiency, but also save money.
However, choosing an account type can sometimes be confusing for beginning traders, so let's try to figure out which option is best suited to your situation.
Today, most brokers offer up to five different account options, each with its own advantages and disadvantages.
The most common types of brokerage accounts
Demo accounts are available at any brokerage company. Trading is conducted with virtual money and is designed for familiarization with the trading platform's functionality and training:
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, and often, when opening them, you can choose which option you want to use – Demo-Standard, Demo-ECN, etc.
Cent accounts are real accounts, but they use cents as the currency. This means the account balance is displayed in cents, and the offered trade volumes are 100 times smaller than on a standard account:
Cent accounts are traded using mini lots, allowing you to test strategies with real money while risking less.
Not all brokerages offer this option; brokers with cent accounts can be found at 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, which can be as low as $10 depending on the broker. However, the trading conditions leave much to be desired.
A standard account is suitable for medium-term trading if you do not have enough funds to open a higher category account.
It does not have any special advantages, the account name itself indicates this, often on such accounts transactions can be executed under the Dealing Desk
ECN accounts – this type of account utilizes the Electronic Communication Network system, which allows for transactions to be sent to the exchange without intermediaries:
This not only increases the speed of transactions, but also significantly improves trading conditions and reduces spreads and commissions for opening transactions.
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 $1,000.
Open an ECN account with a deposit of $10 or more - 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 ECN accounts but with even more advanced trading conditions. Typically, these include a smaller spread, no restrictions, and a dedicated account manager.
Learn more about trading with VIP status - https://time-forex.com/interes/vip-akkaunt
Obviously, the VIP account is the best option, but the deposit requirements here are $10,000 and up.
