In this article, we will discuss the difference between standard cent account and standard account, along with their advantages and disadvantages; therefore, you can find the one that suits you the most.
Every trader should carefully consider which broker to choose; also the trading account that they offer because it can directly affect the way they manage their account balance. As the CFD Trading market is packed with various traders, brokers usually provide many account types. Therefore, you have to make sure that you pick the right choice.
Typically, a CFD Trading broker offers several trading account options; each comes with different requirements and forms of services. As a trader, it’s imperative to learn the specification for each type; therefore, you can decide which one matches your needs. Among the many categories offered, there are two fascinating types that many traders use; standard cent accounts and standard accounts. So what are the differences between those two, and which one is more worth your money? We will discuss everything you need to know about it in this article.
This cent account type was first introduced in 2006 to facilitate traders who started their trading journey with small capital. Standard Cent recommended for newer traders or those wishing to test specific market conditions. Most of the traders would use the cent account as the transitional stage from a CFD Trading demo account to the real trading account. A standard cent account is also excellent for testing and developing your trading strategy. It uses the minimum trade volume for Standard Cent accounts as 0.01 cent lots which are 100 times smaller than 0.01 standard lots. Cent accounts have a maximum volume per order of 200 cent lots 24 hours a day but are still 100 times smaller than standard lots. The maximum number of pending orders is 50, up to 1,000 in total (sum of open and pending orders). The risk level is considered low compared to other accounts because even if it feels like trading with huge capital, you don’t’ put that much money in the open.
A standard account is the most common account in CFD Trading. Standard accounts provide a wide range of financial instruments compared to Standard Cent accounts. Standard accounts usually have a minimum deposit limit of around $100 – $500, and they will allow you to trade mini-lots. It has a minimum trade volume of 0.01 lot, maximum trade volumes per order is 200 lots per day. It gives Standard accounts an edge over Cent in terms of potential trading volumes.
Which Type of Account is Right for You?
Both cent and standard accounts have their own distinctive benefits; therefore, you should pick the one that suits you the most as a trader.
If you have limited CFD Trading experience, then a standard cent account is worth your money. Brokers will allow you to enter the market with a small minimum deposit limit ($100 or less). As these accounts have a low barrier to entry; however, there are restrictions on your trading activity. Most cent accounts limit you to trading nano or micro lots. It helps you to control your risk-levels, making these types of accounts perfect for beginner traders. Although low-risk comes with low reward and is probably insignificant to your overall balance, it is still better than getting nothing (like in the demo account). The low-risk environment is also beneficial to experience different strategies, check the quality of a broker’s platform, and improve your trading skills.
On the other hand, if you are a more experienced trader with adequate capital and proper trading strategy, then you should choose the standard account. You can maximize the use of the many services that come along with a standard account and gain high profits along the way. With a better risk management system, traders will reduce the potential loss and reach your trading goal. Also, it’s easy to find a broker that offers standard accounts. The main advantage of using a standard account is that most brokers provide better services and more perks for account holders; another advantage is that you can get higher potential gains if you manage your trade well.