Accounts Types Explained
Standard Trading Account & Micro Trading Account
In recent years retail bitcoin trading has grown hugely in popularity & the demand for different types of cryptocurrency trading accounts has grown. There are many different trading account types available to any trader who wants to invest in the cryptocurrency market - Bitcoin Account Explanation.
The market is a highly leveraged market for speculating on price valuations. Traders can purchase large amounts of bitcoin trading units using leverage - Bitcoin Trading Leverage is what makes bitcoin trading attractive to many online traders - with bitcoin trading leverage a trader can make more profits or losses because they use less of their capital & borrow the rest.
There are different types of cryptocurrency trading accounts available to help investors better manage their account capital as well as their trade transactions.
How a Real Bitcoin Account Looks Like
It is therefore important that the traders consider what they want to get out of their bitcoin trading, before deciding on the trading account type to open.
Shown Below is a comparison of the two types of trading accounts commonly used to trade bitcoin. The cryptocurrency account types review below explains the different features of each of the types of accounts.
1. Standard Bitcoin Accounts Explained
Account Meaning - Standard Cryptocurrency Account. A Standard Account is denominated in US Dollars and bitcoin trade transactions are placed using standard lots. One lot is also known as one contract. Minimum opening capital - at least $10,000 USD.
1 contract refers to the minimum size of a single bitcoin trade transaction. This account option is the most suitable for traders with enough capital to invest in trading - this account option requires $10,000 & $50,000 dollars as starting capital, for this standard cryptocurrency account the trader will not be undercapitalized and with good money management guidelines and money management strategies, this standard account option has the best chance for profitability because it is not undercapitalized. Under capitalization is what makes most traders in bitcoin trading not profitable.
It is not recommended to open a standard account unless you've an account balance of at between $10,000 minimum & $50,000.
Professional Money Managers recommend $50,000 Dollars minimum to open this standard account and only opening trades with only 2% of the trading capital you have in your cryptocurrency trading account. However, most online crypto brokers will still open this standard account for you if you have more than $10,000.
With bitcoin leverage of 100:1, you will borrow from your crypto broker (with leverage of 100:1, your crypto broker gives you $100 dollars for every $1 dollar that you have in your trading account, therefore if you have $1,000, the broker will give you $100 dollars of leverage for every $1 dollar you have, meaning after cryptocurrency leverage you will have $1,000*100=$100,000 which you can then use to trade bitcoin).
2. Micro Account Explained
Bitcoin Account Meaning - Micro Account. Micro Trading Accounts use lot sizes of only equivalent one hundredth that of a bitcoin trading standard lot. These Micro trading accounts are often appropriate for traders without a lot of bitcoin capital & can sometimes be opened with only a $5 minimum balance.
This Micro account option allows the trader to open trades in micro lots. 1 bitcoin trading micro lot is one-tenth of a bitcoin trading mini lot and one hundredth of a bitcoin trading standard lot.
This Micro account option is generally best suited for account equity balances that are between $1,000 & $5,000
In bitcoin trading, one bitcoin trading standard lot is the standard transaction minimum of crypto instrument traded in the btcusd trading market. But many crypto brokers offer fractions of this bitcoin trading standard lot to enable more retail traders to access the btcusd market. Being able to offer bitcoin trading micro lots reduces the minimum bitcoin trade transaction size thus giving the cryptocurrency beginner traders and also those traders without a lot of bitcoin trading capital to start trading and get a feel of the btcusd trading market without investing a lot of bitcoin trading capital.
There are learn bitcoin online tutorials that a trader can read even before opening a real trading account, and to get extra practice in bitcoin trading before opening a real account a beginner trader should open a practice Bitcoin demo trading practice account with a broker - so as to practice placing bitcoin trade transactions before opening a real cryptocurrency account and investing with real money.
During the bitcoin trading training period using the trading demo practice account, the beginner trader will learn the key factors needed to succeed in bitcoin trading such as: bitcoin trading education, bitcoin money management, bitcoin trading plan & trading systems.
The types of trading strategies used and the skills required for any of these 2 cryptocurrency trading accounts are essentially the same - those bitcoin trading skills and trading strategies required for the Standard account or Micro account are the same the only difference to be adjusted are the money management guidelines for each trading account type.
