Cents meaning? Cent is a type of trading account commonly used on Forex exchanges today. In particular, this type of account is also loved by new investors. However, to understand the process by which Cent account operates, as well as understand how to use Cent effectively. Traders need to understand the advantages and limitations of the Cent account. In this article, let’s learn about the cents meaning account and other related information with Learn Forex Trading
Definition of the term cents meaning?
In the foreign exchange market, people define Cent as a type of trading account. This account is designed for beginner traders with little capital and little practical experience. The purpose of the Cent account is to help traders experience trading with real market conditions. At the same time, minimize all risks in the investment process of failure.
The reason this account is called Cent is because it records the currency unit Cent. When customers deposit money into their account, the amount will be automatically converted to Cent, in which 1 Cent = 0.01 USD. Nowadays, Cent account has become a top priority choice for new traders. Therefore, it can be considered one of the important criteria to consider when choosing a broker.
See more: Successful what is forex exchange trading?
What are the trading conditions on Cent account forex?
To be able to trade on Cent account Forex, traders need to meet several conditions. So what are the conditions to be able to trade with a cents meaning account?
- Minimum deposit amount: Cent requires a very low initial deposit. Walls start from only 1 USD and when this amount is deposited it will be converted to Cents, equivalent to 100 Cents.
- Trade size: Cent accounts allow traders to trade smaller trade sizes, typically 0.01 Lot or more.
- Minimum and maximum trading volume: Corresponds to 0.01 Lot Cent (about 0.0001 standard lots) and maximum from 100-200 Lot Cent.
- Spread: Cent account applies floating spreads and has an average spread of 1 pip for currency pairs.
- Trading products: On Cent accounts, traders can only trade gold and Forex.
- Trading platform: Provided on MetaTrader platforms including MT4 and MT5.
Compare Cent accounts with Standard and ECN accounts
To help traders better understand the differences between the Standard account and the cents meaning account? The following is a basic comparison table between these two account types:
| Element | Cent account | Standard account |
| Transaction size | Cent Lot | Lot |
| Transaction fees | Lower | Higher |
| Account size | Small | Bigger |
| Transaction speed | Slow | Fast |
| Lever | Lower | Higher |
| Spread | Higher | Lower |
Evaluation when trading with Cent account
After exploring the question cents meaning, traders next need to clearly understand its advantages and limitations. This helps traders evaluate and make decisions that suit their needs.
What are the advantages of Cent account forex?
Some outstanding advantages of the Cent account that traders need to know:
- Small initial capital: With only 1 USD, traders can start trading. Thereby, limiting the risk of failed transactions.
- Small trading volume: For standard accounts, the trading volume is 0.01 Lot. However, when using Cent, traders can trade with many times lower volume.
- Limit risks and losses: With a small amount of capital and trading volume, investors will be able to minimize losses when transactions go astray.
- Is the perfect choice to start real trading: After testing with the Demo account, traders can choose Cent to start real trading. This can help traders achieve better investment performance.
Limitations when using Cent account Forex
However, Cent account possesses many attractive advantages for traders. However, it still has some disadvantages that traders should be aware of:
- Trading conditions are not optimal because price differences and transaction costs are often very high.
- Cent accounts still have the same possibility of losing real money as standard accounts.
- Trading with small account sizes and trading volumes means low profits.
Principles when trading with cents meaning account?
If you want to trade with Cent account most effectively. Never ignore the principles, but apply and strictly follow them. So what are the strategies when trading with the cents meaning account?
- Building a suitable system: This is one of the first factors to help trading succeed. You need to create for yourself a trading system that suits your trading style and purpose. This ensures efficiency and increases the winning rate for traders.
- Invest with ideal leverage: Often investors will use high leverage to maximize profits when trading on Cent. However, if following a short-term strategy, traders need to choose a reasonable leverage ratio.
- Enter orders with small volumes: You should trade with a maximum volume of 0.03 Lots. The goal is to prepare for trading on a real account with minimal risk.
See more: Instructions for registering an XTB account
The top 3 Forex exchanges provide the most reputable Cent accounts for traders
Normally, current Forex exchanges provide Cent accounts for traders. That unintentionally makes it difficult for traders to choose a reputable trading address. So, here are the 3 Forex brokers that provide the best Cent accounts that you can consider:
- Exness exchange: This is one of the leading forex brokers in the industry. Exness is licensed to operate by financial regulators around the world. Besides, Exness is also noted for its extremely competitive trading costs in the market.
- FBS Platform: This is the next name on the list of reputable Cent account providers. FBS is not only famous for its strong promotional activities but also offers traders many attractive promotional services. Established in 2009, FBS has never disappointed its customers.
- ForexTime (FXTM): Considered the most prestigious and current foreign exchange exchange today. Providing services to more than 1 million customers from 150 countries and licensed by reputable agencies: FCA, CySEC… Therefore, FXTM has received the trust of many investors around the world.
summary
Above is the basic information to answer the question cents meaning? Hopefully, the sharing of Learn Forex Trading will help investors gain the most useful knowledge about Cent accounts. Besides, don’t forget to learn more about what is equity and what is balance … Thereby, you can decide to choose the most suitable account type for yourself.
FAQs:
Cents meaning and should I use a Cent account or not?
Cent is a trading account type preferred by traders. Using a Cent account will bring investors many benefits such as reduced risk, and low initial capital…
How much initial capital is needed to open a Cent account?
The initial capital to open a Cent account is lower than other account types. Usually only from 1 USD, depending on the broker.
What types of assets can be traded on cents meaning?
Traders can use Cent accounts to trade Forex currency pairs and gold.
