Beginner's Guide to XM Account Types

Julio: Choose micro account if you want to trade with only $5 to get the best trading condition and not getting margin call earlier. The margin call in XM is at 50% level and 20% stop out. Meanwhile, the safe leverage for micro traders is 1:200 (source :What is the best leverage for micro).

With that trading condition, you are ready to count the free margin. What you needed now is to know margin that you use to trade. You can use the margin calculator at this website. If you use 0.01 lot micro account, you will get $ 0.0544. And now, to find equity just count: $5.000-$0.0544 = $4.9456 (Equity)

Now you are ready to count free margin. Use this Formula to know the percentage of free margin : Equity/Margin x 100 % ($4.9456/$0.0544 x 100% ) = 9091.1%! So, it is very posible and yet limitless to trade with XM Micro account with just $5!

Varuna: There is no requirement to get leverage 1:888 (now, instead of 888, XM offers leverage 1:1000). How to activate the leverages? It is very simple to confirm the maximum leverage of your XM Group account. Log in to MT4 using any account you have opened. Hover over the account in the "Browser" on the left side of MT4. Maximum leverage like "1:888" or "1:1000" is displayed in the pop-up screen that appears. Choose that and voila, you are ready to trade with that leverage.

Careful:
High leverage can be a double-edged sword if you don't use it wisely!

Samuel Raya: Sorry, why leverage will be double-edged sword? I dont understand that because not only you, many traders also said about this and even the comments above recommended to use leverage 1:200  and not recommended to use leverage 1:888. 

What kind of risk that I get if I use high leverage at trading? Thank you, hope you can answer my question.

Agus:

A double-edged sword means it is possible to kill an enemy in front of you but can injure you if the enemy retaliates. So leverage can help you to trade, but also because of this you can be called on margin. Why? Because with high leverage you will get very high buying power and you can trade with multiple positions at the same time. But at the same time, the pips that give you profit and loss don't have that power either. This means that the value of 1 pip with or without leverage is always the same (eg: 1 standard pip = $10).

and floating loss can have very high make very huge margin impact and imagine if you can trade up to 10 times with 10$ for example, you can get margin call with only 2 floating loss trades!! Therefore, high leverage can be a trap to get traders to overtrade.

Samuel Raya: Agree! This is why activating high margins requires a special step just like the XM brokers do. It is better to have medium leverage than high or low leverage. And in my opinion, leverage has 1:888 or 1:1000 are dangerous trading tools and require very careful and wise use. So the best leverage for beginners is the leverage that has at least 1:100.

@Ahmed: Trading with micro lots (0.01 lots) has some cool advantages over cent lots, and XM's micro account feature takes risk management and flexibility to a whole new level. With micro lots, you can be super precise in sizing your positions. It's great for traders with smaller account balances or those who want to play it safe. Plus, it saves you from the higher risks that come with standard lot sizes. No need to worry about big potential losses here!

The best part? Micro lots give you more freedom. You have better control over your trade sizes, so you can manage your positions like a pro. Set tight stop-loss levels, trail your stops – you name it! It's like having a personalized risk management strategy at your fingertips.

Micro lots are perfect for learning and testing strategies too. You can dive into live trading without breaking the bank. Gain experience, build confidence, and fine-tune your skills without putting a ton of money on the line.

With XM's micro account, you get the power to manage risks and trade on your terms. It's all about being precise, flexible, and smart about your trading decisions.

The micro account is like a basic version of the standard one. It allows smaller trade volumes, starting from 0.01 lot. But brokers may limit things like maximum lot size and tradable assets. Standard accounts offer more freedom and flexibility, with wider options and fewer restrictions. There's also a difference in spreads and commissions. So, the micro account is basically a standard account with some limitations set by the broker.

Hey, to know if you've got enough dough to trade, look out for two things.

First, check the margin call and stop levels set by your broker. Then, calculate your own margin using this formula:

((Equity - Margin) / Margin) x 100%

Equity is your deposit, and margin is what you're using in trading. You can find margin with this formula: (Price x Lot Size / Leverage) or just use a Forex Margin Calculator.

For all the deets on margin calls, check out this article: Forex Margin Call and Stop Out.

Now, for example, say you're trading with $5, leverage 1:888, and you're doing EUR/USD with a standard account and 0.01 lot. Your margin will be $1.32, and your margin level is 278%.

For XM brokers, the margin call level is 50%, and the stop-out level is 20%. So, if you trade twice, your margin call level drops to 178%. Remember, keep it at 0.01 lot!

For beginners, using a $5 deposit for practice is better. It's hard to make profits with that small amount, especially when you factor in the spread.

Sure, you can trade with $5, but you gotta make sure both trades are profitable. If you lose on one, your margin gets limited, and if you don't manage your risk, you could end up losing even more.

Let's say you're trading with 0.01 lots and leverage of 1:888. The required margin is $1.32 and the pip value is $0.10.

If you lose 25 pips, that's a loss of $2.5, leaving you with a free margin of $1.18. Lose 30 pips, and you hit the margin call at 89%. So, you gotta be super careful, especially with day trading, 'cause your room for losses is very small.

Here's what you need to know about choosing an account with XM.

First off, they offer MetaTrader 4 and MetaTrader 5 platforms, so pick the one you like best.

Now, they've got three main account types: Micro, Standard, and XM Ultra Low. Micro is for newbies starting with small amounts, Standard is for more experienced traders with larger contract sizes, and Ultra Low is for tight spreads without any commissions.

Check out the leverage they offer, too. High leverage can bring bigger profits but also bigger risks, so choose wisely.

And don't forget to look at what you can trade - Forex, CFDs, or cryptocurrencies.

Lastly, consider the trading conditions like spreads, commissions, and trading hours for each account type. That's the lowdown!

If you're into scalping, XM's Ultra Low account could be perfect for you. It's made for scalping and has super low spreads starting from 0.0 pips. Plus, there's no commission, so it's great for keeping trading costs down.

XM offers tight spreads, which is a big plus for scalpers. And you can use hedging and scalping strategies, taking advantage of short-term price movements.

As a newbie scalper, the Ultra Low account might be your best bet. Just remember to pick an account that fits your needs and goals.

Yeah, dude, XM doesn't take US traders because of US regulations, like the CFTA. Your regulator doesn't allow dealing with unregulated brokers, and that's because they want everyone paying their taxes. If you're in the US and try to sign up, they'll probably tell you they can't accept you because of the rules. And if you try to sneak in, your documents will just hang in limbo. So, you can't open an account with XM directly if you're in the US.

Yeah, not many brokers are cool with US traders. One big reason is the strict rules the US government lays down. They passed the Dodd-Frank Act in 2010, making forex brokers register with the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), which is a hassle and costs a lot.

Also, brokers gotta keep up with a bunch of other stuff like minimum capital and regular financial reports, which is a pain. So, lots of them just skip dealing with US clients.

But hey, those rules are there to keep traders safe and make sure the forex market is fair and legit. So, it's smart to go with a broker that follows the rules, even if they don't work with US folks.

Another thing, in the US, brokers can only offer a max leverage of 50:1 on major currency pairs and 20:1 on minor pairs. That's way less than what brokers in other countries offer, like Australia and Europe, where you can get up to 500:1. So, it's tough for traders in the US to make big profits with such low leverage. That's why some of them go for offshore brokers that offer more leverage.

All these rules are meant to protect traders from scams and cybercrime.

In the context of XM's Micro Account, when we talk about 1,000 units, it essentially refers to the quantity of the chosen base currency. So, if you're dealing with USD, for instance, 1,000 units would mean $1,000. The proportionality comes into play if you use a different unit size; for example, if you were dealing with 10,000 units, it would be $10,000.

Now, regarding the leverage of 1:888, it's crucial to approach it with caution, especially for beginners. While high leverage can amplify potential profits, it also magnifies the risks. Using such high leverage requires meticulous risk management, as the same proportion that can multiply gains can equally increase losses. For beginners, it's often recommended to start with lower leverage and gradually increase as they gain experience and confidence. Always trade within your comfort zone and employ risk management strategies to ensure a safe trading environment.

Let me break it down for you! First off, if you're looking to kickstart your trading journey without diving in with a massive stash, the Micro account is where it's at. You gotta get the lowdown on this account – know the deal with trading costs, the leverage they offer, and what's up with the spreads. It's all about making a savvy choice, you feel me? Now, the Standard account is like the all-around champ, catering to a wide range of traders. It's got its own perks with different trading costs and leverage options to spice things up.

But, if you're all about them low spreads and need things to move in the blink of an eye, the XM Zero account might be your jam. Take a deep dive into the nitty-gritty details of each account type to see if they match up with what a scalper like you needs. Check out the costs, see what leverage is up for grabs, and get the lowdown on those spreads. I'd say, especially if you've got some trading stripes, give the Zero account a whirl for your scalping game.

Hey there, in my opinion, when choosing the ideal XM account type for your trading goals, several key factors come into play. It's crucial to understand how the features and benefits differ among the Micro, Standard, and XM Zero accounts, particularly in terms of trading costs, leverage, spreads, and other essential criteria. Evaluating your own risk tolerance and trading strategies is equally important to determine which account type aligns best with your needs.

Practical considerations also come into play when opening and funding an XM account. Exploring the educational and research resources offered by XM can significantly contribute to your trading success. Taking advantage of these resources enhances your understanding of the market and can inform your decision-making process. FYI, you can read about the first step in trading : Start Forex Trading: Three Steps To Place Your First Order before you choose your broker!

Hey there! Hedging in trading involves offsetting the risk of one investment by making a second investment. Now, concerning XM's accounts designed for beginners like Micro, Standard, and Ultra Low Micro, the restriction on hedging could be aimed at simplifying the trading experience for novice traders. Hedging strategies can be complex and may not align with the learning objectives or risk tolerance of beginners. (read : Why Hedging is Not Allowed in Some Countries?)

As for the risks associated with hedging without caution, it's essential to understand that while hedging can mitigate some risks, it's not foolproof. Poorly executed hedging strategies could lead to reduced profits or even losses. Additionally, hedging might involve additional costs such as spreads or fees, impacting the overall returns. Novice traders may lack the experience needed to navigate the complexities of hedging effectively, making it potentially risky for them.

Hey there! In a Micro account, where 1 micro lot represents 1,000 units of the base currency, trading 0.1 lot would equate to 100 units of the base currency (0.1 lot x 1,000 units/lot = 100 units).

On the other hand, in a Standard account, where 1 standard lot equals 100,000 units of the base currency, trading 0.1 lot would amount to 10,000 units of the base currency (0.1 lot x 100,000 units/lot = 10,000 units).

So, even though you're trading the same lot size of 0.1, there's a significant difference in the actual amount of currency being traded between the Micro and Standard accounts. In this case, trading 0.1 lot in a Standard account involves a much larger volume of currency compared to trading the same lot size in a Micro account. (also read this article about micro, so you will know instantly the different between micro and standard : Cent Vs Micro Account, Which One Is Better?)

Basically, XM is giving us a buffet of account types to choose from, while some other brokers might just have one or two options on the menu. How does this affect us? Well, with XM, we've got more freedom to customize our trading experience. We can pick the account that suits our needs best and access all the cool features and tools we want.

But, here's the thing: having so many choices can be a bit overwhelming, especially for newbies. It's like trying to pick a dish at a fancy restaurant with a huge menu – where do you even start, right? Plus, comparing all those options can be a headache.

So, how do we handle this? Well, it's all about doing our homework. We need to take the time to understand what each account type offers, weigh the pros and cons, and figure out which one aligns best with our trading style and goals. Yeah, it might take some extra effort, but hey, it's worth it to make sure we're making the right choice for our trading journey.