Cent account is said to be unique and ideal for newcomers. But how does it exactly work to protect beginners from having too much loss?

What Is Cent Account?

A cent account is a type of trading account that measures the balance in cents instead of dollars. If you deposit $10, your account balance will show up as 1000 cents. The positions would be displayed in cents as well.

If you incur a profit of $10, it would actually show up as a profit of 1000 cents. The market rates would also appear in the form of cents. Bitcoin would show up as 6,000,000 cents instead of $60,000.

In addition, the cent account also affects the "appearance" of trading volumes, maximum orders, and profit potential in your trading account.

 

Trading Volumes on Cent Accounts

With a cent account, you have access to a minimum trading volume of 0.01 lots which is equivalent to 0.0001 lots or $10. For a standard account, this minimum trading volume of 0.01 lots would be equivalent to $1000.

Below, I will provide the calculation examples:

  • Cent Account:
    • Minimum trading volume: 0.01 lots
    • Value per lot: $0.0001 (or equivalent to 0.01 lots)
    • Therefore, the minimum trading volume value in dollars: 0.01 lots * $0.0001/lot = $0.0001
  • Standard Account:
    • Minimum trading volume: 0.01 lots
    • Value per lot: $100 (or equivalent to 0.01 lots)
    • Therefore, the minimum trading volume value in dollars: 0.01 lots * $100/lot = $1

So, in the cent account, the minimum trading volume value is $0.0001 or equivalent to 0.01 lots, whereas in the standard account, the minimum trading volume value is $1 or equivalent to 0.01 lots.

This difference reflects the smaller scale of the cent account, making it more suitable for traders with lower initial capital.

 

Maximum Orders on Cent Accounts

The maximum position capacity of a cent and standard account varies per broker. But, generally speaking, a cent account would have a maximum position capacity of 50 while a standard account would have about 100. Those are the maximum orders that can be opened in one account simultaneously.

In other words, traders using a cent account can open up to 50 orders at the same time, regardless of whether they are buying or selling various financial instruments.

On the other hand, those using a standard account have the ability to manage a larger portfolio, with the potential to open up to 100 orders concurrently.

 

Profit Potential on Cent Accounts

With the trading volume and position capacity being extremely low in a cent account as compared to a standard account, it is only obvious that it would have a low-profit potential as well. Not being able to open as many deals with big lots means it becomes a challenge to earn a good enough profit in a cent account.

Let's take a look at the following examples:

  • Cent Account:
    • Minimum trading volume: 0.01 lots
    • Value per lot: $0.0001 (equivalent to 0.01 lots)
    • Let's assume you open a trade with 0.01 lots.

  • Profit Calculation:
    If the trade moves in your favor by 50 pips (price change in the currency pair):
    • Profit per pip per lot: $0.0001
    • Total profit: 50 pips * $0.0001/pip/lot = $0.005

With such small value per lot and limited position capacity, even if the trade moves significantly in your favor, the potential profit remains quite low.

  • Standard Account:
    • Minimum trading volume: 0.01 lots
    • Value per lot: $100 (equivalent to 0.01 lots)
    • Let's assume you open a trade with 0.01 lots.

  • Profit Calculation:
    If the trade moves in your favor by 50 pips:
    • Profit per pip per lot: $10
    • Total profit: 50 pips * $10/pip/lot = $500

Here, due to the larger value per lot and increased position capacity, the potential profit from the same price movement is much higher in a standard account.

Given these differences, it becomes apparent that a cent account's profit potential is limited due to its lower trading volume and position capacity. With the inability to open as many positions with significant lot sizes, it becomes challenging to generate substantial profits in a cent account.

While a cent account might be useful for beginners or those with limited capital, traders aiming for higher profits often prefer standard accounts due to their larger trading volume and position capacity, allowing for more significant gains from price movements.

 

Advantages and Disadvantages of Using a Cent Account

Although a cent account may seem like a regular standard account with just more zeros, it has a lot that goes into it. Below are some of its advantages and disadvantages:

✔️Advantages ❌Disadvantages
  • Beginner-friendly due to low trading volumes.
  • Gets you used to trade with large digits of numbers.
  • Minimizes losses due to limits in trading volumes and the number of orders.
  • Minimizes profit potential due to smaller lot sizes.
  • Minimizes profit potential due to smaller maximum orders.
  • Hard to shift to a standard account once you're used to seeing all the extra zeros.

 

Top Brokers Offering Cent Accounts

Cent accounts are a relatively smaller niche in the forex industry. In fact, most people wouldn't even know such account exists unless they stumble upon a broker that offers it. Although there aren't many brokers providing cent accounts on their platforms, it is still important to know which are superior to the rest. Following are the top brokers that offer cent accounts:

  • FXTM
    The FXTM's cent account, named the Micro Trading Account, offers a minimum trading volume as low as 0.01 lots. Meanwhile, the leverage offered ranges from 1:30 up to 1:1000, enabling you to maximize profit potential from the cent account.  To trade on the FXTM cent account, you need to make a minimum deposit of $10. With this capital, you can trade forex, CFDs, and commodities with zero commission applied.

  • XM
    XM also has a cent account that offers a minimum trading volume as low as 0.01 lots. This account is called a standard account, with spreads on all major currency pairs as low as 1 pip. The required minimum deposit is $5, and the leverage can go up to 1:1000.

  • FBS
    The cent account type from FBS offers a minimum volume of 0.01 cent lot. The required minimum deposit is only $10. As for the spreads, FBS applies a floating spread of 1 pip, and the leverage is set at 1:30. If you choose to upgrade to the pro version, the leverage you can obtain increases, reaching up to 1:500.

  • RoboForex
    Last but not least, RoboForex provides a trading facility called the RoboForex Cent (Micro) Account. With this account, you can enjoy trading with a minimum lot size as low as 0.01 on the MT5 platform. If you're using MT4, the minimum order volume is 0.1. RoboForex offers 36 currency pairs to trade, with spreads starting from 1.3 pips. In the ProCent account at RoboForex, you can experience leverage of up to 1:2000.

 

For more examples of recommended brokers offering cent accounts, you can visit Top Brokers for Scalpers with 5-digit Cent Accounts.